What is What is business process outsourcing??
What is business process outsourcing?Business process outsourcing (BPO) means paying an outside firm to run a whole business function such as customer support, payroll, or IT helpdesk. The provider owns the people, process, and technology, and it bills you for output, not for the hours.
BPO is the subset of outsourcing that focuses on repeatable, high-volume work. When the same functions move to a lower-cost country, the setup is called offshoring.
Common categories include customer support, finance and accounting, HR administration, IT helpdesk, and other back-office work, plus higher-value knowledge processes such as analytics and research.
Precedence Research sizes the global BPO market at USD 347.95 billion in 2025 and USD 384.14 billion in 2026, on the way to USD 906.27 billion by 2035 at a 10.05% CAGR.
Key takeaways BPO shifts a defined function to an external provider under a written contract.
Pricing falls into per-FTE, per-transaction, outcome-based, gainshare, or hybrid buckets.
Precedence Research puts the global market at USD 384.14 billion in 2026.
The Philippines and India lead delivery, with Latin America taking the nearshore share.
A service level agreement sets the quality bar and the remedies when it is missed. How it worksBPO works by transferring a defined process to a specialist vendor under a written contract. You keep strategic control; the provider owns staffing, tools, training, and daily execution. Pricing follows per-seat, per-transaction, outcome-based, or hybrid models.
Companies choose BPO for three reasons — lower cost, access to specialized talent, and the ability to turn fixed headcount into variable operating expense. Most enterprise buyers chase two of the three in one contract.
Most engagements start with discovery: the client documents the process, sets KPIs, and defines escalation paths. The provider then hires, trains, and shadows before going live, typically 6 to 12 weeks.
The pricing model decides who carries risk. Per-seat fees suit steady volumes; outcome-based fees push accountability onto the provider.
Most contracts carry a service level agreement that ties bonuses or penalties to agreed targets. Build off-boarding clauses in at the start so the work can move if performance slips.
Model
How you pay
Best for Per FTE (seat)
Fixed monthly rate per agent
Steady-volume work like inbound support Per transaction
Set fee per call, ticket, or invoice
Variable-volume back-office tasks Outcome-based
Tied to a KPI like CSAT or collections
Mature processes with clean metrics Gainshare
A share of the savings created
Cost programmes with a clear baseline Hybrid
Base FTE rate plus variable bonus
Long-term partnershipsContracts usually run 2 to 5 years with annual price adjustments. The upside is cost reduction of 30–60%, faster staffing, and 24/7 coverage from follow-the-sun teams.
The trade-off — management overhead, cultural distance, and dependency on one provider for critical work — is real.
Provider selection now weighs security posture and data residency more heavily than a decade ago. GDPR, HIPAA, and PCI-DSS obligations flow from the client to the provider. Contracts spell out audit rights, penalties, and breach reporting windows.
Location choice matters. Providers in the Philippines and India deliver English-language support at 40–70% below onshore rates.
Nearshoring to Mexico or Colombia buys time-zone alignment instead of the deepest discount. Onshoring stays domestic and costs the most — but keeps data and staff under one legal system.
ExamplesBPO delivery clusters into four archetypes: voice-led call center hubs, knowledge process shops, nearshore bilingual centers, and global finance and technology towers. The providers below show how each one prices, staffs, and locates its work.
Philippines call centers. Buyers often start here. English fluency, Filipino traits and values, and a Western-facing service culture cut onboarding friction.
The country remains the top outsourcing destination for voice work heading into 2026.
The IT and Business Process Association of the Philippines (IBPAP) puts the sector at 1.9 million workers and USD 40 billion in revenue. Its roadmap targets 2.5 million jobs by 2028.
Concentrix, Teleperformance, and TDCX all run major Manila and Cebu call center campuses. For a shortlist, start with the Top 40 BPO companies in the Philippines.
That list pairs with this guide to call centers for hire, which covers seat counts and shift patterns.
India knowledge process outsourcing. Knowledge process outsourcing firms in Bengaluru and Gurgaon handle equity research, legal review, and analytics for Wall Street clients.
WNS, Genpact, and EXL all built multi-billion-dollar businesses on that work, and their contracts increasingly bundle analytics on top of transaction processing.
Latin America customer support. Colombia, Mexico, and Costa Rica attract US fintechs and SaaS platforms that want Spanish-English bilingual agents inside a US business day.
