What is an Outsourcing Company?
What is an outsourcing company?An outsourcing company handles various supporting processes of contracting companies. These supporting processes are activities that are not central to the company's business but cannot be done away with. Examples include payroll, customer service, accounting, IT, etc.
A great outsourcing company is someone that has proven expertise in the process to be outsourced, that has access to resources and technology not otherwise available to the contracting company. For a contracting company to fully leverage the advantage of outsourcing, it is preferable that the outsourcing company will have it's own key performance indicators to help drive innovation and growth for the contracting company.
Outsourcing companies in the PhilippinesOutsourcing evolved a lot during the past decade, it is no longer all about customer service outsourcing. Nowadays, it is very common to outsource other functions such as finance & accounting, lead generation, software development or digital marketing. Outsourcing is also applicable to any industry and any business size, as long as the job can be done in front of a computer, then it can be outsourced.
Outsource Accelerator's directory lists over 700+ outsourcing companies in the Philippines. All of these are carefully selected for innovation, expertise, and technology that will benefit our clients. We also provide you with guidance on how to maximize the potential that such expertise gives you in growing your business.
Offshore outsourcing definition
What Is Offshore Outsourcing? Definition and ExamplesOffshore outsourcing is the practice of contracting business functions to a third-party provider in a distant country — usually to cut labour costs, tap specialised talent, or extend operating hours. The word "offshore" signals the geographic gap, often a different continent and time zone.
It sits inside the broader outsourcing family but is not the same thing. Domestic outsourcing keeps the work in the same country. Nearshoring sends it to a neighbouring market. Offshoring moves it far away, typically from a high-wage economy to a lower-cost one.
The model became mainstream in the 1990s as fibre-optic networks made it cheap to route calls and data across oceans. Today it powers everything from a London bank's overnight processing desk to a Sydney startup's first product designer in Cebu.
You'll see the term used loosely. Some firms mean a captive office they own abroad. Others mean a BPO contract with an external vendor. Both fit, so long as the work crosses a border and lands in a distant country.
How it worksA buyer in one country signs a service agreement with a provider in another. The provider hires, trains, and manages the staff locally. The buyer keeps the customer relationship, owns the IP, and pays a monthly fee that bundles wages, overheads, and the vendor's margin.
Three engagement shapes dominate:
Model
What the buyer rents
Best for Project outsourcing
A fixed-scope deliverable
One-off builds, migrations Managed services
A team plus the process
Long-running functions like payroll Staff leasing Named seats under buyer direction
Embedded teams, gradual scale-upCosts typically land 50–70% below equivalent in-house roles in the United States, United Kingdom, or Australia — depending on the destination and skill level. Manila and Cebu sit at the deeper end of that range for English-led customer service. Bengaluru and Hyderabad lead on enterprise software.
Contracts usually cover service levels, data security, exit terms, and IP ownership. Mature buyers also write in a "right to audit" clause and a plan for how knowledge transfers back if the deal ends.
ExamplesConcrete cases make the model easier to picture.
JPMorgan Chase runs major back-office and technology hubs in Manila and Bengaluru, employing tens of thousands across both. The bank uses these sites for transaction processing, application support, and analytics work that runs overnight relative to its New York desks.
Canva, the Sydney-based design platform, has built one of its largest engineering and support footprints in the Philippines since around 2018. It uses the offshore team for product engineering and 24/7 customer support, not just low-cost ticketing.
Google operates a Manila office focused on advertising operations and trust-and-safety functions for the broader Asia-Pacific region. It is a captive offshore site rather than a vendor contract, but the model is the same.
Smaller buyers use the same playbook on a smaller scale. A 40-person law firm in Melbourne might offshore document review and bookkeeping to a Source Boost partner in Manila — freeing local solicitors to bill more hours on advisory work.
