What is Business Process Outsourcing (BPO): Complete Guide

Check every small detail about BPO Business Process Outsourcing through this guide. Check BPO Definition, types, working, benefits, collection process, and satisfaction of customers.

July 17, 2023


15 Minutes


Writer at SquadStack - Saumya Singh


The BPO stands for 'Business Process Outsourcing' means outsourcing various functions like customer support, customer satisfaction, data entry, accounting, and human resources to an external service provider outside the company. In simple words, BPO can be defined as a situation when a external agency,  firm or service provider is hired to improve the efficiency of these business process services tasks. This hiring is also done to reduce costs to set these services in-house and improve focus on core activities.

In Business process outsourcing customer service means handling customer service queries through channels like chat, email, phone, social media, replies through app support etc. BPO services include a range of business tasks or processes depending on the needs of an organization. Some common examples of services offered are shared below.

  • Finance and Accounting
  • Human Resources (HR)
  • IT Help Desk
  • Content Moderation and
  • Back-office Operations
  • Support for Sales and Marketing.
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Five Different Types of BPO Services and their Benefits

In this fast-moving world, Business Process Outsourcing has emerged as a crucial strategy for companies located around the world to improve efficiency, reduce costs, and increase focus on core business works. There are many types of processes services, and each type caters to unique needs and requirements.
By going through these five different types of BPO services, enterprises can easily take a decision about which services to outsource. This Outsourcing business process will reduce costs by filling distinctive roles by acquiring unique abilities. These five different types of BPO services are Back-Office, Front-Office, Offshore, Nearshore and Onshore.

Five Different Types of BPO Services
Image - Five Different Types of BPO Services

The Benefits of these different types BPO's are shared below.

Back Office Outsourcing Services: Back office is a service that does not interact with the customer. Back office types of business process outsourcing includes IT services, human resources, quality assurance, accounting, etc. The data entry roles like updating records or processing forms outsourcing can also be counted in back office.  Back office services include tasks like sorting, organizing and validating data.

  1. If a company outsources the HR administrative tasks such as employee onboarding and benefits administration, it is counted as Back office services. 
  2. Many companies outsource payroll processing, leave management, records management, and new employee joining, also known as Back office services.
  3. Back office also involves financial and accounting tasks. 
  4. Back office BPO is also useful for managing documentation, filing and record keeping.
  5. Back office involves maintaining and organizing physical or electronic records.

What is Average Handle Time in a BPO?

Front office Outsourcing Services includes roles such as customer facing tech support, sales service, and internal marketing functions like social media marketing. Outsourcing is necessary for certain tasks that require technical expertise. The roles which involve interaction with people and are apart of Front Office.

Offshore Process Outsourcing Services: When services are outsourced outside the native country of the company due to low labor costs and tax savings are known as Offshore BPO services. There are many types of call centers located in countries like India, Bangladesh etc. These results in cheaper rates due to low labor costs.

Near Shore Outsourcing Services: Some countries have low-cost outsourcing facilities located in the native country of the company, which has higher outsourcing facilities. This type of outsourcing is known as Near Shore business processes outsourcing services. Some of the benefits of Near shore types BPO's are provided below:

Onshore/ Domestic Outsourcing: Squadstack can manage 170k+ leads and handle 100k+ customer calls daily. It has 300k+ daily touchpoints across omnichannel. Squadstack offers its customers upsell, assisted onboarding and pre-sales, sales and renewals and lead qualification services to companies. When a company in India utilizes the services of Squadstack, this type is referred to as domestic outsourcing because Squadstack's headquarters are in India.

Also check: Understanding the Different Types of Call Centers

What is Customer Service in BPO?

Business Process Outsourcing needs to support customers to whom they provide services. Customer service in a BPO is support offered by customer care executives to customers before and after customers buy products or services.

BPOs must offer good customer service to retain old customers and maintain brand value. A BPO providing good customer service to clients can lead to a positive experience for the client.

Importance of Customer Service in BPOs?

Customer service is important in handling the issues faced by customers. These issues can be resolved through customer outreach channels like text messages, phone calls, email messages, online chatbots, and social media channels. The importance of customer service in BPO is as follows:

  • Increase customer retention: Every business needs new customers but also needs to retain old ones. This can only be possible with excellent customer service.
  • Boost customer satisfaction ratio: The customers taking telecalling, sales calling, inbound calling, outbound calling, and other required services from BPO should be satisfied.
  • Deliver high-quality service in real-time: Delivering high-quality services through various outreach channels is crucial. There is a need to hire good customer care representatives and quality agents for this.
  • Improve customer loyalty: When a BPO provides good customer service, the customers become loyal.
  • Positive word of mouth: This can be the best advertising method when customers tell about your services to other customers via word of mouth.

What is Collection Process in BPO?

How does a BPO (Business Process Outsourcing) Work ?

