• What is the BPO Industry?

    This term refers to the Business Process Outsourcing Industry, which deals with contracting third party organizations to perform specific business tasks. The two main divisions of the BPO Industry is back office outsourcing (internal business functions) & front office outsourcing (external business functions). Back office functions are non customer related business tasks, such as Human Resources, Information Technology, and Payroll. Front office tasks are customer related business tasks, such as Telemarketing and customer support.

     

    How large is the BPO Industry?

    In 2007 the BPO industry had a market value of $173 Billion. $24 Billion of that is outsourced offshore, with India & the Philippines netting most of that revenue. India accounts for nearly 70% of all offshore business process outsourcing. The major countries receiving ITES-BPO (IT Enabled Services in Business Process Outsourcing) remain North America at almost 60%, Western Europe at around 22%, and Asia Pacific at roughly 18%. Today, the BPO Industry is growing at an astounding annual rate of 15%.

    How is BPO Advantageous?

    The BPO Industry is growing rapidly because of the specific advantages it gives to business owners. The main advantage is flexibility – this is by the far the most common answer. There are two main ways the BPO Industry provides this:

    1. Fixed variable costs – BPO Companies provide a fee-for-service option for business owners, which is essentially a fixed cost for different functions & tasks. This helps businesses gauge which functions are more advantageous to outsource, and gives them more control over the process as opposed to investing certain assets.

    2. Focus on core functions – By outsourcing non-core & tedious functions, this gives businesses the option to focus on growing their business. Most of these functions require time & resources that few businesses (both small & large) can spare, and it would make more economic sense to outsource these functions than to do them in house.

    In essence, Business Process Outsourcing will simplify the business equation by eliminating back office functions such as HR, Payroll, Billing, and logistics, and front office functions such as IT, marketing, and customer service.

    In what locations is the Business Process Outsourcing Industry thriving in?

    By far the most popular location for Business Process Outsourcing services is India, but in the past 5-10 years, other BPO hubs are emerging. Below is a list of BPO Industry in the most popular worldwide locations:

    Other emerging locations for BPO include various Latin American countries such as Argentina & Brazil, Australia, and Ireland.