Related terms Business process outsourcing (BPO): The parent category. Offshore outsourcing is one geographic flavour of BPO. Nearshoring: Same idea, but the provider sits in a neighbouring country rather than a distant one. Onshoring: Keeping the contracted work inside the buyer's home country. Reshoring: Pulling previously offshored work back home, often for resilience or policy reasons. Captive center: An offshore site the buyer owns and staffs directly, instead of going through a vendor. Staff leasing: A contract type where the buyer directs named offshore seats day-to-day while the vendor handles employment. Knowledge process outsourcing (KPO): Higher-end offshore work like research, legal analysis, or actuarial modelling. FAQ Is offshore outsourcing the same as offshoring?Not quite. Offshoring just means the work moves abroad, which can be to a captive office the buyer owns. Offshore outsourcing adds a second condition: a third-party provider does the work under contract.
Why is the Philippines the largest destination?The country's IT-BPM sector employs around 1.9 million people and generates roughly USD 40 billion a year, according to IBPAP. It pairs strong English proficiency, ranked 28th globally by the EF EPI 2024, with cultural affinity to Western markets and lower labour costs.
What functions are most commonly offshored?Customer service, finance and accounting, IT support, software development, virtual assistance, and back-office admin. Higher-end work like legal research, actuarial analysis, and creative production has grown faster than the older call-centre base over the past decade.
How much can offshore outsourcing actually save?Buyers typically see 50–70% off fully loaded salary costs, with the deeper savings on entry-level roles and the shallower end on senior or specialised hires. Real savings depend on attrition, training time, and how much management bandwidth the offshore team consumes.
What are the main risks?The honest ones are communication gaps, data-security exposure, regulatory friction across jurisdictions, and dependence on a single provider. The World Bank flags digital-economy regulation as a moving target buyers should track in any destination market.
Should small businesses consider it?Yes, and many already do. A two-seat virtual assistant arrangement in Manila or Cebu is a common first step for owner-operators in Australia, the United Kingdom, and the United States who want to claw back their evenings without hiring locally.
If offshore outsourcing might fit your roadmap, browse our BPO directory to shortlist providers by country, function, and team size before you book a discovery call.
What is Back Office?
Back OfficeThe back office is the internal side of a business (finance, HR, IT, data, admin, compliance) that keeps operations running without touching the customer. It's usually where 40% to 60% of the workforce sits and where the biggest outsourcing gains hide.
Front office wins deals. Back office keeps the lights on. Every invoice paid, payslip filed, ticket resolved internally, and system patched sits in the back office.
Since roughly 2005, back office has been the single most-outsourced function in global business. Genpact, spun out of GE that year, built a USD 4 billion business almost entirely on back-office contracts. Most of the Fortune 500 followed.
Precedence Research put the global BPO market at USD 347.95 billion in 2025, growing at 10.05% CAGR through 2035. Back-office functions account for roughly 60% of that spend.
Key takeaways Back office = finance, HR, IT, admin, data, and compliance — everything that isn't sales, marketing, or direct customer service.
40% to 60% of a typical business's headcount sits in back-office roles.
Global BPO spend hit USD 347.95 billion in 2025, with roughly 60% flowing to back-office work.
Common outsourced back-office roles run USD 6 to USD 20 per hour in the Philippines vs USD 25 to USD 60 onshore.
The Philippines and India remain the two largest destinations, with India dominating finance work and Manila dominating HR and admin. How it worksThe back office runs on process discipline. Each function has a standard operating procedure, a system of record, and an SLA. Work flows through queues, gets scored on turnaround time and error rate, and rolls up to a monthly ops review.
Typical back-office functions and their measurable outputs:
Function
Core task
Standard metric Finance & accounting
Invoicing, reconciliation, month-end close
Days to close, error rate Payroll
Wage runs, tax filings, benefits admin
Payslip accuracy, on-time percentage HR admin
Onboarding, contracts, leave tracking
Time to hire, ticket resolution time IT support
Service desk, system patching, user access
First-call resolution, MTTR Data processing
Entry, cleansing, migration
Records per hour, accuracy rate Compliance
Audit trails, KYC, regulatory filing
Audit findings, filings on timeThe switch to outsourcing changes who runs the work, not the metrics. A Manila-based provider handling AP for a Sydney insurer still reports days-to-close and error rate — the SLA moves with the work.
For roles from data entry to accounting to payroll, the pattern is the same: standardize the process onshore, document it, then hand execution to the offshore team.
ExamplesReal-world back-office setups vary by scale, industry, and geography. The four cases below illustrate the range, from BPO pioneers of 2005 to modern mid-market builds.
