How to Choose Between the Different Types of Outsourcing

How to Choose Between the Different Types of Outsourcing

If you are running your own business, at some point you’ll have to consider outsourcing a portion of your work. Outsourcing is a budget-friendly option that helps you get the job done, since it doesn’t require you to employ an additional workforce full-time. With outsourcing, you are basically acquiring services from another company or an individual who has expertise in a particular field and the skills you require.

So, if you are a writer, you might outsource the artwork creation process for your book to a graphic designer; if you are a small business owner, you might outsource call center services to another company that offers them.

Basically, there are two types of outsourcing, BPO and KPR, and they will be discussed in the following article. Depending on the task you need to outsource, you’ll choose between these two types.


BPO is short for Business Processing Outsourcing, and it’s a type of outsourcing that focuses on certain tasks, so to speak. These tasks can range from manufacturing products to providing services. BPO commonly consists of back office or front office work, and you have numerous people working for a specific business.

KPO is short of Knowledge Processing Outsourcing, and it is a somewhat new type of outsourcing. KPO is used when your current staff lacks the necessary expertise in order to complete a certain assignment. It is a process that includes a lot of research, data mining, data analysis and many other information-based activities.

Here are the examples of BPO services:

  • Customer Support Services
  • Technical Support Services
  • Data Conversion Services Scanning
  • Insurance
  • Services Form Processing Services
  • Bookkeeping and Accounting
  • Telemarketing Services
  • Employee IT Help-desk Services
  • Processing Data Entry Services
  • OCR with Editing & Indexing Services

Now here are some examples for KPO services:

  • Analytics
  • Design & Animation
  • Business Research
  • Marketing Services
  • Market Research Outsourcing (MRO)
  • Financial Research Outsourcing (FRO)
  • Engineering Service Outsourcing (ESO)
  • Legal Process Outsourcing (LPO)
  • Publishing Outsourcing

So, you use your BPO when you lack the manpower or time to complete certain tasks. These tasks are time-consuming, so you choose to outsource them to people who can do them more efficiently. In other words, you save money when you rely on BPO.

KPO is used when you and your team lack proficiency to complete something, which is why KPO is way more expensive than BPO. The objective of KPO is to supply quality, so the price is not the primary concern, but a BPO is used for efficiency and for better budget management. Another difference is location, since KPO is not an in-house solution; whoever is employed to do something can do it from their home. BPO needs a site where it can operate, so it’s location dependant.

To conclude, if you rely on KPO services too much, it might be better to hire a new team member with expertise, but if you need to cut down on some of the expenses, then you should consider outsourcing some of time-consuming tasks like data entry and direct your workflow towards something more useful and lucrative.

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