Business process outsourcing is subcontracting business processes
Business process outsourcing (BPO) refers to the outsourcing of individual businesses or a portion of the workflow from a company. These business processes – often secretarial services of various types – are then handed over to external service providers. This also includes all the associated IT systems. Business process outsourcing is becoming increasingly important for companies when it comes to saving costs and minimising risks. Accordingly, more and more companies are giving over tasks to specialised business process outsourcing providers.
Business process outsourcing increases speed and saves costs
Business process outsourcing helps companies separate from supporting processes that are not primarily relevant to the business. These include areas like human resources, logistics, finance and account, procurement, customer support or operating data centres – or subsections of these such as data collection, document conversion, catalogue management or data research. These business processes are not usually part of the core business of a company. Successful business process outsourcing makes it possible for the company that is outsourcing to focus more on its main business, and therefore increase effectiveness and efficiency in its core competencies and processes in the long run. Business process outsourcing offers other benefits in addition to these: it reduces business risk because operational risks are transferred to the business process outsourcing service provider, and it increases flexibility since the company will reduce its workload and become more streamlined.
In turn, the outsourced services represent the core business of the business process outsourcing provider. Through the standardisation of processes the optimal utilisation of staff can be calculated, and therefore work highly efficiently at the same time. This then results in a lower rate of errors. The business process outsourcing provider employs professionals who deal exclusively with these processes every day; thanks to this specialisation they make efficient use of their time and are low-risk.
You can find more information on business process outsourcing on Wikipedia: https://en.wikipedia.org/wiki/Business_process_outsourcing
or on the website of the outsourcing consultant insourcing-outsourcing (in German, however): http://www.insourcing-outsourcing.net/business-process-outsourcing-bpo-definition-ziele-beispiele/