What is referred to as business process outsourcing (BPO)?

Business process outsourcing (BPO) is best defined as the practice of contracting various business functions to third-party service providers. This can encompass a range of services including customer support, human resources, accounting, and other administrative tasks, in addition to manufacturing processes. The key element of BPO is that it focuses on outsourcing specific business processes rather than the entire business.

The correct response highlights that BPO involves outsourcing both services and manufacturing processes, which allows companies to leverage external expertise and reduce costs while focusing on their core activities. This approach can increase efficiency, enhance service quality, and provide access to global talent.

In contrast, the other options present limitations that do not capture the full scope of BPO. For example, simply outsourcing manufacturing processes overlooks the significant sector of services that are also commonly outsourced. Utilizing only in-house resources is contrary to the concept of outsourcing, which by nature involves external providers. Lastly, transferring all processes to a foreign country suggests a complete relocation, which is not always the case with BPO, as companies may choose to outsource selectively and to various locations, including domestic ones.