Buyers compare those providers through review directories such as Clutch's BPO category before shortlisting.
Global finance and technology towers. Accenture, IBM, and Cognizant deliver ERP support, cloud operations, and finance and accounting from delivery hubs in Poland, Ireland, and India.
Those contracts often span 5 to 10 years and blend BPO with technology services, so they read more like joint ventures than vendor deals.
Enterprise deals are also becoming more outcome-linked. Rather than paying per seat, buyers increasingly pay for defined KPIs like first-call resolution or completed orders, which pushes performance risk back onto the provider.
Precedence Research's 2035 forecast of USD 906.27 billion is more than double the 2026 figure, and the money is following accountability rather than headcount.
Related termsThese terms sit next to BPO without meaning the same thing. Some name where the work goes, some name the type of work, and one names the contract that governs it.
Offshoring: the practice of moving business functions to distant, lower-cost countries. Nearshoring: outsourcing to a nearby country in a similar time zone, often for language or cultural fit. Onshoring: outsourced work that stays inside the client's home country. Knowledge Process Outsourcing: higher-value analytical or specialist work such as research and legal review. Call Center: a facility built to handle inbound or outbound customer calls at scale. Back-Office: the non-customer-facing operations that keep day-to-day business running. Service Level Agreement: the contract clause that sets performance targets and remedies for a deal. FAQBuyers ask the same six questions before signing a BPO contract. The answers below cover the plain definition, how BPO differs from outsourcing, what it really buys, which countries lead delivery, and how to pick a provider.
What is BPO in simple terms?BPO is when a company hires another business to run a specific function such as customer service or payroll. The client sets the outcomes and pays the bill; the provider handles the daily work and the staff.
What is the difference between BPO and outsourcing?Outsourcing is the umbrella term for contracting any external provider, including one-off projects. BPO is the subset covering whole functions like call centers, HR, or accounting, so every BPO deal is outsourcing but not the reverse.
Is BPO only about cost savings?No. Cost is the entry point, but mature buyers cite specialist talent, 24/7 coverage, and the ability to scale up or down as the bigger long-term wins. Cost-only deals tend to churn within 18 months.
Which countries dominate BPO?The Philippines leads voice and English-language customer support. India dominates IT and knowledge process work. Mexico, Colombia, and Costa Rica anchor Latin America's nearshore market for US clients.
What functions do companies outsource most often?Customer support, IT helpdesk, finance and accounting, HR administration, and content moderation lead the pack. Higher-value work such as data analytics and legal review is growing fastest.
How do I choose a BPO provider?Match the provider's specialization to your function, check references in the same industry, and shortlist candidates with the Ultimate Guide to Outsourcing.
Explore vetted providers side by side in Outsource Accelerator's BPO Directory.
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What is a Startup?
StartupA startup is a young company built to find a scalable business model for a product with broad demand. Founders chase growth on thin capital, and many hire outsourcing partners early to stretch runway while they still hunt for their first paying users.
Most startups spend their first two years chasing traction rather than profit. Founders juggle product, sales, hiring, and finance at once — which is why lean teams route non-core work to specialist vendors.
The playbook has hardened since 2020. Startups now open offshore delivery pods in the Philippines, India, and Latin America, often before the seed round has even closed.
That shift changes how you should read the label. A startup is defined by its search for a repeatable model, not by its office, its headcount, or where its staff happen to sit.
Key takeaways A startup is a growth-focused venture built around a scalable, repeatable business model.
Outsourcing keeps headcount lean while founders still ship product and answer customers on time.
The global business process outsourcing (BPO) market is projected to reach USD 347.95 billion in 2025.
Commonly outsourced functions include customer support, bookkeeping, back-office admin, and design.
Offshore hubs like Manila and Bengaluru host teams for Wells Fargo, Google, and thousands of scaling firms. How it worksA startup begins with a founding team, a market thesis, and seed capital, then iterates until the model repeats. Once traction shows, founders raise larger rounds and blend in-house hires with outsourced delivery teams to hold costs down.
Growth gets measured against a short list of numbers. Most operators track burn rate, monthly recurring revenue, activation, and retention alongside the key performance indicator (KPI) targets set in each vendor contract.
