What is What is business process outsourcing??
What is business process outsourcing (BPO)?Business process outsourcing (BPO) is the practice of contracting a third-party provider to run a defined business function such as customer support, payroll, accounting, or IT helpdesk. The provider takes ownership of the people, process, and technology, and bills you on a per-seat, per-transaction, or fixed-fee basis.
BPO sits at the intersection of labour arbitrage and operational focus. You hand off a non-core function to a specialist that can run it cheaper, faster, or better, and your in-house team gets to concentrate on what actually moves the business.
The category covers everything from a 4-seat phone team in Cebu answering after-hours calls for a US plumbing firm, to a 5,000-seat captive in Manila handling global claims processing for a Fortune 500 insurer. Same idea, very different scale.
If you've used Apple support, ordered from Amazon, or paid with Wells Fargo, you've talked to a BPO provider — you just didn't know it.
How it worksA BPO engagement runs in three layers: contract, transition, and steady state. You scope the function, sign a service level agreement that locks in response times, quality thresholds, and pricing, then transition the work through documented playbooks and parallel runs before the provider takes the keys.
Pricing usually falls into one of four shapes:
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 Hybrid
Base FTE rate plus variable bonus
Long-term partnershipsLocation choice drives most of the savings. Sending work to the Philippines or India (offshoring) typically cuts loaded labour cost by 50–70% versus a US in-house team. Sending it to Mexico or Colombia (nearshoring) trims 30–50% while keeping you in roughly the same timezone. Keeping it domestic (onshoring) protects timezone and language fit but barely moves the cost needle.
The provider absorbs the recruiting, training, real estate, tech stack, and compliance burden. You absorb the vendor-management overhead and the risk that comes with handing a function to an outsider.
ExamplesThe global BPO market hit roughly USD 347.95 billion in 2025 and is projected to grow at a 10.05% CAGR through 2035, according to Precedence Research. That growth is concentrated in a handful of hubs and a handful of named buyers.
Google has used Philippine and Indian BPO partners since 2016 for content moderation, ads review, and customer support — a quiet workforce that scales with each product launch. Meta contracts Accenture and TaskUs in Manila for content moderation; the work pulled enough scrutiny in the early 2020s that Meta eventually broadened its provider base across multiple regions. Wells Fargo has operated a Manila back-office hub since 2011, handling mortgage processing, AML checks, and treasury operations for the US parent. JPMorgan Chase runs large captive and outsourced operations in India and the Philippines for KYC, trade settlement, and analytics.The Philippines remains the standout English-language hub. According to the IT and Business Process Association of the Philippines, the country's IT-BPM sector generates roughly USD 40 billion in revenue and employs about 1.9 million people, with growth targets pushing past 2.5 million by 2028.
Related terms Outsourcing: the umbrella term; BPO is the back-office and front-office slice that runs whole processes rather than one-off projects. Offshoring: moving work to a distant country (e.g. US to Philippines). A location choice, not a contracting choice. Nearshoring: moving work to a nearby country (e.g. US to Mexico) to keep timezone and culture closer. Knowledge process outsourcing: KPO handles judgment-heavy work like legal research or equity analysis, not transactional tasks. Call center: one delivery format inside BPO, focused on inbound or outbound voice. Back office: the non-customer-facing operations layer that BPO most commonly absorbs. Service level agreement: the contract clause that defines what "good" looks like in a BPO deal. FAQ What is business process outsourcing in simple terms?BPO is paying another company to run a piece of your business for you, usually a repeatable function like answering support calls, processing invoices, or managing payroll. You keep the brand and the strategy; they run the operation.
What is the difference between BPO and outsourcing?Outsourcing is the broad category — anything you contract out, including one-off projects. BPO is the subset where a provider runs an ongoing, defined business process end-to-end, typically with its own staff, systems, and SLAs.
Is BPO only about cost savings?No. Cost is the entry argument, but mature buyers cite access to specialist talent, 24/7 coverage, faster scaling, and freeing in-house leaders to focus on growth as bigger long-term wins. See the directory of vetted providers on Clutch for how the market positions itself today.
