Business Process Outsourcing (BPO) is a kind of outsourcing in which the company outsources a specific activity/process related to its business to a third party service provider. E.g. of the process could include payroll, HR, technical support to the customers. BPO allows a company to save cost and also focus on the core activities. Business Process Outsourcing can be of 2 types:
1. Back-office outsourcing: it involves outsourcing of internal business functions like payroll, HR, etc.
2. Front-office outsourcing: It involves outsourcing of customer related processes like technical support, maintenance etc.
It can also be classified as:
1. Offshore outsourcing: When the work is contracted to a company that does not reside in the same country. India and China have emerged as popular destinations for offshore outsourcing.
2. Near-shore outsourcing: When the work is contracted to a company that resides in the neighboring country
3. Onshore outsourcing: When the work is contracted to a company that is in the same country
Knowledge process outsourcing (KPO) and Legal Process Outsourcing (LPO) are now emerging as important subsets of BPO.
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