The Quick and Essential Guide to Business Process Outsourcing

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The Quick and Essential Guide to Business Process Outsourcing

Business Processes Outsourcing Basics

In today’s globalized economy, over 160,000 active businesses partake in business process outsourcing, solely from the United States. Suffice to say, the BPO industry is booming.


You might wonder, “Why are businesses switching from in-house provision to BPO vendors?”


Simply put, it’s because of the competitive advantage and valuable benefits that BPO can offer for your business functions.


Business process outsourcing, commonly referred to as BPO, involves contracting out work processes or functions to an external service provider.


These functions can include payroll, IT outsourcing, back-office support, customer management, and more.


For example, at STAFFVIRTUAL, we offer all the above!


STAFFVIRTUAL's solutions




There are primarily three types of BPO:


  • Onshore outsourcing involves working with contractors in the same country but who might be located in a different state or city.


  • Nearshore outsourcing comprises vendors in countries or regions neighboring the company’s home country.


Business process outsourcing (BPO) is a great way for companies of all sizes to grow by leveraging professional services. Whether you're looking to specialize your core competencies or unburden your busy operations, outsourcing work to a BPO provider can be a brilliant move for your business.


In this comprehensive guide, discover what BPO is, what business functions you can use it for, why it’s beneficial, and how to get started!


The Main Types of Services that Businesses Outsource

Outsourcing is often synonymous with IT outsourcing. A staggering 64% of outsource operations are rooted in offshore information technology operations. However, there are several other services a business can consider when outsourcing! These include the following.


Human resources

HR processes have grown more complex and time-consuming over the years. As the power structure in most businesses grows and as companies becoming increasingly global, the core values of diversity, transparency, and responsibility have also changed.


Business process outsourcing can help businesses reduce the administrative costs of HR and make internal processes transparent for everyone. Outsourcing HR processes can bring down the total cost of hiring new workers and the cost of paying their benefits.


Businesses can shift hiring to a suitable outsourcing provider (for example, for global talent acquisition programs). The outsourced service provider can hire and train, monitor, and mentor the workforce, which will then be managed strategically by the business itself.


Customer service

Customers' expectations are constantly rising, and there is little room for error when managing the customer experience.


Businesses today outsource customer service to customer support experts through call centers and artificial intelligence-enabled chat services (think: chatbots). Depending on the global location and time zone, they can provide solutions quicker and more efficiently to customers looking for an immediate solution.



Companies that outsource their payroll save an average of 18% more than businesses that keep everything in-house. Companies can easily partner with vendors to better manage payroll, payment processing, and account handling for employees. This can also better streamline payments, leading to staff satisfaction from being paid the right amounts at the right times.



Businesses that utilize third-party service providers to handle their accounting can benefit from reduced costs. This is because accounting firms are trained to handle in-depth bookkeeping and financial management for their clients.


Startups aren’t the only businesses that opt for accounting outsourcing services. Bigger companies also opt for BPO services in this function because of the lower costs and time savings it provides!


IT services

Your business can outsource many IT services to reduce costs, such as software development, data management, help desk support, and more!


Outsourcing allows companies to outsource their IT departments to increase their efficiencies. Still, businesses should only outsource the tasks that they can afford to delegate to managed service providers, e.g., process automation. It’s generally ideal to maintain the core business in-house to retain full control while outsourcing the secondary business activities to third-party vendors.



Here, you can outsource your sales representatives, packing and warehouse functions, and even market research tasks. Businesses can reduce the cost of advertising by outsourcing marketing, as they can pay professionals based on the contracts that they work for. Quality assurance can also be maintained by working with experts who know how to close deals and bring in more customers!


Administrative tasks

As the culture of remote working and online collaboration kicks in, more and more businesses are adopting virtual assistants (VAs) into their business model, especially small businesses.


VAs handle everything for their designated function—from handling emails to scheduling meetings and even social media posting (think: marketing!). Outsourcing business processes to VAs can also bring about cost savings as VAs starting rates begin at as little as $10 per hour.


Learn How to Get Started


Is BPO Right For You? The BPO Benefits

Outsourcing work is a lot more common than you think. In fact, most companies outsource at least one function to another company. You may only do it once or twice, but then again, it might be so important that you hire someone to do it for you full-time!


Companies outsource functions for many reasons. They want to save money on labor costs; they want to get new technology that they don't know how to implement, or they just don't have the right people on staff to get the job done right.


Whatever the reason, the growth of the outsourcing industry is undeniable.


Here are the major benefits you stand to gain from working with an outsourcing company:

  • Cost reduction: Through BPO, you can achieve cost efficiency. BPO provides a gateway for companies to streamline processes, raise productivity, and increase profitability in their businesses by sourcing insights from experts and working in cost-advantageous regions.


  • Refocus on and prioritize key functions and activities: BPO gives companies an opportunity to focus on core competencies while partnering with a service provider that can manage non-core areas. By assigning business processes to experts, your business can focus on the highest value activities and deliver enhanced value to your customers!


  • Expand global presence: BPO can allow companies to expand their customer base and introduce their products/services to new geographic markets. How so? By allowing companies that do not have the physical space to accommodate a growing workforce to outsource that function.


  • Improve speed and efficiency: BPO can help companies become more adaptable and competitive by allowing them to focus on what matters most. Instead of having an in-house team manage shipments, customer service, or IT​ needs, outsourcing to a BPO provider frees up your resources to work on core processes. When the outsourcing is completed responsibly, companies can boost their bottom line.


  • Provides flexibility: Be it through offshoring, onshoring, or nearshoring, BPO allows companies to boost the flexibility of their workforce by delegating non-core business processes. The dependence on full-time staff is reduced since you’re bringing in experts from global regions.



Business process outsourcing is a cost-effective solution for companies that need to outsource their processes and free up their time and resources.


For companies looking to outsource, it’s important to do their homework—the outsourcing process is vital to your long-term success and should be carefully considered before you make a decision.


With the advancement of technology, companies can now send jobs anywhere in the world, including the Philippines!


The Philippines is one of the largest countries in the world for providing business process outsourcing. In fact, 16 out of the top 20 offshore call center projects in 2016 were in the Philippines and up to 10% of the country’s economy can be attributed to outsourcing!


With STAFFVIRTUAL, you can begin outsourcing to the Philippines effectively.


Get your free outsourcing plan today!


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Ike Stranathan

Ike Stranathan

Ike Stranathan founded STAFFVIRTUAL in 2009 after moving to the Philippines from California. Ike lives just a block from his offices in Makati, Philippines, and is passionate about helping companies achieve dynamic growth by outsourcing.

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