Main Reasons Why Big Companies Outsource Work

In order to focus on core processes and activities, many companies outsource their side processes to specialized companies. Some of the tasks that are outsourced are customer service, IT support etc. By reducing their workload, they can concentrate on other critical areas of the business efficiently. This results in better utilization of time, effort and money and an increase in productivity.

Here we will be discussing all business process outsourcing.

About Business Process Outsourcing

Business process outsourcing is to hire the services of an external 3rd party on a contractual basis.  This 3rd party provider company can be assigned a variety of specific tasks such as accounting, payroll, social media marketing, telemarketing, and customer support.

Relevance of BPO firms in the market

BPO firms usually provide assistance for supportive business functions and not the core ones. Their services can be related to technical or non-technical area. Many businesses, whether small startups or large Fortune 500 firms, prefer to outsource processes. BPO market has been seen to accelerate at a rapid pace in the marketplace for two main reasons:

  • innovative and new services are getting offered, and
  • businesses are searching for ways to reach ahead of their competitors.

What kind of services does a BPO offer?

BPO companies are generally divided into 2 major types: front office and back office. Back office services generally comprise of internal business processes, such as purchasing and billing. Front office services serve the customers of contracting company such as marketing and technical support.

How are BPO services classified on the basis of location?

The BPO industry is classified into 3 different groups on the basis of the vendor location:

  • Offshore vendors

These vendors are located outside the country of the company.

  • Nearshore vendors

These vendors are located in neighboring countries of the company.

  • Onshore vendors

These vendors are located within the country of the company. Within the same country, they can be located in different cities or states.

Reasons to outsource processes to BPO

To decrease costs:

When a task is outsourced, there is less expense due to reduced in-house labor, and the facility needed space to accommodate local employees.

To focus on key functions:

Businesses can focus on their major offerings without being anxious about functions of companies that aren’t expressed in relation to their core processes.

To get improved outcome in the non-core functions:

BPO companies have expertise in the non-major purposes of other firms. They can leverage the potential of outsourcing businesses that enrich their own technology.


A thorough understanding of business process outsourcing and ways to select the right BPO vendors support will benefit your business in multitude ways.