Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the

operations and responsibilities of specific business functions (or processes) to a third-party service
provider. BPO is typically categorized into back office outsourcing - which includes internal business
functions such as human resources or finance and accounting, and front office outsourcing - which
includes customer-related services such as contact center services.BPO that is contracted outside a
company's country is called offshore outsourcing and contracted to a company's neighboring (or nearby)
country is called nearshore outsourcing.
It is one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry.
India became familiar with 'Business Process Outsourcing' only in the early and mid 1990's, but now the
industry is looking at various strategies and technologies to survive and thrive amid growing pressure of
the recession. The industry is divided on the effect of recession. The present study has been undertaken
in the context of two main objectives: firstly, to analyze the impact of economic slowdown on the
performance of BPO sector in India, and secondly, to anticipate the future prospects / potential of
Indian BPO Industry. From the study it is revealed that besides the global meltdown India has been the
most attracting outsourcing market as it demonstrated superiority, sustained cost advantage and
fundamentally powered value proposition. Often the business processes are information technologybased, and are referred to as ITES-BPO, where ITES stands for Information Technology Enabled
Service.[2] Knowledge process outsourcing (KPO) and legal process outsourcing (LPO) are some of the
sub-segments of business process outsourcing industry.

Benefits and limitations

The main advantage of BPO is the way in which it helps increase a companys flexibility. However,
several sources have different ways in which they perceive organizational flexibility. In early 2000s BPO
was all about cost efficiency, which allowed a certain level of flexibility at the time. Due to technological
advances and changes in the industry, companies who choose to outsource their back-office increasingly
look for time flexibility and direct quality control. BPO enhances the flexibility of an organization in
different ways:
Most services provided by BPO vendors are offered on a fee-for-service basis, using business models
such as Remote In-Sourcing or similar software development and outsourcing models. This can help a
company to become more flexible by transforming fixed into variable costs. Outsourcing may provide a
firm with increased flexibility in its resource management and may reduce response times to major
environmental changes
Flexibility is seen as a stage in the organizational life cycle: A company can maintain growth goals while
avoiding standard business bottlenecks.BPO therefore allows firms to retain their entrepreneurial speed
and agility, which they would otherwise sacrifice in order to become efficient as they expanded. It
avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic
mode of operation.

Although the above-mentioned arguments favor the view that BPO increases the flexibility of
organizations, management needs to be careful with the implementation of it as there are issues, which
work against these advantages. Problems which arise in practice are : A failure to meet service levels,
unclear contractual issues, changing requirements and unforeseen charges, and a dependence on the
BPO which reduces flexibility. Consequently, these challenges need to be considered before a company
decides to engage in business process outsourcing.

A global recession is a period of global economic slowdown. The International Monetary Fund (IMF)
takes many factors into account when defining a global recession, but it states that global economic
growth of 3 percent or less is "equivalent to a global recession".
A global recession is a period of declining economic output. Defining a global recession is more difficult,
because developing nations are expected to have a higher GDP growth than developed nations.
According to IMF, the real GDP growth of the emerging and developing countries is on an uptrend and
that of advanced economies is on a downtrend. Downward revisions in GDP growth vary across regions.
Among the most affected are commodity exporters, and countries with acute external financing and
liquidity problems. Countries in East Asia (including China) have suffered smaller declines because their
financial situations are more robust. They have benefited from falling commodity prices and they have
initiated a shift toward macroeconomic policy easing