business process outsourcing (BPO)
Business process outsourcing (BPO) is the contracting of a specific business task, such as
payroll, to a third-party service provider. Usually, BPO is implemented as a cost-saving measure
for tasks that a company requires but does not depend upon to maintain their position in the
marketplace. BPO is often divided into two categories: back office outsourcing which includes
internal business functions such as billing or purchasing, and front office outsourcing which
includes customer-related services such as marketing or tech support.
BPO that is contracted outside a company's own country is sometimes called offshore outsourcing.
BPO that is contracted to a company's neighboring country is sometimes called nearshore outsourcing,
and BPO that is contracted with the company's own county is sometimes called onshore outsourcing.
This was last updated in November 2010
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