Business process outsourcing (BPO)

Business Process Outsourcing (BPO) is a form of outsourcing which involves the recruitment of operations and responsibilities of specific business functions (or processes) to a third party service provider. Originally, this was associated with manufacturing companies such as Coca Cola outsourced large portions of their supply chain .. In the contemporary context, is primarily used to refer to outs.

BPO is often divided into back office outsourcing - which includes internal business functions such as human resources or finance and accounting, and front office outsourcing - which includes customer-related services such as contact center services.

In the early days, BPO usually consisted of outsourcing processes such as payroll. Then grew to include employee benefits management. Now covers a range of functions that are considered "core" to the core business strategy.

Considered by some as a subset of BPO, KPO includes those activities that require greater skill, knowledge, education and experience to handle. For example, while an insurance company might outsource data entry application forms as part of a BPO initiative, which also may choose to use a KPO service provider to evaluate insurance applications based on a set of criteria or business rules; this job require the efforts of a more knowledge workers than the data entry would be. The current definition of KPO encompasses R & D, product development and legal e-discovery, and a number of other business functions.