Business process outsourcing (BPO) is the practice of using a third party, contracted to perform specific, specialized processes on a companys behalf. Although outsourcing in its most basic form has been used for decades, such as when a business uses an outside accountant to balance the books, it has become a practice used by the majority of businesses and large companies, on a much larger scale. By outsourcing certain aspects of doing business, the company can focus on its primary purpose, whatever that may be.

There are two primary types of BPO: back office and front office outsourcing. Typical back office processes that may be outsourced include payroll, billing, logistics and human resources. Some companies offer their services in collections, credit analysis and job recruitment. More than ever, processes that one would never think would be outsourced, such as claims processing at an insurance company, are being outsourced to separate companies. Examples of front office outsour ...more