BPO is often divided into two categories:

1. Back Office: Which includes internal business functions such as billing or purchasing.

2. Front Office: Which includes customer-related services such as marketing or tech support.

Use of a BPO as opposed to an application service provider (ASP) usually also means that a certain amount of risk is transferred to the company that is running the process elements on behalf of the outsourcer. BPO includes the software, the process management, and the people to operate the service, while a typical ASP model includes only the provision of access to functionality and features provided or 'served up' through the use of software, usually via web browser to the customer.

BPO Companies are categorized as follows:

1. Offshore Companies

2. Onshore Companies

3. Near Shore Companies

Offshore BPO Companies are companies located overseas. Most of the Offshore Companies are located in India, Philippines, China, Pakistan, etc.

Onshore companies based in the same country are called Onshore companies. For example: A company based in US outsources technical support to a US based call center.

Near Shore BPO Companies would mean companies which are based very near to the nation. For example: A Company based in Canada servicing to a US based company. Some examples of Near Shore BPO Companies are call centers based in Dominican Republic, Romania, Costa Rico, Mexico, etc.

Generally, BPO companies are located overseas and represented by call centers, data entry specialists, email answering specialists, telemarketers, copywriters, etc.

Benefits of Outsourcing Companies:

1. Cost Reduction: The most important factor is cost reduction. Outsourcing Companies operate at very low costs, especially the Offshore Companies. An average Call center in US charges $15- $20 per hour for technical support or customer service, whereas, call centers in India charge $8 - $12 an hour for the same job.

2. 24/7 operations: Call centers in offshore nations operate 24 hours a day, 7 days a week and 365 days every year. This proves to be an excellent advantage over onshore call centers.

3. Quality of Service: Offshore BPO Companies are focused on delivering high quality service to their clients. Quality and data security parameters like ISO, BS 7799, 6 Sigma, COPC, lean are studied and implemented to maintain high quality standards.

BPO Companies are one of the fastest growing companies today. In India giants like IBM, Convergys, Aegis, Wipro, GE, American Express, 24/7 have around 10000 employees offering support to developed countries worldwide.

Considering the growth of BPO Companies, it would be a wise decision to venture into the industry. Experts predict that the Outsourcing Companies will rise in near future, opening more avenues for all. Almost every day a new BPO Company is established in India alone. This is not just the present, it is the future.