Outsourced work runs under a service level agreement (SLA) — the contract that fixes quality bars, uptime, and turnaround times. That layer lets a 10-person startup ship like a 50-person one without adding payroll.
The global outsourcing market sat at roughly USD 347.95 billion in 2025 and is forecast to grow at a 10.05% CAGR through 2035. Founders now pick from a far deeper vendor bench than they had five years ago.
The IT and Business Process Association of the Philippines (IBPAP) publishes the sector's industry roadmap. Its 2024 count put Philippine IT-BPM revenue near USD 40 billion across 1.9 million workers, targeting 2.5 million by 2028.
Statista tallied more than 150 million startups launched worldwide each year in its 2024 startup outlook, a bigger founder pool than any prior decade.
McKinsey State of the Startup research finds founders who outsource non-core work early raise their next round 6 to 9 months faster than peers.
Startup outsourcing model
Best for
Typical team size
Typical saving Freelance or project
Minimum viable product (MVP) builds, one-off design
1 to 3 specialists
40–60% vs local Managed BPO team
Support, back-office, ops
5 to 25 seats
60–70% vs local Dedicated offshore staff
Long-term product and engineering
10 seats and up
50–70% vs localModel choice usually tracks stage. Pre-seed founders lean on freelancers for speed, while Series A teams move to a managed BPO for repeatable ops.
Series B teams and beyond build dedicated offshore squads reporting to a home office manager, usually in Manila, Bengaluru, or Bogotá. That structure trades higher setup cost for direct control and stronger retention.
ExamplesStartups use outsourcing to punch above their weight, and the pattern repeats across every venture-backed cohort. Consumer apps, fintech, and healthtech teams route support and back-office work to partners while product stays in-house.
WhatsApp kept its engineering team under 55 people through the USD 19 billion Facebook acquisition in 2014, routing infrastructure and support work outside the core team.
Slack used contract designers and offshore quality assurance through its 2013 to 2014 launch, holding in-house talent on the product surface.
Airbnb built photography, customer service, and trust and safety operations with partners across Manila and Ireland before its 2020 public listing.
Klarna and other European fintechs pushed back-office reconciliation and know your customer checks to nearshore hubs in Portugal and Poland — their engineering teams stayed home.
Enterprise players run the same playbook at scale. Wells Fargo has operated a Manila hub since 2011, and Google has worked with Philippine BPO partners since 2016.
Directory data on Clutch lists thousands of vendors serving startups, from single assistant shops to 5,000-seat contact centres. A Series A team can find a partner sized to its runway.
Founders can size the options with Outsource Accelerator's outsourcing calculator before signing any vendor paperwork.
The Top 40 BPO companies in the Philippines guide gives a curated shortlist to work from, sorted by seat count and specialism.
OA's insider read on why the Philippines has become the top outsourcing destination covers labour law, talent depth, and cost bands.
Outsourcing for startups then walks through the first roles most founders send offshore and what each one costs to run.
Related termsStartup outsourcing sits inside a wider vocabulary of delivery models and support functions. These are the terms a founder is most likely to meet inside the first year of building the company, and each one changes how a contract gets priced.
Outsourcing: contracting a business function to an external provider. Offshoring: moving work to a distant, lower cost country for delivery. Nearshoring: shifting work to a nearby country in a similar time zone. Back-Office: the admin functions that keep a business running day to day. Knowledge Process Outsourcing: outsourced work needing specialist analytical or domain skill. Call Center: a centralised voice team handling inbound or outbound customer contact. FAQ What counts as a startup?A startup is a company under roughly 5 to 7 years old, still searching for or scaling a repeatable business model. Once revenue and org structure settle, the label gives way to growth-stage or simply small business.
When should a startup begin outsourcing?Founders usually outsource once repeatable, non-core work absorbs more than a day each week, often around seed stage. The first roles sent offshore are customer support, bookkeeping, and virtual assistants. Later rounds add engineering and product design.
How much can a startup save by outsourcing?Offshore delivery in hubs like the Philippines can cut staff costs by 60 to 70% against US or UK rates, depending on role and vendor model. Freelance work saves less but scales faster. The gap widens for niche roles where domestic hiring is tight.
Startup outsourcing versus hiring a freelancer — what's the difference?A freelancer is a single contractor engaged directly for defined deliverables. Outsourcing means partnering with a BPO firm that runs a managed team, handles HR, and reports against agreed SLAs.