In this fast-paced business world, companies constantly check for ways to improve and optimize operations and enhance efficiency. For example, there can be chances that the in-house telecalling team is insufficient, so there is a need for an external telecalling agency. This external telecalling agency can prove a cost-effective source to connect with your customers. It can seen that outsourcing can help in many ways, so let us check how does a BPO work? The work process involves the following fuctions

BPO Sales & Operations Outsourcing: Outsourced business process firms act as external support to increase prospects and nurture untouched leads in your sales funnel stages. This team can provide valuable insight into customer service and focus on flaws that act as a sales stoppage.

Lead Qualification Works: Business Process Outsourcing (BPO) plays an important role in the lead qualification. These lead qualification calls help companies understand the needs of potential bulk leads, resulting in a successful conversion. The varios functions of lead qualification calls are shared below: 

  1. Assessing Client Needs
  2. Establishing Compatibility
  3. Setting Expectations with client
  4. Ask Open-Ended Questions
  5. Listen Actively to understand the needs of Customer
  6. Showcase Expertise in various sales qualification processes 
  7. Schedule one on meeting with client 

Lead Qualification Made Easy With SquadStack

Why Choose SquadStack for LQ - Business Process Outsourcing
Image - Why Choose SquadStack for Lead Qualification

Quality Assurance and Improvement: These Business process services provider is responsible for delivering high-quality services. The BPOs must provide a set of guidelines to their agents so that they provide good quality services to their customers. So BPOs work on improving the quality of calls. 

Continuous Monitoring and Communication: The client and BPO must set up regular meetings. Both should works on each process and reviews performance in these meetings, which helps them to help track progress and address concerns.

For Example, SquadStack's fully managed telecalling stack relies on a human and AI-powered continuous quality monitoring process, which makes it a crucial infrastructure component to track the progress of its customers.

Contract negotiation: Finally, after the client has selected a BPO provider, many contract terms come into the picture, leading to the negotiation of contract terms. 

BPO Telecaller and its Duties

BPO Telecallers are essential as they act as a direct link between the company and its customers or potential clients. BPO Telecallers have the ability to handle calls professionally, communicate effectively, and meet specific performance targets. BPO Telecallers should display excellent communication skills to initiate telephonic conversation with existing and prospective clients.

Telecaller Roles and Responsibilities
Squadstack has India's best telecallers that can boost the calling campaigns of any company. The roles and responsibilities of a BPO telecaller are shared below: 

Outbound Calls: Making outbound calls to customers or leads for various purposes, such as sales, customer surveys, lead generation etc.

Inbound Calls: Handling incoming calls from customers and providing them with assistance and resolving complaints. Thus BPO telecallers guide customers through the appropriate channels for further support.

Customer Support: Providing customer support and resolving issues or concerns through phone communication.
Sales and Telemarketing: Pitching products or services to potential clients and convincing them to make a purchase.

The Power of Sales Outsourcing: Meaning and Benefits

Major Advantages and Disadvantages of BPO

BPO has many advantages, including the fact that it focuses on core competencies such as customer service marketing and finance. It also has many other benefits, such as increasing speed, accuracy and productivity. It can help companies expand globally. BPO's has some disadvantages, such as a lack in authority and control, communication gaps or delays, security risks and less transparency. The advantages and disadvantages of BPO are shared below: 

Advantages & Disadvantages of Business Process Outsourcing
Image - Advantages & Disadvantages of BPO

Major Differences Between BPO and BPM 

Business process management and outsourcing are two different concepts in this fast-moving world. BPO and BPM have their benefits, but they are different in processes. BPO involves the process of outsourcing tasks or processes to a third party to increase the efficiency of operations. On the other hand, managing an organization's operations is known as Business Process Management (BPM). The major differences between BPO and BPM are shared below:

Difference Between BPM & Business Process Outsourcing
Image - Difference Between BPO and BPM

Quality in BPO Business Process Outsourcing

Knowing the quality standards in Business Process Outsourcing is very important to increase customer satisfaction. In BPO, quality means that agents must follow instructions and guidelines to deliver excellent customer service. Quality instructions and guidelines are agreed upon by both the company and the client, particularly when making sales calls.

Roles and Responsibilities of Quality Analyst in BPO

  • Quality Analyst is responsible for monitoring the services provided to clients and evaluating their quality. 
  • Quality Analysts ensure that BPOs meet quality standards, adherence to scripts and that agents meet client expectations. 
  • By tracking and evaluating the processes and providing feedback, they help to provide high-quality services.
  • A Quality Analyst's responsibilities include monitoring quality, evaluating performance, improving processes, ensuring compliance and analyzing root causes.
Roles and responsibilities of a Quality Analyst in Business Process Outsourcing
Image - Roles and responsibilities of a Quality Analyst in BPO

Quality Parameters in BPO

Call quality parameters are the standards or metrics that are used in BPO to evaluate interactions between customer service representatives and their customers. Call quality parameters include call resolution rate (CRR), call handling time (CHT), average handle time (AHT), and customer satisfaction score (CRR). There are several benefits of using Call Quality parameters in BPO. 