Genpact (2005): spun out of GE's own back office, now serves 800+ Fortune 500 firms across finance, procurement, and analytics. TCS running Nielsen (2007–present): global finance close handled from India, with 10+ countries consolidated in one shared-service model. Wells Fargo Manila hub (2011–present): anti-money-laundering, compliance, and mortgage-processing back office running 24/7 from BGC. Australian mid-market firm: stacks a Philippine BPO team on top of a 15-person onshore ops group, cutting total cost per transaction by roughly 55%.Finance-and-accounting is the biggest back-office segment. Mordor Intelligence put global FAO at USD 54.79 billion in 2025, projecting USD 85.92 billion by 2031 at 7.78% CAGR. Everest Group tracked steady 10% year-on-year growth in FAO through 2022 and 2023.
Related termsBack office is one node in a wider outsourcing map. Each related term below covers an adjacent function, tier, or delivery model that touches the same operational spine.
Business process outsourcing: the umbrella model that delivers back-office work at scale. Knowledge process outsourcing: the higher-skill tier covering research, analytics, and legal support. Bookkeeping: a core back-office finance task, often the entry point for FAO deals. Payroll: the recurring back-office cycle that ties finance and HR together. Data entry: the most-outsourced back-office task by seat count. Contact center: the front-office cousin that the back office feeds and is fed by. Service level agreement: the contract that governs back-office quality and turnaround. FAQ What's the difference between front office and back office?Front office touches the customer: sales, marketing, service. Back office supports it: finance, HR, IT, data, admin. Middle office (risk, compliance, ops management) sits between the two. Most companies have all three; the labels shift by industry.
Which back-office functions get outsourced first?Data entry, payroll, and accounts payable are the highest-volume, most-standardized work and usually go first. Companies then move into HR admin, IT service desk, and compliance filing. Strategic finance and executive HR usually stay onshore.
How much does back-office outsourcing save?Roughly 55% to 75% on labor cost for equivalent seats moved from a US or Australian city to Manila or Bangalore. Actual savings after transition, retention, and quality overhead land closer to 40% to 50% in year one.
Do outsourced back-office teams need onshore oversight?Yes, for the first 6 to 12 months. After that, the best engagements run with a small onshore coordinator (roughly 1 seat per 20 offshore) and monthly business reviews. Fully hands-off is rare — and usually a red flag.
What's the biggest back-office outsourcing risk?Loss of process knowledge when the offshore vendor cycles staff. The fix is documented SOPs, not vendor loyalty. Manila teams average 18-month tenure vs 30 months onshore; assume the seat, not the person, is what you're buying.
Ready to move back-office work to a team that can run it end to end? Compare vetted providers on the Outsource Accelerator hubs directory.
What is a Customer Service?
Customer Service: Definition, Examples, and How It WorksCustomer service is the support a business provides to buyers before, during, and after a purchase. It covers questions, complaints, returns, technical help, and account changes across phone, email, chat, social, and self-service channels. Done well, it turns one-off shoppers into repeat customers and quiet defectors into vocal fans.
The term sounds soft, but the work is operational. Teams measure response time, first-contact resolution, customer satisfaction (CSAT), and net promoter score (NPS). They tune scripts, staffing rosters, and AI assistants to hit those numbers without burning out agents.
Modern customer service sits at the intersection of people, process, and software. A 2017 Harvard Business Review piece showed 81% of customers try to solve problems themselves before calling a human, which is why self-service portals and chatbots now front the queue. Live agents handle the harder cases — refunds, escalations, anything emotional.
It also overlaps with customer experience, but the two are not identical. Customer experience covers every touchpoint with a brand; customer service is the slice where someone needs help.
How it worksA customer service operation runs on three layers: channels, people, and tooling. Channels are where customers reach you. People are the agents who answer. Tooling is the contact-center platform that routes tickets, surfaces context, and tracks outcomes.
Most mid-size businesses run a hub-and-spoke model. A central queue receives every inquiry, an automated system classifies it, and the ticket lands with an agent qualified for that issue. Tier 1 handles common questions, Tier 2 takes technical cases, and Tier 3 escalates to engineers or account managers.