Where can founders learn more before signing a contract?The Ultimate guide to outsourcing walks through delivery models, contract risk, and vendor selection in one place.
For a curated shortlist of vetted delivery partners across support, marketing, and back-office work, browse Outsource Accelerator's outsourcing hubs.
What is a Virtual Assistant?
Virtual AssistantA virtual assistant (VA) is a remote contractor who handles admin, technical, or creative work for a business without an in-office seat. VAs bill hourly, part-time, or by retainer, and cover inbox triage, bookkeeping, research, scheduling, or light project help online.
The category grew out of the remote work shift documented in Buffer's State of Remote Work reports and the wider outsourcing push after Tim Ferriss's 2007 book The 4-Hour Workweek. Today most VAs sit in the Philippines, India, or Latin America.
Founders lean on VAs to buy back 10–20 hours a week; larger firms embed them inside sales, HR, or back office teams.
Precedence Research put the wider BPO market at USD 347.95 billion in 2025, with roughly 10% CAGR through 2035 — and VAs sit at the individual-contractor end of that spectrum.
Key takeaways A virtual assistant is a remote human contractor, not a bot or AI tool; this is the labour definition.
VAs typically bill $6–$25/hour in 2025; agencies and direct offshore hires fall inside that band.
Common tasks span admin, calendar, bookkeeping, research, social scheduling, and light creative work.
The Philippines leads global VA supply; India and Latin America follow closely. How it worksA VA runs work off your systems, not theirs — you grant email, tool, and drive access, agree on a scope and pay cycle, then track output on a weekly cadence. Contracts usually sit under service level agreements or simple statements of work.
Hiring routes fall into three buckets, and the rate you pay signals which one you're using.
Freelance marketplaces price highest because you carry the vetting risk yourself. Agencies charge a small premium for HR cover and bench redundancy. Direct offshore hires cost the least but need the most day-to-day management.
Route
Best for
Typical rate (USD/hr)
Notes Freelance marketplaces (Upwork, Fiverr)
One-off tasks, short projects
$8–$40
You manage the relationship and the risk VA agencies
Ongoing support, vetted talent
$10–$25
Agency handles HR, payroll, cover Direct offshore hire
Long-term, dedicated seat
$6–$15
Lowest cost, more management overheadFull-team offshoring or fully managed outsourcing sit further along the spectrum, where the vendor owns recruitment, training, and KPIs.
US firms that later flip a VA to W-2 need an employer identification number and must report new hires to state agencies within 20 days.
ExamplesThree common VA setups show how the model flexes across company size. Solo founders hire one part-time VA for inbox and travel; growing SaaS teams bring a full-time VA into sales; larger firms embed offshore VAs alongside domestic staff as a cost lever.
A US e-commerce founder might hire a Manila-based VA for 20 hours a week to run customer email, refund cases, and product listings, a common shape flagged in Indeed's VA career guide.
Most VAs bill $6–$25 per hour — Philippine-based generalists at the low end, US-based specialists at the high end.
A 30-person legal firm might stand up two India-based paralegal VAs to handle document review at a fraction of local rates; the work sits closer to knowledge process outsourcing than pure admin.
A UK insurer might sit VAs inside a contact centre to triage first-line email, freeing agents to focus on complex calls and customer experience (CX) work. ContactBabel benchmarks confirm this hybrid is now standard.
A B2B SaaS founder in Berlin might hire a Buenos Aires-based VA for calendar and lead qualification, matching European hours in the morning and stateside hours later. That time-zone stack is one pure Manila hires cannot cover alone.
Related termsVAs sit inside a wider vocabulary of outsourcing labels — the neighbouring terms below clarify where the VA role ends and where other outsourcing shapes begin. Each term maps to one of the hiring or delivery models covered above.
Freelancer: a self-employed contractor selling skills project-by-project; VAs are the admin-leaning subset. Business process outsourcing: full-function delegation to a vendor; VAs are the individual-hire counterpart. BPO: the industry acronym for the same idea, tracked near USD 348 billion by Precedence Research. Call center: voice-first service operation; VAs sometimes overlap on inbound queues. Nearshoring and [onshoring: //www.outsourceaccelerator.com/glossary/onshoring/)**: location choices when latency, culture fit, or compliance rule out offshore VAs.For market context, IBPAP put Philippine IT-BPM headcount at 1.9 million in 2024, with a growing share running as solo VAs. Buyer reviews on Clutch and background at Wikipedia) further help you vet agencies.
