In this era of rapid technological advancement, the business world is witnessing a phase of constant dynamism. New technologies, super-focus on users, and intense business competition have resulted in an environment that requires excellent efficiency and agility to thrive here.

The best solution by which businesses can enhance their focus, productivity, and agility are BPO. Business Process Outsourcing (BPO) shifts business operations or processes from the home office to a different location. Although there are plenty of reasons to adopt a BPO model, the main reason is savings on labor costs. Let’s take a comprehensive look at this subject matter.

Why Is Business Process Outsourcing So Important For Businesses? 

Business Process Outsourcing enables businesses to stay ahead of one another. Some of the reasons why companies outsource are:

  • It ensures reduced operational and labor costs.
  • The core team gets to save their effort, energy, and creativity.
  • It enables businesses to focus more on core competencies.
  • It ensures minimal operational risks while businesses stay busy scaling or expanding.

Business Process Outsourcing – Checklist

Whether you’re a small-sized business or a big enterprise, ask these questions yourself:

  • What process saves most of the time in your organization and helps you focus on most useful job?
  • Is your business centered around effectiveness and revenue-producing strategies? If not, what activities would it be a good idea for you to rethink?
  • Are there processes in your business needs improvement, yet it’s doing it at any rate on account of time or budget constraints?

Once you answer these questions, proceed to make a checklist for your outsourcing needs. Make sure the business process outsourcing company meets all the criteria in the list.

  • ResourcesBusiness Process Outsourcing saves a lot of internal resources
  • Innovation: Business Process Outsourcing helps enterprises to come up with new ideas every day
  • Time: Business Process Outsourcing is fast and saves a lot of an organization’s time.
  • Expertise: Business Process Outsourcing enables enterprises to gain knowledge.
  • Price: Business Process Outsourcing is designed with small-budget plans.

Risks of Outsourcing & Mitigation Strategies

Risk 1: The Long-Run Problem of Having Trust

When wondering whether outsourcing business operations is a good idea, you must’ve thought about how to trust someone who’s located a thousand miles away.

Solution: Pick the business process outsourcing company depending on the following:

  • The number of their clients and success rate
  • The company website: Whether it’s attractive or not
  • The maturity of their company
  • Their social media activities

Risk 2: Domain Expertise 

If planning to choose an business process outsourcing IT company, their domain expertise becomes a vital criterion.

Solution: Determine the technologies where the proficiency of the selected vendor lies in. Take a look at their implemented projects while knowing their accomplishments.

Risk 3: No Expertise With Remote Teams 

Often, clients say they won’t be outsourcing or hiring any remote team and that their staff should be based locally. It mostly happens when the business founders lack expertise in outsourcing and managing remote operations.

Solution: Pick a BPO company that offers a well-developed model for integrating the remote team.

What are the Types of Business Process Outsourcing Models?

The various types of pricing models for outsourced projects include:

  • The Fixed price models
  • Time and Materials (T&M)
  • Incentive-Based pricing model
  • Shared Risk-Reward pricing model

Business Process Outsourcing Engagement Models

The Business Process outsourcing engagement models are classified into the three types depending on the financial aspects and other conditions:

  • Fixed Price Model
  • Dedicated Team Model
  • Time & Materials Model

Business Process Outsourcing Examples

Some examples of business process outsourcing include:

  • IT Outsourcing: These companies work in two ways: designing new software and maintaining computer equipment in working condition.
  • Accounting: To outsource the enterprise’s accounting services is to transfer your business’s functions and bookkeep to a third party.
  • Legal Outsourcing Services: Several businesses require legal services multiple times a year. Having a contract with a law outsourcing company is a great way to get experienced legal aid.
  • Logistics Outsourcing: In this outsourcing type, you delegate almost every transport operation to another company. They can help you deliver goods via railway ship, car, and air logistics.

What are the Benefits of Business Process Outsourcing?

There are benefits of business process outsourcing a particular job, task, or process. These benefits include:

  • Enhanced focus on core business operations
  • More efficient, productive service of superb quality
  • Save a lot of money and release capital for inverting in other business areas
  • Enhanced reach and access to facilities and capabilities
  • Leverage excellent knowledge and skills to get an edge over the business competitors

Business Process Outsourcing: Pros and Cons


  • Reduced or minimal project/labor costs
  • Advantage of utilizing a new knowledge base without giving any training to employees
  • Enjoy time management by freeing up your time involving day-to-day task work
  • Enjoy increased speed, agility, and flexibility to manage projects
  • Get the benefit of the time zone factor as your outsource team may be working while you’re sleeping
  • Enjoy complete control over project communication


  • Slow response time
  • Privacy and data security concerns
  • Time zone factors: Things may become challenging to coordinate schedules
  • Language barriers

Outsourcing Vs. Insourcing (Inhouse)

  • Outsourcing seeks the services of outside organizations that are not related to the company for completing specific tasks.
  • Meanwhile, insourcing is a business activity done within the enterprise’s operational infrastructure.
  • Whether the business uses insourcing or outsourcing, the enterprise’s control over decisions and operations will vary.
  • Outsourcing needs an outside business enterprise that differs from the primary enterprise’s operations, while insourcing usually places new processes and operations in-house within the enterprise.

Services Mostly Outsourced

The list of services that are primarily outsourced in the business world includes the following:

  • Information Technology (IT)
  • Social Media Marketing
  • eCommerce Support Services
  • Back Office BPO Services
  • Finance & Accounting services
  • Web Design and Development services
  • Call Center for Customer Services
  • Order Management Services
  • Digital Marketing Services

Functions Mostly Outsourced

To keep things simple, let’s just say that businesses primarily outsource some of the non-core functions of their enterprise. These functions include:

  • Accounts payable
  • Accounts receivable
  • Technical support
  • Data entry
  • Data Mining
  • Accounting and Bookkeeping Services

Trends of Business Process Outsourcing in 2022 – Geographics & Challenges

Some latest trends of business process outsourcing in 2022 include four things:

  • Artificial intelligence
  • Robotic automation
  • Enhanced remote working efforts
  • More and more utilization of cloud computing services

While most enterprises are pacing towards digitizing their business operations, organizations are deciding to invest in upskilling their workforce. This is one of the biggest trends in 2022.

Types of Business Process Outsourcing Providers

The various types of business process outsourcing providers can be classified depending on the types of services.

  • Professional Outsourcing: It comprises all specialized services like:
    • Purchasing
    • Legal
    • Digital marketing
    • Accounting
    • Computer Aided Design
    • Administration
  • Multi-Sourcing: It enables you to combine the services you want to outsource. Mostly, it’s a mix of IT and other business aspects.
  • IT Outsourcing: For your specific IT needs, you can contact a provider just for IT services.
  • Process-Specific Outsourcing: This type of outsourcing enables you to contact a provider for some specialist service. The process-specific outsourcing is of three types:
    • Legal Process Outsourcing (LPO)
    • Knowledge Process Outsourcing (KPO)
    • Recruitment Process Outsourcing (RPO)
  • Business Process Outsourcing (BPO): There’s no doubt that it’s the most common and highly demanding type of outsourcing.