Business process outsourcing (BPO) is contracting an outside company to perform a business process for you, with the provider supplying the people, the management and often the facilities and tools. The work can face customers, such as support calls, chat and sales, or sit in the back office, such as billing, data entry and claims. You set the requirements and measures; the provider staffs and runs the work.
At a glance
- BPO buys a process run by someone else, not just software or temporary staff.
- Contact center work (inbound support, outbound sales, collections) is a large share of BPO, but back-office processes are common too.
- Providers deliver from onshore, nearshore or offshore locations, often blending them for cost, language and time-zone coverage.
- Pricing is usually per hour, per FTE, per transaction or tied to outcomes.
- You keep responsibility for the customer relationship and, in most cases, for how customer data is protected, so contracts and oversight matter.
What problem it solves
Hiring, training and retaining people for high-volume, repeatable work is slow and costly, especially when demand swings by season, campaign or product launch. A company that needs 24/7 coverage, extra languages or a team in a new region may not want to build that capability itself.
A BPO provider already has recruiting pipelines, trainers, supervisors, workforce scheduling and facilities. Outsourcing lets you add capacity faster, cover hours or languages you could not staff economically, and free internal staff for work that needs company knowledge. Some companies outsource an entire function; many outsource only overflow, after-hours or a specific line of business and keep the rest in-house.
How it works
Scoping. You define the process: which contact types or transactions, volumes, hours, languages, channels and the measures the provider will be held to, such as service level, handle time, quality scores or resolution rates.
Transition. The provider recruits and trains agents, often with your trainers involved, builds process documentation and a knowledge base, and connects to your systems. A pilot or phased ramp is common before full volume moves over.
Platform. Agents work either on your technology (your CRM, ticketing and contact center platform) or on the provider’s. Using your platform keeps data and reporting under your control; using theirs can be faster to start but makes switching providers harder.
Ongoing management. The provider supervises, schedules and coaches its staff. You review performance against the contract, typically through regular reports, quality calibration sessions and business reviews. Contracts often include incentives or penalties tied to agreed measures.
For providers and models we compare, see our business process outsourcing page.
When it matters for buyers
- When you are scaling fast and hiring can’t keep up with contact volume or new markets.
- When you need coverage you don’t have, such as nights, weekends, holidays or additional languages.
- When a contact center platform is up for renewal, because the choice of platform and the choice of who staffs it affect each other.
- When handling regulated data such as payment cards, health information or personal data of residents in other countries. Where the work is done and who can see the data can change your obligations; rules vary by country and industry, so check with counsel.
- When outsourcing outbound work such as sales calls, texts or collections. Telemarketing, consent, do-not-call and debt-collection rules apply in many places and vary by country and, in the US, by state; outsourcing the calls does not usually move the responsibility off your company.
- When comparing automation with people. Robotic process automation and AI self-service can take on some work that might otherwise be outsourced; many providers now bundle both.
Questions to ask vendors
- From which locations would our work be delivered, and can we restrict that?
- Will agents use our platform and CRM or yours, and who owns the recordings, transcripts and records?
- How do you recruit, train and retain agents for an account like ours, and what attrition do you see on similar accounts?
- Which measures will you commit to contractually, how are they calculated, and what happens if you miss them?
- How do you handle security and compliance for our data, such as payment card data, access controls, clean-desk rules and background checks?
- For outbound work, how do you manage consent records, do-not-call lists, calling hours and disclosures for the places our customers are in?
- What are the minimum volumes, ramp-up fees and term commitments, and how quickly can we scale up or down?
- How does a transition back in-house or to another provider work, and what help do you give?
How it differs from ITO
Information technology outsourcing (ITO) hands an outside provider the running of technology: infrastructure, applications, help desk or IT operations. BPO hands over a business process, such as answering customers or processing invoices, which may use technology but is measured on business results. The two often meet in the contact center: a BPO staffs the agents, while the platform they work on may be run in-house, bought as a cloud service or supplied by the BPO itself.