3 Types of Outsourcing

Types of OutsourcingIt is a huge challenge to every company today to find a niche or at least make one that can be promising in saleability. Many companies take the risk of shelling out extra expenses that can’t even guarantee a stable harvest. This leads these companies to resort to offshore outsourcing their back office work for lesser financial risk. Outsourcing can be branched down into three departments, respectively the following: Business Process Outsourcing, Technology Services Outsourcing and Knowledge Process Outsourcing.


Business Process Outsourcing

Amongst its class, Business Process Outsourcing (BPO) has the most popularity and is currently the mainstream offshore outsourcing industry’s flesh and blood. The rise of BPO can dated back in the mid 90’s, where Online Marketing was starting to kick off.

Operational functions that are involved in this type of outsourced office solution are the following:

  • Media Outsourcing
  • Customer Relations
  • Logistics
  • Procurement
  • Security
  • Accounting
  • Equipments
  • Procurement
  • Documentation
  • Insurance
  • Healthcare
  • Manufacturing

In the field of Business Process Outsourcing, office operations especially those that does not fall under the core competency of a company or team are the tasks that are usually outsourced.

The Business Process Outsourcing tasks can be further pinned down into two separate functions, the front office and back office.


Front Office

This function deals with customers relations, acting as the main communicator for the company to its customers or vice versa. Specific roles are: customer service representatives, marketing staff and technical support.

Back Office

The specific roles for this department are more concerned with internal work, more specifically the following: billing, transcription, payroll and etc.


Technology Services Outsourcing

The rapid innovation of the human lifestyle – getting more and more technology bound, businesses needs to adapt to this trend in order to keep up with the competition and not get left behind.That is why businesses today greatly need to invest on some cutting edge or technologies and infrastructures. Aside from that, modern technologies can make it easier for businesses to deliver their services or deliver their message towards their clients.

Technology Services that are commonly outsourced includes the following:

  • Website development
  • telecommunications
  • electronic commerce
  • applications and software development
  • network infrastructure

Gathering an in-house team to perform such function is apparently more costly and could not promise a top of the class result. That is why hiring a third party firm that is well equipped with the expertise that could bring down such tasks mentioned above is more practical in terms on the capital expenditure and performance.


Knowledge Process Outsourcing

This is a more difficult and sophisticated form of outsourcing that is highly similar to BPO. Providers of KPO tasks are expected to be autonomous and independent. Research, technical and analytical skills is the bread of the providers for this type of offshore outsourced task. The client and the provider each has a very straight forward role where in clients will just lay out all f the instructions and the provider will deliver as stated. Aside from that, KPO specilists/provider has full control over the task, it is solely provider centered. More of ten than not, the output of a KPO task is the basis of a company’s operation.

Knowledge Process Outsourcing tasks includes the following:

  • Content Writing
  • Database Developement
  • Intellectual Property Research
  • Pharmaceutical Research and Development

One Comment

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