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TYPES OF

INDUSTRY
BPO is referred to as Information Technology-Enabled Services
(ITES). This is because most business processes include some form of
automation and information technology devices such as computers that
"enable" these services to be performed. This encompasses careers in
software development, data entry, programming, and web development
services.

BPO is distinct from Information Technology (IT) outsourcing, which


focuses on hiring a third-party company or service provider to do IT-related
activities, such as application management and application development,
data center operations, or testing and quality assurance. The Philippines is
currently among the most cost competitive destinations for IT-BPO
services.

An offshoot of BPO is Knowledge Process Outsourcing (KPO)


Considered by some to be a subset of BPO, KPO includes those activities
that require greater skill, knowledge, education, and expertise to handle.
This may include services in financial analysis and legal services.
BPO is often divided into two main categories:

1. Back Office Outsourcing- This includes internal business functions such as billing,
purchasing, payroll of employees, and other similar tasks.
2. Front Office Outsourcing – This includes customer-related services such as
marketing or technical support.

Based on the location of hiring and contracting, BPO may be categorized as:
1. Offshore Outsourcing – is outsourcing contracted outside a company's home
country. This is done when high-volume, low-complexity tasks are processed in a
country with a significantly lower cost base than where the service has become
more sophisticated. For example, the UK: traditionally India, but more recently
China, the Philippines, Malaysia and some South American countries.
(e.g., Numerous UK-based BPO companies such as Vertex and Capita Group are now
providing offshored services to their clients through their operations in the
Philippines.)
2. Nearshore Outsourcing - BPO that is contracted to a
company's neighboring country. The cost base of these
countries is still lower, but geographical proximity and cultural
similarities can create an easier working relationship. A good
relationship, cultural similarities and absence of
communication gap can result in a more complex work being
transferred easily. For Western Europe, this is to Eastern
Europe. For the United States this is to Canada and Mexico.
(e.g., Tony Lee, an information management supplier based in
the US near-shored the development of its computerized
purchasing system to Advance Programs, a commercial
systems solution provider in Canada.)
3. Onshore - is an entirely different scheme. It is the practice
of obtaining business-critical, high-level services from
someone not employed by the company, but within the same
country. Onshore services are unique for each company.

(e.g., When Burger King Corporation, a US-based chain of


restaurants, lost its laboratories in the havoc created by
Hurricane Andrew in1992, the company was forced to
outsource its quality assurance functions to other companies
in the US. Burger King still outsources its quality assurance
functions onshore even after rebuilding its laboratories
because it allows the company to make productive use of its
internal resources.)
KNOW THIS!

A. BPO Industries
DIRECTIONS: Write BOO if the example describes back office outsourcing and FOO if
it describes front office outsourcing.
__________ 1.A telecommunications BPO firm which deals with repair and
maintenance of one’s internet connection.
__________ 2. A BPO company which accommodates payroll services
__________ 3. A company which assists customers on US Phone directory services
__________ 4. A company that takes orders of products
__________ 5. A BPO accounting firm that manages sales accounts of other companies.
_________ 6. A bank- associate BPO that updates customers on their debit and credit
accounts.
__________ 7. An office that deals with purchasing raw materials for another company
__________ 8. A firm that entertains medical insurance claims
__________ 9. A document management BPOs that keep copies of financial
transactions for filing of taxes
__________ 10. A call center firm that assists customers on computer hardware repair.
KNOW THIS! (KEY ANSWERS)

A. BPO Industries
DIRECTIONS: Write BOO if the example describes back office outsourcing and FOO if it describes front office outsourcing.
____FOO_____ 1.A telecommunications BPO firm which deals with repair and
maintenance of one’s internet connection.
____BOO______ 2. A BPO company which accommodates payroll services
____FOO______ 3. A company which assists customers on US Phone directory services
____FOO______ 4. A company that takes orders of products
____BOO______ 5. A BPO accounting firm that manages sales accounts of other
companies.
____BOO_____ 6. A bank- associate BPO that updates customers on their debit and
credit accounts.
____BOO______ 7. An office that deals with purchasing raw materials for another
company
____FOO______ 8. A firm that entertains medical insurance claims
__________ 9. A document management BPOs that keep copies of financial
transactions for filing of taxes
_____FOO_____ 10. A call center firm that assists customers on computer hardware
repair.
1.G
2.E
3.B
4.E
5.A
6.D
7.F
8.C
9.B
10.A