I'm Confused: What Does BPO mean?

I'm Confused: What Does BPO mean?

Business Process Outsourcing (BPO) is the fastest-growing industry in the Philippines, dominating the job market and contributing over 11% of the country's GDP. The initiative started over 20 years ago and has employed millions of Filipinos, making it a crucial contributor to the country's economy.

I'm confused. These are all the highly-technical nerdy stuff. What does BPO mean, and why has it become one of the most critical sectors in the country?

Investopedia.com defines BPO as subcontracting various business-related operations to third-party vendors. Sounds complicated again, right? But, BPO is similar to when you enlist the help of someone to carry out a specific task for you. In return, you pay them for their services.

For example, your household needs pest control. Instead of doing it yourself, you outsource companies that offer services to address your concern saving you from all the unnecessary work and hassle compared to doing it yourself. But BPO is more than just getting rid of cockroaches and insects.

It is an industry that now employs millions upon millions of professionals from all over the world. Globally, BPO is valued at $250 billion, according to industry research, in 2021. From start-ups to huge businesses, decision-makers opt to outsource services from experts to address certain gaps in their respective organizations.

The growth in the number of companies choosing to outsource certain roles to BPO companies is attributed to the efficiency that this option offers. Instead of allocating time and resources to core skills and disciplines, which the BPO company can provide at a fraction of the cost, they can now focus on developing their respective products and brands.

This also explains the growing number of BPO companies involved heavily in providing services such as customer support, sales, technical assistance, and many others to brands of all natures.

One of the many reasons BPO has always been at the forefront of the economy is its flexibility. The global pandemic is a testament to this, as most traditional businesses had to close down due to health protocols. While most organizations closed down and did not survive, the BPO industry found a way to keep doing business by taking advantage of information technology.

By the second quarter of 2020, most BPO companies came up with streamlined processes, which paved the way to a work-from-home setup using technological infrastructures to carry on with day-to-day tasks. This means that workers can provide support and services from the comfort of their homes, minimizing the potential risks and expenses for the business and its BPO partner.

BPO is here to stay. It is the future! If you're going to look at big companies and brands, in one way or the other, they outsource specific roles in their process. Not only is it strategic for them, but it also ensures that they onboard experts in their respective fields.