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What is BPO? And other outsourcing terms defined

Posted September 25, 2018
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Growing and established companies have one incredibly important thing in common: They need to take care of their customers. After all, keeping existing customers happy is often less expensive than acquiring new ones.

In order to delight customers, brands are viewing their journey as a whole — from awareness of the brand, to purchase, to setup, to interaction with the product or service, to engagement with a community of fellow users through social media — all the way to customer support.

When companies look to engage an expert partner to help manage some elements of their customer experience, they may consider outsourcing. But all too often, the industry caters to insiders who already understand the core value proposition and speak in industry vernacular.

For those who aren’t experienced outsourcing industry veterans, an initiation into the world of outsourcing can be instructive and helpful. That’s why we’ve created this simple list of key terms and their definitions.

Here’s a quick breakdown of some of the more popular terminology and acronyms used in the industry to get you up to speed in no time.

Outsourcing terms and definitions:

  • BPO/ Business Process Outsourcing: A subset of outsourcing in which a company contracts the operations and responsibilities of a specific business process to a third-party service provider.
  • CCO/ Contact Center Outsourcing or Call Center Outsourcing: The best-known form of outsourcing, where brands contract traditional contact center functions like voice, chat, and social media-based customer service to an outside service provider.
  • ITO/ Information Technology Outsourcing: A technical subset of outsourcing that involves the contracting of traditional IT services like networking and programming to a third-party service provider.
  • KPO/ Knowledge Process Outsourcing: A form of outsourcing where companies contract with a third-party provider on high-value services such as research and information gathering, legal and medical services, training, consultancy, scientific research and development, animation and design, etc.
  • LPO/ Legal Process Outsourcing: Used by firms to complete legal services, often of the relatively low-value or labor-intensive variety.
  • Back Office: In outsourcing, provided services are normally broken down into back office and front office. Back office services are internal business functions and typically include human resources, finance and accounting, among others.
  • Front Office: Front office services are characterized by their direct interaction with customers in departments such as customer service, sales, marketing and technical support.
  • Offshore: When a third-party service provider performs duties in a country not bordering or near the country where the contracting company maintains its primary business operations. For instance, if a U.S.-based company outsources IT services to India, then that arrangement is called “offshoring.”
  • Nearshore: When a third-party vendor performs services in a country that is geographically near to the hiring company’s home country. For instance, if a U.S.-based company outsources back office operations to Mexico or Central America, then the arrangement is called “nearshoring.”
  • Onshore: When a third-party service provider performs work in the same country as the client’s primary business operations. For instance, if a U.S.-based organization outsources its contact-center operations to a U.S.-based company, then that arrangement is called “onshoring.”
  • Customer Service: Often synonymous with customer support, customer service is when workers assist and advise customers of a particular company across a variety of channels, including voice, email, chat, SMS and self-service. Customer service most often includes assisting customers in troubleshooting problems with a product, paying bills, buying, exchanging or returning a product, etc.
  • Customer Care: Though closely related to customer service, customer care is often a more proactive approach by a company to ensure satisfaction, continuous engagement and delight with a product or service after purchase.
  • Customer Experience (CX): The entire set of interactions between an organization and its customer throughout the duration of their relationship, before purchase and throughout every touchpoint.
  • Digital Experience (DX): The interaction between customer and brand as made possible by technology.
  • Multichannel Customer Support: Multichannel customer support means that a company offers their customers support or service through more than one distinct channel. Those channels may or may not be integrated or consistent in terms of quality of service or messaging.
  • Omnichannel Customer Support: The ability to engage customers across multiple contact channels, while ensuring intelligent and seamless integration of information across those channels. More importantly, it hinges on delivering a consistent customer experience regardless of the number and choice of channels.
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Once you’ve got an understanding of the key terms and how they may impact your business, you’ll be ready to engage with an outsourcing provider. The right partnership with the right provider can help you take your customer experience — and your business’ growth trajectory — to the next level.

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