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.
Business process outsourcing is a subset of outsourcing that involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider. Originally, this was associated with manufacturing firms. It is typically categorized into back office outsourcing, which includes internal business functions.
Business process outsourcing (BPO) is the delegation of one or more IT-intensive business processes to an external provider that, in turn, owns, administrates and manages the selected processes based on defined and measurable performance metrics. BPO offerings are categorized in two major categories: horizontal offerings (those that can be leveraged across specific industries) and vertical-specific offerings (those that demand specific industry vertical process knowledge).
Shared Services and Outsourcing
Shared services is a business model that incorporates the common business of organisations such as functions, services, or processes that used to exist in more than one part of the organisation, into one shared operation at a centralized location. The key objective of the shared services model is to increase quality, productivity, and cost efficiency through the process of standardization and consolidation. It also promotes the sharing of resources within multiple parts of the organisation.
As the nature of business within shared services centers can be outsourced, the work involved can be contracted out to external parties, based on pre-defined service level agreements. This is known as outsourcing and the deal may result in the transfer of employees and assets involved to the business partners appointed.
Outsourcing has become an essential tool in accelerating and complementing shared services approaches as more companies are leveraging on global business services strategies to align their business objectives and obtain economies of scale. The notable recognitions Malaysia has garnered over the years show that it has the capacity and credibility to move further and grow in the industry, and this is attributed to the unique combination of good talent, competitive cost, and a world-class business environment.