BPO Full Form | BPO meaning, Need, Types, BPO vs KPO

BPO Full Form

This write-up intends to take you through the details of BPO and BPO full form.

For this purpose, the write-up includes the full form and meaning of BPO. Further, explore the need for BPO and how does it work.

Moreover, we have included the types of BPO and why do businesses outsource processes. For a better understanding, go through the difference between BPO and KPO as well.

Also Read:- BCA Full Form

What is the full form of the BPO?

BPO is used as an abbreviation for Business Process Outsourcing.

What is BPO?

Business Process Outsourcing refers to contracting of the specific business functions to an external service provider.

It acts as a cost-saving method that enables the companies to outsource non-core tasks.

Business process outsourcing can include business functions such as data recording, telemarketing, payroll, accounting, customer support certain marketing functions, and more.

Usually, the core functions are not outsourced through business process outsourcing.

Outsourcing the non-core processes allows the companies to focus more on the core functions.

Through this, they do not need to allocate resources and talents to such processes and functions.

Must Read:- What is API?

What is the need for BPO?

Business process outsourcing has become very popular nowadays and is being widely accepted by companies across the corporate world.

Explore the needs of BPO which is provided as follows:-

Leads to cost-reduction

BPO can significantly help the companies in controlling their financial integrity for the future and reducing the costs.

Certain non-core business functions are complicated and cost-consuming. Outsourcing enables businesses to perform such functions at a consistent and reasonable cost.

More emphasis on core processes

By handing over the non-core business processes to an outside provider, businesses can focus on their core competencies.

Also, outsourcing helps businesses in avoiding investments in facilities and equipment to support their respective business functions.

Therefore, without compromising the quality of non-core processes, businesses can perform efficiently.

Improves business productivity

The business process outsourcing companies have their primary focus and specialization in non-core business functions.

They invest in these activities to achieve higher efficiency, expertise and performance in these activities.

All this, in turn, benefits your business through better services and productivity.

Enables better resource allocation

If the businesses do not decide to outsource the non-core processes, they will have to incur heavy investment and expenditure on several elements related to that.

When the business functions are outsourced, it is a cost-saving decision as you can reassign those resources to boost the core tasks of the business.

Access to updated and latest technological resources

The business process outsourcing companies stay up-to-date on the best business practices and innovations.

This ensures that businesses remain updated in terms of technology and innovation without incurring high costs.

Therefore, investing in BPO confers them with cutting-edge capabilities without needing to invest in them.

Things to Know:- What is TDS?

What are the types of BPO?

There are three types of business process outsourcing which are as follows:-

Off-shore Outsourcing

The strategic practice in which a business hires a third-party supplier to execute the work in a nation other than the one in which the hiring business is primarily conducting its operations.

In simple terms, the business process outsourcing company or vendor is located outside of the country where the company is located.

Near-shore Outsourcing

Near-shore outsourcing refers to the strategic practise of outsourcing the company’s business functions or processes to vendors in neighbouring countries rather than in the same country.

On-shore Outsourcing

On-shore outsourcing is the one in which the company, as well as the contractor, are located within the same country.

However, the company and the contractor may be located in different cities or states but are within the territorial boundaries of the same country.

What is the difference between BPO and KPO?

Basis of DistinctionBPOKPO
Full formBusiness process outsourcingKnowledge process outsourcing
MeaningBPO refers to contracting of the specific business functions to external service providers.KPO refers to contracting knowledge and information processes to third-party service providers.
Complexity levelLow-level of complexityHigh-level of complexity
BasisIt is based on rulesIt is based on the judgment
RelianceCost arbitrageKnowledge arbitrage
Expertise requirementsProcessKnowledge
Employee talent requirementGood communication and interpersonal skillsProfessionally qualified and skilled workers
EmphasisLow-level or non-core processesHigh-level processes

What are the types of outsourcing?

There are other types of outsourcing as well apart from business process outsourcing.

  • Knowledge Process Outsourcing is contracting knowledge and information processes to third-party service providers.
  • Legal Process Outsourcing is a type of KPO that is specific to legal services like legal document drafting, performing legal research, offering legal advice, and more.
  • Research Process Outsourcing is also a type of KPO that is specific to research and analysis functions and processes of companies.

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