The typical staffing and channel mix looks like this:
Channel
Share of contacts
Avg. handle time
Best for Self-service / FAQ
30–40%
seconds
Password resets, order status Live chat
20–25%
4–8 min
Pre-sales, quick fixes Email / ticket
20–25%
24–48 hr SLA
Complex, written records Phone
15–20%
6–10 min
Emotional or urgent issues Social / messaging
5–10%
varies
Public complaints, brand reachPerformance is read in three numbers most operations watch weekly: CSAT (how happy was the customer with this contact), first-contact resolution (did we fix it in one go), and average handle time (how long it took). Push handle time down without watching CSAT and your team starts cutting corners. Push CSAT up without watching handle time and your cost-per-contact balloons.
Outsourcing has reshaped the staffing layer. BPO providers — in the Philippines, India, and Latin America — run customer service for thousands of Western brands at 50–70% lower fully-loaded cost than in-house US teams. The trade-off is governance: you need clean scripts, sharp QA, and direct access to the agents to keep quality on spec.
ExamplesReal customer service operations look very different depending on the industry.
Amazon (retail, global). Amazon's customer service runs a heavily automated front end (returns, refunds, and order tracking are self-serve through the app) backed by 24/7 agents for anything the bots can't close. The company built its reputation partly on no-questions-asked returns, a policy that has stayed roughly intact since 2010.
Zappos (e-commerce, US). The Las Vegas shoe retailer, owned by Amazon since 2009, is famous for letting agents stay on calls as long as needed. One 2012 call lasted 10 hours and 29 minutes and ended with a sale of Ugg boots. The strategy isn't efficiency; it's lifetime value and word-of-mouth marketing.
JetBlue (airline, US). JetBlue runs much of its contact center from home-based agents and treats Twitter as a primary channel. The airline typically responds to public complaints within minutes, which contains reputational damage in real time.
Globe Telecom (telecom, Philippines). Globe uses a hybrid model: branded retail stores, a self-service app, and a large in-house contact center in Manila. It also outsources overflow to local BPO partners during peak billing cycles.
These four show the range: high-volume automation, deep human investment, channel specialisation, and hybrid in-house plus outsourced. There's no single right shape.
Related terms Customer experience: the full sum of brand touchpoints, of which customer service is one slice. Contact center: the facility (physical or virtual) where customer service work happens across phone, chat, email, and social. Call center: the older, voice-only ancestor of the contact center. BPO: the outsourcing model that powers a large share of global customer service capacity. Help desk: a customer service function focused on technical issues, usually for software or IT products. Customer support: a near-synonym, but typically narrower and post-sale in scope. CSAT: the most common metric for measuring a single customer service interaction. FAQ What's the difference between customer service and customer support?Customer service is the broader function: anything from pre-sale questions to billing disputes. Customer support usually refers to the narrower, post-sale work of fixing problems with a product or service. In practice many companies use the terms interchangeably.
How is customer service measured?The three most common metrics are CSAT (satisfaction with a specific contact), NPS (likelihood to recommend the brand), and first-contact resolution (the share of issues fixed in one interaction). Cost-per-contact and average handle time round out the operational view.
Why do companies outsource customer service?Cost is the headline reason, but it's not the only one. Outsourcing also gives access to 24/7 multilingual coverage, faster scaling for seasonal spikes, and providers who already have the contact-center technology installed. The Philippines alone hosts hundreds of providers serving Fortune 500 brands.
Is AI replacing customer service agents?AI is taking the repetitive top of the funnel (password resets, order status, simple FAQs) but not the emotional or complex middle. Research from 2014 onward, including HBR's quantification work on customer experience, shows human contact still drives the highest loyalty lift when the issue matters. Most operations now run AI-first triage with human-second escalation.
What makes customer service "good"?Speed, accuracy, and tone — in that order, for most issues. The 2010 HBR study Stop Trying to Delight Your Customers found that reducing customer effort (making the fix easy) predicts loyalty better than over-the-top "delight" moments. Solve the problem cleanly and most customers stay.
How big is the customer service industry?The global contact-center market alone was estimated at around US$340 billion in 2024, with the outsourced share growing fastest in Asia-Pacific. Customer service spend across in-house and outsourced operations is materially larger when you include in-house teams.
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