What Is Offshore BPO?

Offshore business process outsourcing, also known as offshore BPO, is a strategy that involves choosing to outsource various business services essential to the operation of a domestic company to providers that are located in other nations. This type of strategy can often save a great deal of time and money, allowing the domestic companies to operate with fewer employees while still managing all essential services. A number of companies provide offshore BPO for such important functions as accounting, invoicing, payroll, customer service, and even the management of investment accounts.

One of the main benefits of using offshore BPO is the ability to manage essential tasks while still reducing operational costs. For example, rather than maintaining an accounting department that handles tasks such as invoicing, posting customer payments and calculating taxes, these functions can be outsourced to an offshore provider for a fraction of the costs involved in maintaining full-time employees and supplying them with benefits. The client can then use the money saved from outsourcing for other tasks, such as marketing existing products, mounting a sales campaign, or even developing new products.

Another benefit of offshore BPO is the ability to have access to experts who can manage the tasks with a greater degree of proficiency. From this perspective, a small company stands to not only save money while still making sure essential business tasks are managed, but also to have access to professionals with a great deal of experience and expertise. This combination can often be very attractive to businesses of all sizes, especially when the foreign provider is able to offer those benefits at prices lower than domestic providers.

There is some difference of opinion when it comes to using offshore BPO. Some see this as a great way to save money and allow a company to remain competitive in the marketplace, since they can afford to offer goods and services at lower prices. Since higher business volume means more job security for those who are employed by the firm, using an offshore outsourcing approach can be seen as a way of keeping businesses open and jobs safe that would otherwise be lost if the company could not compete and had to close. A different school of thought holds that the use of offshore BPO removes jobs from the local economy and increases the potential for higher unemployment levels if those people are unable to secure employment elsewhere. Proponents of the latter understanding tend to focus more on other ways to cut costs and keep jobs locally, rather than outsourcing tasks to international providers.