What functions do companies outsource most often?Customer support, IT helpdesk, finance and accounting, payroll, HR administration, content moderation, and data entry top the list. Higher-judgment work like legal research, equity analysis, and medical coding has shifted to KPO providers over the last decade.
Which countries dominate the BPO industry?The Philippines leads voice and customer experience, India leads IT and analytics, and Latin America (Mexico, Colombia, Costa Rica) leads nearshore work for North American buyers. Eastern Europe serves Western European clients on similar terms.
How do I choose a BPO provider?Match scale to your volume, check for relevant compliance (ISO 27001, HIPAA, PCI DSS, SOC 2), ask for two reference clients in your industry, and pilot a small scope before committing to a multi-year contract. Walk away from any provider that won't share agent attrition data.
Ready to scope a BPO partner? Outsource Accelerator lists 4,000+ vetted providers across the top global hubs — use the directory to shortlist, compare pricing, and book intro calls without paying a referral fee.
What is Shared Services?
Shared ServicesShared services is an internal operating model where one in-house team delivers repeatable functions — finance, HR, IT, procurement — to multiple business units from a single center. The goal is standardized work at lower unit cost, with the parent company keeping full control rather than handing the work to a third party.
Key takeaways Shared services centralizes back-office work inside the company; outsourcing hands it to an outside vendor.
The model typically cuts process costs by 25–40% once consolidation and standardization are complete, per Deloitte's 2023 Global Shared Services and Outsourcing Survey.
Most large enterprises now run hybrid setups: captive shared services centers in low-cost hubs like Manila, Krakow, or Bengaluru, with selective outsourcing layered on top.The term took hold in the early 1990s when General Electric and Ford pulled scattered finance teams into single sites to standardize ledgers and cut headcount. Three decades on, the playbook still works — but the scope has widened from finance to almost any rules-based function a corporation runs.
Outsource Accelerator has tracked this shift since 2017, and one pattern keeps repeating: companies that treat shared services as a pure cost play stall around year two, while those that treat it as a process-redesign program keep compounding savings.
How it worksA shared services center (SSC) consolidates similar tasks from across a business into one team that serves every unit under a service-level agreement. Work is standardized, automated where possible, and priced back to each business unit on a per-transaction or subscription basis.
The build typically moves through four stages:
Stage
Focus
Typical duration 1. Consolidation
Pull scattered teams into one site, freeze processes
6–12 months 2. Standardization
Adopt single workflows, single tools, single chart of accounts
12–18 months 3. Optimization
Lean, automation, RPA, analytics layered on top
18–36 months 4. Value-add
Center moves from transaction processing to advisory work
36 months+Governance sits with a steering committee from the parent business; the SSC itself runs on KPIs like cost per invoice, days-to-close, first-contact resolution, and customer satisfaction. Per the U.S. Bureau of Labor Statistics, business and financial operations roles (the bulk of SSC headcount) are projected to grow 7% through 2033, faster than the all-occupations average.
Location strategy matters as much as design. Captive centers in the Philippines, India, Poland, and Costa Rica typically deliver labor arbitrage of 50–70% against US or UK in-house rates, while keeping the team on the parent company's payroll and inside its security perimeter.
ExamplesReal shared services programs look very different from the textbook diagrams.
Procter & Gamble Global Business Services (GBS): Runs finance, HR, IT, and facilities for the entire group from hubs in Manila, San José (Costa Rica), and Newcastle. The center serves roughly 100,000 P&G employees and has been repeatedly cited by Gartner as a benchmark GBS program. Shell Business Operations: Five sites (Manila, Krakow, Chennai, Bengaluru, and Kuala Lumpur) covering finance, HR, contracting, and customer operations for Shell's downstream and upstream units. The Manila site alone employs more than 5,000 people as of 2024. Unilever Enterprise & Technology Solutions: Consolidated 26 separate finance back offices into four global hubs between 2018 and 2023, reporting a reduction in days-to-close from 8 to 3 across the group. Philippine government BPO partnership: The IT and Business Process Association of the Philippines reported the IT-BPM sector hit USD 38 billion in revenue and 1.82 million direct jobs in 2024, with captive shared services centers accounting for a growing share of new hires. Related termsShared services sits inside a wider family of operating models. Read these next:
Business process outsourcing: third-party vendor delivery, the closest cousin to shared services. Captive center: wholly owned offshore site; most modern shared services hubs are captives. Global business services: the evolved form of shared services that covers multiple functions worldwide. Back office: the function set that shared services typically absorbs first. Knowledge process outsourcing: higher-judgment work that often follows once the SSC matures. Offshoring: the location-cost lever that makes most captive shared services models pencil out. FAQ How is shared services different from outsourcing?Shared services keeps the team inside the parent company, on the parent's payroll and inside its security perimeter. Outsourcing hands the same work to an external vendor under a contract. Many large groups run both at once.
