Understanding the BPO Industry and Types of Outsourcing

Key Takeaways

Since the 2010 milestone of becoming the world’s call center capital, the Philippines continues to be one of the leading BPO capitals in the world today. Being one of the fastest-growing and sustainable industries, the country has approximately 788 BPO companies operating nationwide as of 2023 according to the Philippine Economic Zone Authority (PEZA). The BPO industry in the Philippines consists primarily of outsourcing call centers. While customer service is one of the most well-known aspects, the industry actually encompasses a wide range of services beyond just customer support.

To understand what BPO truly is, let’s begin with defining its existence and purpose.


Defining BPO

BPO stands for business process outsourcing. It is a business model wherein a company outsources or contracts with an external service provider to perform and deliver essential business functions or responsibilities previously done in-house. This is to optimize operations and lessen costs within the company — wherein a process that is identified to be necessary but not a core value proposition within its business model is delegated elsewhere to be accomplished by an external service provider. A few examples of such processes are payroll and accounting, customer care, account management, sales and marketing, and the like

Types of Outsourcing Models

Outsourcing benefits companies of all sectors and sizes, whether it be in the Philippines or in countries beyond our seas. It has three (3) variations known as onshoring, offshoring, and nearshoring.


Onshore Outsourcing

With onshoring, you outsource services with a provider who works outside of your company but still within the same country as you. This is also known as “local or domestic outsourcing”. This method typically offers better levels of quality and security, but costs will be higher.

Offshore Outsourcing

As such, for many companies, offshoring is a better solution cost-wise. In offshore outsourcing, it involves contracting talents and or services with a provider from another country, typically one located geographically far or remote from your country of business.

Nearshore Outsourcing

With the third model, it emerged post-globalization and is relatively new. In nearshoring, one entrusts tasks or operations to neighboring countries in order to take advantage of similarities in time zone and culture, while still achieving lesser costs. This model is popular with newer companies and is expected to be integrated more in established companies over the years.

Whereas for BPO companies, outsourcing means exporting relevant and highly sought talents and services to the numerous client bases located in various locations, be it domestic or international, in order to increase their work efficiency and be able to focus on core operations and larger initiatives.

BPO Services

From resolving customer worries, creating sales reports, handling employee payrolls, quality control, and other fundamental tasks, one can only do so much until the company hits a bottleneck because they don’t have enough hands on deck to accomplish other important projects. Now, this is where BPO steps in. Plenty of opportunities arise within the BPO industry due to the constant expansion of business endeavors to address the diverse needs of clients and overall growth and development of the company.

These opportunities range widely beyond just customer care and support. For those who enjoy personal interactions with customers or if you are someone who prefers working diligently behind the scenes, a job that’s fit for you is certainly waiting for your resume.

Stay at the forefront of the industry. Learn valuable insights and empower your business. AZPIRED has solutions from A to Z for all your outsourcing needs. Visit us at https://azpired.com/.

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