Business process outsourcing

Business Process Outsourcing – an Edge in a Competitive Marketplace

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The contracting of a specific business task to a third-party service provider is called Business process outsourcing. Companies usually implement it as a cost saving measure for tasks required by, but not depended on by the company, to sustain their position in the marketplace.

Types of BPO

BPO can be categorized as back office outsourcing, where internal business functions like billing or purchasing is outsourced, and front office outsourcing where customer-related services like marketing and tech support are outsourced.

Business process outsourcing could be contracted outside a company’s country, in which case it’s called offshore outsourcing. It could be contracted to a company’s neighbor country and is then called near shore outsourcing, and when it is contracted within the company’s own country it is called onshore contracting.

The value of business process outsourcing

In recent times, BPO has become popular with companies, big and small. There are a variety of reasons, ranging from a desire to achieve economies of scale, to gain access to specific field of expertise or to the access to technology infrastructure without the need for companies to develop on their own.

In enterprise, business processes are inter-related. Business thrives when shared back office and industry specific processes are linked to decision support. The true value of Business process outsourcing is in optimizing and linking disparate processes seamlessly. This in turn helps businesses to leverage their business performance and gain a competitive advantage in the marketplace.

Past BPO practices

In the past, large companies have outsourced travel requirements to travel firms who are veteran in their field as well as, can negotiate better deals with airlines and hotels. During the Internet boom, service providers for employee benefits, payroll or accounting developed outsourced schemes especially catering to the needs of start-up companies. Logistics, procurement, customer service, inventory management are the areas where business process outsourcing was generally found to be a better option.

Finding the right partner

As more and more businesses look at BPO as a viable alternative, finding the right partner to work with, and who understands the core business processes is of paramount importance. All companies that offer outsourcing facilities should demonstrate the required quality of process expertise, especially if the process outsourced is of strategic importance to the company. Deep domain expertise would be an additional advantage.

High Quality Outcomes

BPO is no longer about just consolidating back office processes to lower cost location. With the evolution of technology and processes, organizations can and must expect high-quality outcomes that align with their financial bottom lines.

Providers must therefore employ top of the line talent to cater to this demand. Companies that offer outsourcing facilities could offer general areas such as finance and accounting, customer care, legal solutions, procurement, technology solutions or industry specific back office and front office processes.

The Smart Choice

Some providers deliver complex analytical and research services. Evolved information systems, increased market globalization and a fast-changing business environment make business process outsourcing a smarter choice for the global market. By collaborating with the right partner, an enterprise has the tools to not only streamline core business processes, but also focus on core business strengths and achieve an edge in the marketplace.

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