Glossary - Business Process Outsourcing (BPO) Terms
Affiliate – an entity that controls or is controlled by another entity
Benchmark – a standardized task or measure of quality that is used to compare products, services, and/or processes with those of other companies or organizations
Business Process – refers to a set of structured tasks done to meet a specific company goal
Business Process Outsourcing (BPO) – refers to the process of transferring a particular business task, operation or process to a service provider that is located in a country where labor and operational costs are lower; this is done to reduce overall costs and enable the company to concentrate on its core competencies
Buyer – a company/organization that buys services to a service provider or another company
Call Center – a facility or area within a service provider that is designed primarily to manage telephone calls, whether to answer incoming calls or make calls to customers, or both
Cost of Living Adjustment (COLA) – refers to the yearly adjustment in wages based on the changes in the cost of living index
Core Competencies – refer to the key areas of expertise that play a significant role in the growth of the company; these are the distinctive features of the company that make it different from the competitors
Finance and Accounting Outsourcing (FAO) – a form of outsourcing that involves transferring the financial processes of the company to a service provider
Governance – the method of overseeing and managing all aspects of the outsourcing process
Human Resources Outsourcing (HRO) – a form of outsourcing wherein the management of HR functions is transferred to another company
Knowledge Process Outsourcing (KPO) – a form of outsourcing wherein knowledge-related tasks are done by highly skilled workers in another company
Market Research – the process of collecting data that will enable a company to determine its target market and understand their interests and preferences, as well as the right marketing campaigns for its products/services
Nearshoring / Nearshore Outsourcing – refers to the process of transferring specific business tasks to a service provider located in a different country that is relatively close in terms of distance
Offshoring / Offshore Outsourcing / Offshoring Outsourcing – the transfer of specific business processes from one country to another
Onshoring / Onshore Outsourcing – the transfer of specific business processes to a service provider within the country where labor and operational costs are lower
Outsourcing – the process of contracting a service provider to perform tasks that are previously done in-house
Procurement Outsourcing (PO) – a form of outsourcing that involves the transfer of procurement-related tasks and processes to a service provider
Recruitment Process Outsourcing – refers to the process of contracting a service provider to perform the recruitment process/tasks of the company
Service Level – pertains to the level of performance or extent to which the service provider satisfies the buyer's requirements
Service Provider – a company/organization that provides services to a buyer or another company
Sourcing Advisor – a person who creates an outsourcing deal that is suitable for the buyer and/or service provider; he/she plays an important role in any outsourcing transaction
Strategic Outsourcing – refers to outsourcing that enables a company to concentrate on its core competencies to achieve its business goals
Termination – the act of ending the contract between the buyer and service provider