BPO is one of those terms that gets used constantly in business strategy discussions but is rarely explained clearly. Simple subcontracting? Offshore cost-cutting? Or a genuine transformation lever? Here is a complete, practical definition — and what it actually means for your organisation.
BPO (Business Process Outsourcing) refers to the practice of contracting a specialised external provider to manage specific business processes on your behalf. These can include customer service, administrative functions, HR, accounting, or other support operations.
BPO goes well beyond simple subcontracting. The BPO provider takes on responsibility not just for executing tasks, but for managing the teams, tools, processes, and often the associated performance metrics. It is a deeper, more durable form of delegation — typically governed by multi-year contracts with defined service levels.
A BPO engagement is built on a multi-year contract between the client company and the provider, which defines:
The provider deploys its own teams, technology, and sector expertise to deliver the service. The client retains strategic responsibility and overall direction, while the provider handles operational execution.
Front-office BPO (customer experience) covers all direct customer interactions: contact centres, multichannel support, complaints management, retention, upselling. This is the most established and fastest-growing BPO segment in Europe.
Back-office BPO covers less visible but equally critical processes: document processing, file management, billing, compliance verification, order fulfilment.
Support function BPO covers payroll, HR, finance and accounting, and procurement. These are often handled by IT services companies or specialist firms.
Traditional outsourcing typically refers to contracting a specific task to an external party on a transactional basis — for example, engaging a recruitment firm for a one-off hiring project. BPO implies a deeper, longer-term delegation of an entire process, with transfer of responsibility, capability, and often personnel. In short, BPO is a form of outsourcing, but with a far higher level of integration, duration, and accountability.
Industry studies consistently show operational cost savings of 15% to 35% on outsourced functions. These gains come from the provider’s economies of scale, resource pooling across clients, and continuous process optimisation expertise.
A specialist BPO provider invests continuously in the tools, methodologies, and talent specific to its domain. Outsourcing gives you access to that investment without having to fund it entirely in-house.
BPO enables you to scale resources to actual demand — ramping up quickly during high-activity periods and reducing capacity during quieter periods, without the HR constraints of in-house headcount management.
Delegating operational processes frees management and internal teams to focus on high-value activities: innovation, commercial development, and strategic decision-making.
A specialist provider, subject to contractual SLAs and measured on outcomes, has a structural incentive to continuously optimise its service quality — an incentive that in-house teams do not always operate under.
BPO carries real risks that a well-structured contract can control:
The global BPO market is estimated at $328 billion in 2025. In Europe, the customer experience segment is particularly dynamic, driven by three structural trends: hyper-automation (RPA + generative AI), a shift toward outcome-based contract models, and a move toward higher-value, sector-specific service offerings.
European reference players in customer experience BPO include sector specialists such as Armatis — with over 30 years of experience across banking, retail, energy, and travel — alongside international groups such as Teleperformance and Concentrix (Webhelp). The right choice depends on your company size, interaction complexity, and the level of proximity and sector expertise you require.
The image of the offshore, script-driven call centre belongs to the past. Next-generation BPO is a transformation partnership: the provider contributes to customer experience strategy, proposes technology innovations, shares performance data, and co-builds solutions with its clients.
In 2026, the leading BPO engagements combine expert human advisors, conversational AI for repetitive tasks, and advanced analytics to drive continuous improvement. This hybridisation is what defines market leaders.
A call centre is a type of BPO focused specifically on telephone interactions. BPO is broader: it covers emails, chat, back-office, administrative processes, and many other functions. Today, the industry speaks of “omnichannel contact centres” rather than call centres.
Yes, provided you choose a provider sized appropriately for your needs. Many operators offer models tailored to the volumes and budgets of mid-market companies, with flexible commitments and accessible entry points.
Costs depend on interaction volume, processing complexity, delivery location, and service level. A competitive RFP process with multiple providers is the most reliable way to benchmark costs accurately.
Yes, provided reversibility has been contractually planned. Exit conditions — notice periods, knowledge transfer, tool and data ownership — must be negotiated at the outset, not at the point of exit.
An SLA (Service Level Agreement) is a contractual commitment to a minimum performance level. For example: 90% of calls answered within 30 seconds, a minimum CSAT of 85%, a first contact resolution rate above 75%. Failure to meet SLAs typically triggers financial penalties.
Armatis is a leading European BPO provider in customer experience, supporting large enterprises and mid-market companies in managing and transforming their customer service for over 30 years. Key sectors: banking & insurance, retail & e-commerce, energy, travel & mobility.
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