![]() ![]() Such a granular contract is often called a statement of work (SOW). Once a BPO company is hired, more granular agreements may be drawn up to cover how each project will be handled by the BPO company. A backup BPO company may also be selected in case the primary BPO company is not able to deliver as expected. Once the client company receives these broad contracts from considered BPO companies, its decision-makers decide which BPO company offers the best value and hires one. ![]() The BPO company will then draw up a contract, often called a master service agreement (MSA) or a service-level agreement (SLA) that gives a broad overview of the terms of the agreement. In this way, often, no BPO-client relationship is exactly the same. ![]() Many BPO companies determine the needs of the client company, then tailor a solution to those unique needs. Once a company has reached out to a considered BPO company, a conversation begins. Often, the searching company will contact more than one BPO company to determine the best fit. The company then begins researching different companies that specialize in performing the needed business function. Finally, “domestic” or “onshore” BPO means hiring a company within the company’s own country.īusiness process outsourcing begins when a company determines it can gain a benefit from outsourcing a business function, such as marketing, accounting or supply chain management, to an external company. “Nearshore” outsourcing means hiring a BPO company in a nearby country, such as a Canadian company outsourcing to a U.S. For example, a company in the United States may hire a BPO company in the Philippines. “Offshore” BPO means hiring an overseas company to run a business function. Front-office BPO involves outsourcing customer-facing functions like sales or customer service. Back office functions include those that are not customer-facing, such as accounting and human resources. Traditionally, BPO was used by manufacturing companies but it has more recently spread to a variety of industries.īusiness process outsourcing can include outsourcing back-office or front-office functions. BPO is different in that whole business functions, such as marketing or accounting, are outsourced. An example may be hiring a freelancer to do video editing. To clarify, many companies outsource tasks to external providers. Business process outsourcing involves the outsourcing of business functions to external companies.
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