What is business process outsourcing (BPO)? –Forbes Advisor

The following section offers three examples of business process outsourcing, including payroll, call center customer service, and supply chain management. However, business process outsourcing can be useful with a long list of business functions, including human resources, marketing, accounts payable (A/P), research and development, and sales, among others.


Payroll involves the calculation and dissemination of wages and taxes to workers and government agencies. In a nutshell, it starts with a list of employees and their status as a contractor or employee. Salaries are calculated based on employment status, tax withholdings, paid time off (PTO), and more. Salaries are often paid via direct deposit and pay stubs are provided to employees. Records are kept, estimated taxes are paid quarterly, and taxes are often reported annually.

Clearly, a lot of time and process is required to process payroll. It requires not only paying talent, but also hiring experienced payroll talent to execute the work in progress and avoid financial risk. Companies can outsource this process to save time, money, and resources that can then be devoted to their core competencies. By putting this process in expert hands, companies can also reduce the risk of penalties for payroll errors.

Call center customer support

Call centers often work with customers to ensure they have the best experience with the company’s services or products. The process involves answering customer questions and helping to resolve problems related to the company’s products or services. For best results, call center staff must be professional (even with upset customers), knowledgeable, personable, clear, and able to balance meeting customer needs with the interests of the company.

Because we live in a 24/7 world, the greatest customer satisfaction is often achieved with a constant presence to support you. Many small businesses don’t have the time, resources, or funds to provide 24/7 customer support. In addition to the constant demand for customer support, many companies don’t have the talent to meet other customer needs, such as multilingual support. Call centers are often equipped with the talent and resources to meet such needs.

Supply chain management

Supply chain management controls the process and flow involved in manufacturing products. For example, to make shoes, raw materials are sourced, sometimes from multiple sources around the world. The raw materials are then sent to the company that makes the shoes. The shoes are then shipped to companies that distribute them to customers. At the same time, inventories are managed so that resources arrive on time but do not incur additional storage, labor, or other costs.

Supply chain management is a complex process that, if not done accurately, can cost companies their profit margins. Chosen supply chain partners can make or break a company’s legal and moral standing. His management involves legal advice, payment processing, sourcing partners, quality control, accounting procedures, specialized software and more. An experienced BPO firm can manage these complexities while reducing risk.

Bottom line

Business process outsourcing is the outsourcing of business functions to an outside company. By doing so, companies can enjoy benefits such as lower overhead costs, gain access to advanced reporting and innovative technologies, reduce risk, access specialized talent, and better adapt to changing customer demands. However, it must be managed carefully to avoid pitfalls such as siled company communication, hidden costs, and reputational damage.

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