BPO stands for Business Process outsourcing.

Business Process Outsourcing is the long-term contracting out of non-core business processes to an outside provider to help achieve increased shareholder value.

Many IT professionals are familiar with the term business process outsourcing (BPO), but knowing how to distinguish it from other types of outsourcing requires some scrutiny.

Though some forms of BPO may include both IT management and business operations, the approach is primarily about turning over functions such as payroll, accounting, billing or even real estate management to a third party. Though these business processes may depend on IT, they are separate functions from core IT operations, such as data center activities or network management.

Why BPO?

Free Your Resources and Work On Your Strategy an important aspect of business process outsourcing is its ability to free corporate executives from some of their day-to-day process management responsibilities. Traditionally, executives spend 80 percent of their time managing details, and only 20 percent on strategy. Once a process is successfully outsourced, the ratio can be reversed. Executives get more control over their most valuable resource: time. Time to explore new revenue streams, time to accelerate other projects, and time to focus on their customers.

Improve Processes - Save Money Companies that outsource business processes are often able to reengineer those processes and capture new efficiencies. Then they can reallocate resources to other important projects and leverage their investment in technology. For example, processes that are handled in a shared production environment for multiple companies save everyone money. In most cases, high-caliber subject-matter experts are brought in to design and manage these processes, bringing with them best practices, innovation, and years of experience that most companies don't have access to or can't afford on their own.

Increase Your Capabilities with this expertise often comes increased capability. In addition to doing things more efficiently, you can expand your ability to deliver new products and services to your customers. Then there are the factors of scalability and scope. Companies that want to grow internationally must continuously invest in infrastructure and find talent around the world. Many outsourcing providers are already established globally and can help make the growth process run smoothly.

What is Outsourcing?

Outsourcing is the delegation of tasks or jobs from internal production to an external entity (such as a subcontractor). Most recently, it has come to mean the elimination of native staff to staff overseas, where salaries are markedly lower. This is despite the fact that the majority of outsourcing that occurs today still occurs within country boundaries. It became a popular buzzword in business and management in the 1990s. Where functions previously performed by an organisation are supplied under contract from a third party.

Buying goods or services instead of producing or providing them in-house. While outsourcing is not exactly a new innovation, the shifts that have occurred recently in this space are worth noting. As the need for e-learning moves higher up on the IT and corporate training agendas, organizations are won't to take on the IT management burden of implementing a learning management system (LMS).

The concept of taking internal company functions and paying an outside firm to handle them. Outsourcing is done to save money, improve quality, or free company resources for other activities. Outsourcing was first done in the data-processing industry and has spread to areas, including telemessaging and call centers.

Outsourcing is the wave of the future. A long-term, results-oriented relationship with an external service provider for activities traditionally performed within the company. Outsourcing usually applies to a complete business process. It implies a degree of managerial control and risk on the part of the provider. The transfer of components or large segments of an organization's internal IT infrastructure, staff, processes or applications to an external resource such as an Application Service Provider.

OFFSHORING DEFINED

No commonly accepted definition of "offshoring" exists, and the term has been used to include various international trade and foreign investment activities. Services that U.K. U.S. or any foreign country based organizations purchase from abroad are considered imports. They may also be linked to U.K. firms' investments overseas -- for example, U.K. firms may invest in overseas affiliates as a replacement for, or as an alternative to, domestic production.

In recent years, services offshoring has been facilitated by factors, such as the Internet, infrastructure growth in developing countries like India, and decreasing data transmission costs. Organizations' decisions to offshore services are influenced by potential benefits such as the availability of cheaper skilled labour and access to foreign markets, and by risks, such as geopolitical issues and infrastructure instability in countries that supply the services.

"'Offshoring' of services generally refers to an organization's purchase from other countries of services that it previously produced or purchased domestically, such as software programming or telephone call centers ,".