What functions are usually first into a shared services center?Finance and accounting almost always go first: accounts payable, accounts receivable, general ledger, and payroll. HR transactional work and IT helpdesk are the typical second wave.
How much does a shared services model actually save?Mature centers report 25–40% lower process costs once standardization and automation are in place. Labor arbitrage from offshore locations adds another 50–70% on the affected roles.
Where are most shared services centers based?The Philippines, India, Poland, Malaysia, Costa Rica, and Romania dominate the list. Manila is the largest single hub for English-language finance and customer operations work.
Is shared services still relevant with automation and AI?Yes — automation moves the work, not the model. Robotic process automation and AI agents now sit inside the SSC rather than replace it, freeing people to handle exceptions and analytics.
Looking to benchmark or build a center? Browse vetted partners on the Outsource Accelerator directory.
What is Finance & Accounting?
Finance and Accounting: What It Is and Why It's OutsourcedFinance and accounting is the paired business function that records every transaction, reports the numbers under a recognised standard, and turns them into decisions about cash, tax, and capital. Accounting looks backwards at what happened. Finance looks forward at what to do about it. Both run on the same ledger.
Most companies treat the two as one team. A controller and a finance lead share the close, the forecast, and the audit. Owners and boards read the same outputs: a profit-and-loss statement, a balance sheet, and a cash-flow report.
The reporting language is set by a regulator. US-listed firms file under US GAAP, maintained by the FASB. Almost every other major market files under IFRS, maintained by the IASB in London. A subsidiary that reports into both will often run two ledgers in parallel.
Outsourcing the function is mainstream now. Mordor Intelligence sized the global finance-and-accounting outsourcing market at USD 54.79 billion in 2025, rising to USD 85.92 billion by 2031 at a 7.78% CAGR. India and the Philippines absorb most of the delivery work.
How it worksA finance and accounting team runs on a calendar. The month-end close drives most of it; the rest hangs off the close as inputs or outputs.
Step
What happens
Typical owner 1. Record
Invoices, receipts, payroll, and bank lines hit the ledger
Bookkeeper or AP/AR clerk 2. Reconcile
Bank, card, and intercompany balances are matched
Senior bookkeeper 3. Close
Accruals, prepayments, and depreciation are posted
Accountant 4. Report
P&L, balance sheet, and cash flow are issued
Controller 5. Analyse
Variance, forecast, and KPI commentary go to leadership
FP&A lead 6. Comply
Tax, statutory, and audit filings are lodged
Tax accountant or CFOCloud platforms like Xero, QuickBooks Online, NetSuite, and Sage Intacct sit underneath the whole flow. They let an offshore team in Manila edit the same ledger a CFO in Sydney is reading.
Two delivery shapes dominate. A captive shared-service centre is owned by the parent company, usually in a low-cost city. An outsourced provider is a third-party BPO, billed per hour, per FTE, or per transaction. Many groups run both: captive for the close, BPO for high-volume work like accounts payable.
Everest Group reported FAO spend grew up to 10% year-on-year in 2022, with banking, manufacturing, and retail the biggest buyers. The growth has held since, driven by automation tooling and a tight onshore labour market.
ExamplesA few visible cases show the shape of the work:
Genpact spun out of GE in 2005 and now runs finance and accounting back-offices for hundreds of Fortune 500 clients from India, the Philippines, and Romania.
