Business process outsourcing (BPO) is the practice of contracting a work process or processes to an internal service provider.

Offshore vendors are located outside of the company’s own country and is near the headquarters.

Nearshore vendors are located in countries that neighbor the contracting company’s country.

Onshore vendors are located in a different city or state but doesn't operate within the same country as the contractor.

BPO is often divided into two main types of services: back office and main office.

Back-office services include internal business processes, such as billing or purchasing.

Front-office services pertain to the contracting company’s customers, such as marketing and tech support.

BPOs can't combine both back and front office, because they work separately and doesn't have anything to do with one another.

Outsourcing is a part of many successful business models, especially for companies who have the resources and services they need available internally.

Outsourcing cuts down on costs for in-house labor, particularly for staffing and training, and for the work space to accommodate local employees.

Outsourcing allows businesses to hone in on their main offerings instead of company functions that aren’t directly tied to their core processes.

Outsourcing companies specialize in what are considered core functions of other businesses, delivering world-class capabilities for its clients.

All outsourcing companies can serve customers in multiple languages, around the clock, thus relieving the local company of the responsibility.

Companies that outsource their noncritical functions can act more quickly and more efficiently when managing the risks associated with introducing new products or services.

Companies that outsource processes are opting to let specialists handle those tasks, thus saving time, improving accuracy, and increasing their capacity.

Companies that outsource processes are opting to let specialists handle those tasks, thus saving time, improving accuracy, and increasing their capacity.

Knowledge services functions include billing services, accounts payable, receivables, general accounting, auditing, and regulatory compliance.

BPOs can help address workforce challenges but don't solve it. They can also cover payroll services, healthcare administration, hiring and recruitment, workforce training, insurance processing, and retirement benefits.

IT and Software operations may include data analytics, data mining, data and knowledge management, and internet and web research, as well as developing an information governance program and providing the voice of customer feedback.