BPO stands for business process outsourcing. It means contracting a specialist company to run a defined, repeatable part of your business, such as answering customer calls, processing invoices or booking appointments, instead of doing that work with your own employees.
We run a BPO in Dumaguete City, Philippines, so this guide is written from the provider side of the table. It covers what the term means, the main types, how providers charge, and the questions we would want a buyer to ask us.
What BPO means in practice
A business process is any task that happens the same way many times: a support call, a payroll run, a data entry batch. Outsourcing it means another company supplies the people, the management and often the systems, and you measure them on the result.
BPO is different from hiring a contractor for a one-off project. The work is ongoing, it follows your rules, and the team usually works your hours and represents your brand.
The main types of BPO
BPO is usually grouped two ways: by the kind of work and by where the team sits.
By the kind of work
- Front office BPO covers work that touches your customers: phone and chat support, answering services, order taking, appointment setting and outbound sales calls.
- Back office BPO covers internal work: bookkeeping, accounts payable and receivable, data entry, document processing and recruiting support.
- Knowledge process outsourcing is a term for more specialized work such as research, analysis or legal and medical support tasks.
By location
- Onshore: the provider is in your own country.
- Nearshore: the provider is in a nearby country in a similar time zone.
- Offshore: the provider is further away, usually to reach a larger or more affordable labor market. The Philippines and India are the best known offshore locations for English language work.
We compare these options in more detail in our guide to outsourcing vs offshoring.
How BPO providers charge
There are four common models. Knowing which one a quote uses tells you a lot about how the service will behave.
- Per seat or per full time person. You pay a fixed monthly amount for each dedicated person. It suits steady work where the same people need to know your business. Dedicated teams are usually priced this way.
- Per hour. Similar to per seat but billed on hours worked. It suits part time or variable needs.
- Per minute or per transaction. You pay for each call minute, ticket or document. Agents are usually shared across many clients. It suits low or unpredictable volume.
- Outcome based. You pay per sale, booked meeting or collected payment. It aligns incentives but needs careful definitions of what counts.
Dedicated team or shared pool
This is the choice that most affects quality. In a shared pool, agents handle many clients and read your script from a screen. In a dedicated team, the same people work only on your account and learn your products, customers and exceptions.
A shared pool costs less at low volume. A dedicated team costs more per call but handles judgement calls, complaints and anything outside the script far better.
Signs your business is ready
- The same task is done many times a week and can be written down.
- Your own staff are pulled off higher value work to do it.
- You are missing calls, replies or deadlines because of capacity.
- You need coverage outside your office hours.
- You can name a person on your side who will own the relationship.
If the work changes every time or needs decisions only you can make, it is not ready to outsource. Write the process down first.
Risks and how to manage them
- Quality drift. Agree how quality is measured before launch, review real calls or work samples every week at the start, and keep a named contact on both sides.
- Data security. Give access to the minimum each role needs, use your own systems where possible and put data handling terms in writing.
- Loss of knowledge. Keep process documents in your own files so the knowledge does not sit only with the provider.
- Mismatched expectations. Start with one process and a small team. Expand after it works.
Why so much BPO work goes to the Philippines
The Philippines has provided English language support to North American companies for decades. English is used in schools and business, the service culture is strong, and the industry has its own trade body, the IT and Business Process Association of the Philippines. The US business day falls on the Philippine night shift, and Australian hours overlap almost exactly with the Philippine day.
Questions to ask any BPO provider
- Will the same people work on my account every day?
- Who manages them, and how often will I speak to that person?
- How do you measure quality, and can I see the reports?
- Which systems will the team work in, and who controls access?
- What is the smallest team you will take on?
- What happens if the work is not meeting the standard?
Frequently asked questions
What does BPO stand for?
Business process outsourcing: contracting another company to run a routine business function for you.
Is a BPO the same as a call center?
No. A call center is one type of BPO. BPO also covers back office work such as bookkeeping, data entry and recruiting support.
Is BPO only for large companies?
No. Many providers require large minimum teams, but boutique providers work with small businesses and regularly start with one or two people.
What is the difference between BPO and outsourcing?
Outsourcing is the general idea of using an outside company. BPO is outsourcing applied to an ongoing business process, as opposed to a one-off project or manufacturing.
Sources
About eleVAte BPO. eleVAte began in 2015 with two virtual assistants in Dumaguete City, Philippines, and is still run by its founders. Co-Founder and CEO Claire De La Pena spent almost two decades as an executive virtual assistant before building the company, which is now a 50 seat operation providing dedicated support, sales and back office teams. Meet the leadership team.
Last reviewed October 2026. This guide is general information and not legal, tax or financial advice.
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