Accenture's Operations business runs record-to-report, order-to-cash, and procure-to-pay processes for clients including Unilever, Marriott, and BP, with delivery centres across Manila, Bengaluru, and Buenos Aires.
Tata Consultancy Services has run Nielsen's global finance back-office since 2007, a multi-year deal frequently cited as one of the largest single FAO engagements.
A small Australian dental group might instead hire two Philippines-based bookkeepers via an Outsource Accelerator partner, at about USD 8 per hour fully loaded, to keep Xero clean and chase debtors.The pattern is the same at every scale. Routine work moves offshore. The CFO, the auditor sign-off, and the board pack stay onshore.
Related terms Bookkeeping: the daily transaction-recording layer that feeds the accountant. Payroll: a specialised sub-function that calculates pay, tax, and statutory deductions. Business process outsourcing: the parent category that finance and accounting outsourcing sits inside. Knowledge process outsourcing: higher-judgement work, including financial analysis and equity research. Back office: the wider set of non-customer-facing functions, of which finance is the largest line. Offshore accounting: finance and accounting work delivered from a lower-cost country. Financial services company: firms that sell finance products, distinct from the internal finance function described here. FAQ What's the difference between finance and accounting?Accounting records and reports what already happened: invoices booked, tax filed, ledger closed. Finance decides what to do next with the money — budgets, forecasts, funding, and investment. They share data but answer different questions.
Is finance and accounting outsourcing safe for confidential data?Yes, when the provider holds SOC 2 Type II or ISO 27001 certification, signs a data-processing agreement, and works inside the client's own cloud accounting system. The client keeps the master data; the provider gets named-user access.
How much does outsourcing finance and accounting cost?Pricing in the Philippines and India typically runs USD 6 to USD 15 per hour for bookkeepers and junior accountants, and USD 15 to USD 35 per hour for qualified CPAs or FP&A analysts. That's roughly 60% to 75% below comparable US, UK, or Australian rates.
Which finance tasks shouldn't be outsourced?Final sign-off, board reporting, audit committee work, and any task that requires statutory licensure in the client's home country. Most groups also keep treasury and bank-payment authorisation onshore, even when the rest of the ledger is offshore.
Does outsourcing replace the in-house finance team?Usually not. The common pattern is one onshore CFO or controller leading a hybrid team — a small onshore core for strategy, audit liaison, and stakeholder work, and a larger offshore team handling close, AP, AR, and reporting.
Ready to scope a finance and accounting team? Outsource Accelerator can shortlist vetted Philippine and Indian providers against your function map and budget — start with a free consultation.
What is Standard Operating Procedure (SOP)?
Standard Operating Procedure (SOP)A standard operating procedure (SOP) is a written, step-by-step guide for a specific task or workflow. It tells anyone doing the job exactly how to complete it, in the right order, to the same standard, every time. Good SOPs turn one person's expertise into the whole team's baseline.
You'll find SOPs behind almost every well-run outsourcing arrangement. They're the reason a new agent in Manila can handle a ticket the same way a five-year veteran does, and why quality doesn't slip when your account manager goes on leave.
The best SOPs read like a recipe you can hand to someone who's never done the task before. If they can't finish the job with just the document open, the SOP isn't done yet.
Done well, SOPs shrink onboarding time, tighten compliance, and make audits painless. Done badly, they gather dust in a shared drive nobody opens.
Key takeaways SOPs document how a task is done, not just what needs doing.
The best SOPs are short, visual, and updated when the process changes.
They cut onboarding time and reduce errors during handovers.
Compliance-heavy sectors like finance and healthcare require SOPs by law. How it worksAn SOP works by breaking a process into ordered, named steps that anyone with the right role can follow. Each step names four things — actor, action, tool, and acceptable output. The document lives under version control and gets reviewed on a fixed cadence.
Most teams write SOPs in one of three shapes, matched to the complexity of the work.