  • Improved Client experience while calling.
  • Improved Employee engagement 
  • Data-Driven decision making
  • Process Optimization
  • Improved First Call Resolution Rates (FCR)
  • High Connection Rate

Customer Satisfaction in a BPO (Business Process Outsourcing)

Customers' problems must be resolved quickly because customers are key to any industry. In BPO, customer needs to be satisfied with customer service support, after-sales, and their experience during the customer journey. The level of client satisfaction can measure the company's performance.

How to Measure CSAT or Customer Satisfaction?

CSAT, or Customer Satisfaction, can be measured in many ways. These are the most common methods:

  1. Customer satisfaction surveys and forms.
  2. Social Media Networks and Online Reviews.
  3. Customers who return to purchase products and services are rewarded.
  4. The customer Churn rate of the company
  5. Net Promoter Score of the company
Business Process Outsourcing Customer Satisfaction
Image - How to satisfy Customers in BPO

What is Collection Process in BPO (Business Process Outsourcing) ?

The process, which includes strategies to clear debts and payments from business clients and companies, is the Collection process in BPO. In the collection process, the collection team takes a deep dive into the company's accounting books and evaluates the records. Once the record is removed, the team contacts debaters to complete the collection process. Sometimes Business process management uses telecalling software to prepare a report to track connected call details.

Key Roles and Responsibilities in BPO

In an outsourcing company, employees must perform their duties to provide customers with the most satisfactory services. Companies assign specific technical tasks to specialized employees in this exciting outsourcing world. A customer care executive is responsible for solving the queries of customers. They act as the first point of contact for customers. At the same time, a team leader is responsible for checking the team’s performance. The team leader is also responsible for efficient processes and maximizing team performance.

Customer Service Representatives (CSRs): In a BPO or call center, a person who answers the phone is called a Customer Service Representative (CSR). Customer service representatives are responsible for assisting and resolving customer concerns and complaints.

Data Entry Specialist: A BPO will call a person who is responsible for entering product information into the computer system a Data Entry Specialist.

Technical Support Specialist: Imagine that your smartphone suddenly stopped working and you don't know what the problem is. You'll most likely get a Technical Support specialist when you call the manufacturer's customer service line.

Is BPO and Call Center Same?

No. both call centers are not the same. Business Process Outsourcing provides a pool of talented people who are well-versed in modern technologies like Artificial Intelligence and machine learning. In contrast, Call centers are responsible for providing a dedicated team of telecallers that manage the telephone of companies. These call centers are responsible for handling the calls of customers, their queries, complaints, and sales questions. A BPO can function as call center but a call center cannot function as BPO. Companies always need expert Telecallers to grow their Business. Select the best telecaller that suits your needs and enhances your connectivity.

Difference between BPO and Call Center

BPO (Business Process Outsourcing) and a call center handle specific customer interaction tasks. The various differences between a BPO and call center which are are shared below:

Image Showing - Various Differentiating factors between a BPO and Call center.

Attrition Rate in BPO

Attrition is the percentage that employees leave a company within a specified period. Employees leaving an organization has a significant impact on efficiency in Business Process Outsourcing. Attrition rates in BPO can also impact service quality due to retirement, resignations, relocations, or career changes. The formula for calculating Attrition rate in BPO is as follows:

Attrition Rate = (Employees who leave the organization during a specific period / Average number of employees in organization in that specific period) multiplied by 100

Squadstack offers a complete Telecalling solution for your business. Squadstack has no fixed costs. It has the best connectivity and CRM analytics. Squadstack provides the most reliable telephony partner in India. You can book a demo with Squadstack.


What is a BPO or Business Process Outsourcing?


Business Process Outsourcing, can be defined as a situation when a company hires another external agency, company, firm or service provider to improve the efficiency of these business process services tasks, reduce costs to set these services in-house and improve focus on core business activities.

What is quality assurance and what are roles and responsibilities of quality analyst in BPO?


Quality in BPO means agents must follow guidelines and instructions to provide excellent customer service. The roles and responsibilities for a Quality Analyst include monitoring and evaluating services, and making sure that quality standards are met. They also ensure that agents are meeting client expectations.

What is Customer satisfaction in Business Process Outsourcing?


Customers' problems must be resolved quickly because customers are key to any industry. In BPO, customer needs to be satisfied with customer service support, after-sales, and their experience during the customer journey.

What Is Collection Process In Business Process Outsourcing?


The process, which includes strategies to clear debts and payments from business clients and companies, is the Collection process in BPO.

What are various functions of Lead qualification calls in Business Process Outsourcing?


The various functions of BPO lead qualification calls are assessing client needs, establishing compatibility, setting expectations with client, ask open-ended questions, listen actively to understand the needs of customer, showcase expertise in various sales qualification processes and schedule one on meeting with client .

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