Capterra Glossary
Business Process Outsourcing (BPO)
Business process outsourcing (BPO) occurs when organizations outsource IT-related functions to an external company. These functions include:
Outsourcing customer service duties to a call center
Sub-contracting cybersecurity responsibilities to a third-party company
Delegating server management tasks to a managed service provider (MSP)
An external service provider manages delegated tasks for a business, freeing up resources and labor in that organization. There are two categories of BPO services:
Horizontal services that external providers leverage across industries. For example, server management services for companies in all sectors.
Vertical-specific services that require specific industry knowledge. For example, outsourced social media management services for marketing companies.
What Small and Midsize Businesses Need to Know About Business Process Outsourcing (BPO)
An SMB might invest in BPO if, unlike larger companies, they don't have the staff or resources to carry out business functions in-house. They can save money on labor costs, concentrate on core business tasks, and benefit from the latest servers, data centers, and other IT infrastructure without paying for these technologies.