SOP format
Best for
Typical length Step-by-step checklist
Routine, low-risk tasks
5–15 steps Hierarchical outline
Multi-role processes with sub-tasks
2–5 pages Flowchart
Decision-heavy work with branches
1 page visualAccording to Process.st's SOP format guide, flowchart formats work best when a process forks on customer type, order value, or risk score. Step-by-step checklists cover the bulk of contact-centre and back-office work.
For call-centre work, checklists dominate. For finance-and-accounting outsourcing, hierarchical outlines carry the risk-tiered approvals. Flowcharts fit fraud-review queues where analyst decisions branch.
Every SOP needs four fixed fields: owner, review date, trigger, and success criteria.
The success criteria tie back to the key performance indicator (KPI) the process moves, whether that's first-contact resolution, average handle time, or error rate per 1,000 transactions. KPI.org covers how to set those measures cleanly.
Version control matters more than most teams admit. If an agent is following version 3 while quality assurance audits against version 5, you'll see failed reviews that aren't the agent's fault.
Store SOPs in a single system, timestamp every change, and force a re-read after each update. Regulated sectors, from finance to healthcare, treat SOPs as evidence during audits.
ExamplesSOPs show up wherever consistency pays off — call scripts, refund workflows, security patching, medical intake. In outsourcing, they're the currency that lets a client's internal team hand a process to a Manila or Cebu team and know it'll come back the same.
Contact-centre refund SOP. A large e-commerce brand outsourcing to a Philippine business process outsourcing (BPO) provider typically hands over a refund SOP that pins the maximum discretionary amount, the escalation trigger, and the exact CRM macros to use.
In 2024, most tier-1 BPOs reviewed these refund SOPs quarterly to stay ahead of chargeback rules.
Hospital medication SOP. Under United States Joint Commission standards updated in 2023, hospitals maintain SOPs for high-alert medication administration that require two-nurse verification and time-stamped documentation. A single skipped step can trigger regulatory action.
Software incident response. A customer support team handling SaaS tickets follows an incident SOP that starts the moment an alert fires: acknowledge in Slack, page the on-call engineer, and post to the status page inside 15 minutes.
The service level agreement (SLA) tracker updates automatically once the incident closes.
Manufacturing safety walkthrough. According to a 2023 Small Business Chronicle piece, factories that codify pre-shift safety walkthroughs into SOPs see fewer OSHA-recordable incidents than those relying on tribal knowledge alone. Line managers walk the checklist with each incoming shift lead.
Related termsSOPs sit alongside other operating documents that describe how work gets done in an outsourcing context. Understanding where each one starts and stops helps you write cleaner SOPs and avoid overlap with agreements, playbooks, and process maps that already cover the same ground.
Business process outsourcing (BPO): the delivery model SOPs govern day-to-day. Service level agreement (SLA): the contractual promise SOPs deliver against. Customer support: the function most reliant on SOPs to keep tone and speed consistent. Key performance indicator (KPI): the metric each SOP is meant to move. Quality assurance: the audit function that scores SOP adherence. Knowledge process outsourcing (KPO): higher-skill work where SOPs govern judgement checkpoints, not full workflows. FAQ What's the difference between an SOP and a work instruction?An SOP describes the whole process end-to-end, including who owns each step. A work instruction zooms in on one task inside that process, typically at the click-by-click level. Most teams keep both, linked from the same page.
How often should you review an SOP?Review quarterly for high-change work like fraud rules or product returns, and annually for stable back-office tasks. Trigger an out-of-cycle review whenever a tool, regulation, or process owner changes.
Who should write the SOP?The person doing the job today, edited by whoever will audit it tomorrow. SOPs written by managers alone tend to miss the shortcuts operators actually use, and those shortcuts are usually the reason quality varies.
Do SOPs need to be documents, or can they be videos?Both work. Regulated industries usually require a written master document for audit, but video walkthroughs sit well alongside it for training. Whatever format you pick, version it and give it an owner.
What breaks an SOP fastest?Silent tool changes. A CRM field rename, a new payment gateway, or an approval workflow tweak can invalidate half your SOPs overnight if nobody flags it back to the SOP owner.
See how outsourcing firms structure their SOPs before you hire — start at the Outsource Accelerator hubs directory.
Independent