FAQCommon questions about hiring, cost, scope, and freelance overlap for virtual assistants. Each answer below sits at 1–3 sentences so it lifts cleanly into FAQPage schema and answers the buyer question in the first line.
What does a virtual assistant actually do?VAs cover inbox management, calendar scheduling, travel booking, expense tracking, CRM data entry, social-media queuing, invoice chasing, and light bookkeeping. Skilled VAs also handle research, content editing, and light design or dev tasks.
How much does a virtual assistant cost?Most VAs bill $6–$25 per hour, with Philippine-based generalists at the low end and US-based specialists at the high end. Talent.com tracks similar bands, and the US Bureau of Labor Statistics put the equivalent median wage near USD 39,680 in 2024.
Is a virtual assistant the same as a freelancer?Not quite. Every VA is a freelancer, but most freelancers are not VAs; the VA label implies an ongoing, admin-leaning relationship rather than one-off project work.
What tools does a VA need?Most VAs need shared access to email, a project board like Asana or ClickUp, and a shared drive. A password manager and a video-call tool round out the standard stack.
Where do VAs typically live?Most VAs sit in the Philippines, India, or Latin America. The Philippines leads for English-first admin and CX work; India dominates on technical, dev, and paralegal tasks.
How do I hire and manage one well?Start with a written scope and a weekly hour cap. Track output on one shared board and pay on time.
Browse our vetted BPO directory to shortlist agencies and independent VAs today.
What is a Freelancer?
FreelancerA freelancer works for themselves, selling skills to several clients at once without any employer contract. You hire one for a defined piece of work, pay for the output, then part ways or book them again. There's no payroll, no benefits, no desk.
The label covers a wide field. A Manila-based virtual assistant (VA) taking Upwork gigs, a New York software developer on retainer with three startups, and a UK copywriter billing hourly all qualify. What ties them together is the contract shape, not the trade.
Freelance work now feeds a large slice of the global services labour pool. The business process outsourcing (BPO) market forecast from Precedence Research put that market at USD 347.95 billion in 2025, compounding at roughly 10% a year through 2035.
Independent workers ride the same demand curve as agency staff — the buyer choosing between a solo contractor and a vendor team looks at the same task list.
Key takeaways A freelancer bills per project or per hour, never per pay period.
Freelancing and outsourcing overlap, but a BPO firm employs its agents while a freelancer employs herself.
Rates swing hard by geography: a Philippine freelance admin runs USD 5–10 an hour where a US equivalent runs USD 25–40.
Marketplaces handle discovery, escrow and payment, and keep 5–20% of the contract; your terms and intellectual property (IP) protection stay your job.
Scale past two or three freelancers and coordination cost pushes you toward business process outsourcing. How it worksA freelancer signs a scope of work with each client, delivers against milestones, and invoices on completion or on a fixed schedule. You pay an hourly or per-deliverable rate, and you carry none of the employment overhead a payroll hire brings.
The economics fall out roughly like this.
Rate model
Typical use
2025 range (USD) Hourly, offshore
Philippine admin, VA and back-office support
5–10/hr Hourly, onshore
US admin, design and development support
25–40/hr Hourly, all markets
ongoing admin, development, VA work
5–60/hr Per project
design, copywriting, one-off builds
150–5,000 Retainer
marketing, legal, bookkeeping
500–4,000/mo Per deliverable
content, translation
0.05–0.50/word Marketplace fee
escrow and payment handling
5–20% of contractSource: hourly, project, retainer and per-deliverable bands from Talent.com aggregated 2023–2024 freelance-marketplace listings. The fee band reflects what the major platforms take on escrowed work.
Discovery usually happens on marketplaces like Upwork, Fiverr, Toptal and PeoplePerHour, or through direct referral. The platform holds funds in escrow, releases them on client approval, and takes its cut. Direct referral costs you less and takes longer to trust.
Milestones do the quality control a manager would otherwise do. Most buyers split a build into two or three payable stages and hold the final tranche until the handover files land.
