Last edited 24 Jul 2017

Business process outsourcing (BPO)

Business process outsourcing (BPO) involves the contracting of non-primary business activities and functions to a third-party service provider. Typical BPO services include internal business functions such as the handling of payroll, human resources, and accounting; and customer-related services such as customer interfacing.

BPO can be referred to by different terms related to the specific nature of the outsourcing. Common terms include: information technology enabled services (ITES) for IT-based processes, knowledge process outsourcing (KPO), legal process outsourcing (LPO), engineering process outsourcing (EPO).

In the construction industry, companies can use BPO for various activities, including:

IT services.
CAD and BIM.
Human resources and administration.
Finance and accounting.
Security.
Facilities management.
Project management.
Structural design.
Document management.
Marketing and communications.
Concept design.
Detail engineering.
Energy modelling and audits.
Landscape design.

The primary advantage of BPO is the added flexibility that it offers a company. Since most BPO providers offer services on fee-for-service bases, a company can transform fixed into variable costs. By doing so, a company can be more flexible in responding to changes due to required capacity and workload, and therefore don’t need to invest in particular assets. By being relieved of certain activities, a company is able to focus on its core competencies, forward planning, and enhance value chain engagement.

However, there are some risks attached to BPO which can include an over-dependence on service providers, underestimated running costs, and the danger of data privacy breaches.