BPO Meaning : BPO means Business Process Outsourcing. It’s the process of hiring a company which is capable of doing tasks on your behalf at much lesser cost and better expertise so that you can focus on your main job.
Based on who does the outsourced work, BPOs are categorized as Captive and Non Captive (or Third party BPO).
When a subsidiary of parent company runs operations of the outsourced work then the BPO is known as captive. For example: Dell decided to open its own call centers in India so that it can handle or make calls for Dell products. In this case Dell International services is a captive BPO.
When the outsourced work is being handled by a third party which is being paid for its services then that third party company is a non captive unit. For example: Wipro handles projects of various ISPs,banks, computer manufacturers etc.
Cost of outsourcing to a captive BPO is higher than the non captive BPO. Third party BPOs win contracts through competitive bidding process and have to cut down on non essential costs in order to be priced competitively. Captive BPOs don’t have that pressure and can get relaxed on the cost part.
Outsourcing to captive unit located offshore is better than no outsourcing because costs of running support functions are higher in countires like US and UK compared to offshore locations like India and Philippines.
Non Captive BPOs can implement best practices and lessons learnt from other projects being handled by the organization. On the other hand Captive BPOs do not have projects of other companies so they have to rely on the experience gained through self learning.
Captive BPOs have better control over their employees and any process changes are easier to implement compared to a non captive unit. In addition they have more flexibility to increase or reduce the headcount depending on the future requirements.
Are you looking for a BPO job? Have you not been able to decide which type of BPO to join?
Here is my opinion-There is no hard and fast rule on which type of BPO is better for you. It depends entirely on the kind of job opportunity you get.
However in my personal opinion third party BPO jobs have a slight edge over captive units because they cater to a wide variety of projects and are not limited to providing support for one company. You’ll find phone, email, chat support, back office, KPO, finance and insurance, technical and many other types of projects in a big 3rd party BPO. This gives you more exposure and more opportunities to grow.