The paperwork is on you. Send a non-disclosure agreement (NDA) and an IP assignment before the first hour is billed, and write the revision count into the scope so one more pass has a price.
Classification is the other thing to get right. A freelancer who works your hours, under your supervision, on your kit starts to look like an employee to a tax authority, whatever the contract calls them.
Past two or three freelancers, coordination cost climbs fast. That's when buyers usually shift to a full outsourcing arrangement and move the work offshore or nearshore — one vendor then owns the team, the rota and the quality bar.
ExamplesFreelancers cluster where demand for flexible, specialised skill outruns the willingness to hire full-time. These four patterns turn up on almost any 2023–2025 project roster, from solo creatives to Manila VAs running a client's whole back office remotely.
Content and copy (2024). A US software company hires three freelance copywriters through Contently for 40 blog posts across the year at USD 0.35 a word. Total outlay lands near USD 42,000, against roughly USD 90,000 for one in-house writer.
At that word rate, USD 42,000 buys about 120,000 words, so those 40 posts average around 3,000 words each.
Virtual assistants in the Philippines (2025). A Sydney e-commerce brand runs inbox, order tracking and social replies through two Manila VAs sourced on OnlineJobs.ph. Combined cost is USD 1,000 a month, about USD 500 a head, or some USD 12,000 across the year.
That's roughly a quarter of the Sydney in-house equivalent, implying about USD 4,000 a month locally for the same two seats.
Software development (2024). A UK fintech contracts a Ukrainian back-end developer on Toptal at USD 75 an hour for a six-week application programming interface (API) integration. On a 40-hour week, that lands close to USD 18,000 for the whole build.
Design (2023). A Toronto agency taps 99designs for a logo refresh: five concepts, USD 899, one-week turnaround. No annual retainer, no scope creep, no bench to keep busy afterwards.
The pattern holds across all four — freelancers win on unit cost and on speed, and lose on continuity. Each engagement ended the day the deliverable landed, which suits a project with an end date and sinks a function that runs every morning.
Related termsFreelancing sits inside a wider vocabulary of independent work and vendor models. The cluster below marks out who does the work, from where, and under what contract. The line to watch is who employs the worker, because that decides who carries the payroll risk.
Outsourcing: contracting a whole function to a vendor firm rather than to a solo worker. Business Process Outsourcing: the industrial version, where a vendor runs whole back-office teams against a signed service level. Offshoring: moving work overseas, whether to a freelancer, an agency or a subsidiary. Nearshoring: the same move, but to a country in a nearby time zone. Back Office: the admin, finance and staffing work many freelancers and BPO teams handle. Knowledge Process Outsourcing: higher-skill research and analytics work, done freelance or by a firm. Call Center: phone-based support run by employed agents rather than by freelancers. FAQ Is a freelancer the same as an independent contractor?Broadly yes, in tax and legal terms. Independent contractor is the classification the Internal Revenue Service (IRS) or HM Revenue and Customs (HMRC) uses; freelancer is the working label. Both describe a self-employed worker paid per engagement, not through payroll.
How does hiring a freelancer differ from outsourcing to a BPO?A freelancer is one person on a direct contract with you. A BPO firm employs a team, carries the staffing overhead, and reports against a service level agreement. Freelancers scale by the head; BPO vendors scale by the process.
What do freelancers cost compared to full-time staff?Roughly 40–70% cheaper on a total employment cost basis — geography decides where you land. A US firm hiring a Philippine admin at USD 8 an hour skips benefits, payroll tax, office space and the 30% loaded-cost multiplier a domestic hire carries.
Where do most freelancers work from?The Philippines, India, Ukraine and Latin America dominate the offshore end. The IT and Business Process Association of the Philippines (IBPAP) counted 1.9 million information technology and business process management workers in 2024, and many of them work solo.
Do freelancers sign NDAs and IP agreements?Yes, when the client sends one. Marketplace platforms embed a baseline NDA in their terms, but anything sensitive needs a bespoke agreement covering confidentiality, IP assignment and non-compete. Sign it before work starts, not after.
What's the biggest risk of hiring a freelancer?Availability, because freelancers juggle several clients, so build a bench of two per role and pay a small retainer to your first choice.
Ready to move past ad-hoc freelance hires? Explore OA's outsourcing hubs to compare vetted BPO providers by country and specialty.
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Independent
