BPO & outsourcing glossary

A blended rate in BPO is one composite hourly price covering agents of different seniority, location, or skill. Here is what buyers need to know.

Build-Operate-Transfer (BOT) is a model where a vendor sets up and runs an offshore or nearshore team, then transfers full ownership to the buyer.

A Business Continuity Plan (BCP) in outsourcing is a vendor's documented framework for maintaining uninterrupted service delivery during disruptions.

Business Process Outsourcing (BPO) means contracting a third-party vendor to run a defined business process on your behalf.

A captive center is a company-owned offshore or nearshore delivery facility, fully controlled by the parent organization, not a third-party vendor.

A contact center handles customer interactions across phone, email, chat, and social channels from one operation.

CSAT measures customer satisfaction after an interaction, but in BPO contracts it's an SLA metric vendors can quietly game.

A dedicated team is a group of agents assigned exclusively to one client, rather than shared across multiple accounts.

Disaster Recovery in BPO is a contractual and operational framework defining how a vendor maintains process continuity during severe disruptions.

First Call Resolution (FCR) measures the share of issues a BPO agent closes on the first contact, without callbacks or transfers.

Follow-the-sun is a multi-timezone BPO delivery model where work or support coverage passes between geographically distributed teams so operations run 24 hours a day without requiring any single team to work overnight shifts.

FTE means one full-time agent's contracted hours, but in BPO billing it rarely equals full productive output. Here's why that gap matters.

Gain sharing is a BPO pricing model where vendors earn a share of verified cost savings they generate for the client. Here's how it works.

GDPR governs how EU personal data is handled by BPO vendors. Understand your liability as a Data Controller before you sign any outsourcing contract.

HIPAA governs how BPOs handle protected health information. Learn what Business Associate status, BAAs, and offshore ePHI rules mean for outsourcing buyers.

ISO 27001 certifies an information security management system. Here's what BPO buyers must verify beyond the marketing badge.

KPO is outsourcing that involves skilled, judgment-based work, research, analysis, legal, or financial tasks, not just repeatable process execution.

Knowledge Transfer (KT) is the structured phase-gated process that moves operational know-how from a client to an outsourcing vendor before go-live.

Legal Process Outsourcing (LPO) is the practice of sending legal work to an external provider, offshore or nearshore, to reduce cost or access specialist capacity.

Managed Services: a model where a vendor takes ongoing ownership of a defined process or function, not just labor.

A Master Services Agreement (MSA) is the umbrella contract governing every outsourcing engagement. Learn what it covers and why it matters.

Nearshoring means outsourcing business processes to a provider in a nearby country, typically sharing your timezone or close to it.

Net Promoter Score (NPS) measures likelihood to recommend on a 0-10 scale; in BPO, client and end-user NPS must be tracked separately.

Offshoring means relocating business processes or functions to a team or vendor in another country, typically to reduce costs or access specialized talent.

Onshoring means hiring a service provider or relocating work within your own country, avoiding offshore or nearshore delivery.

Outcome-based pricing ties BPO vendor pay to measurable results, not hours worked. Learn how it's structured, when it works, and when it doesn't.

PCI DSS governs how cardholder data is handled. Here's what it means when a BPO touches your payment flows and who owns the risk.

Ramp-up in BPO is the structured transition period covering both account-level volume scaling and agent-level speed-to-competency before full SLA applies.

Recruitment Process Outsourcing (RPO) is when a company transfers part or all of its internal recruiting function to an external provider.

A BPO RFP is the structured document buyers use to compare vendors on operational terms, not just price. Here is what to include.

Seat cost is the price per agent workstation per month, but it can mean facility, FTE, or software billing. Here's how to tell.

A Service Level Agreement (SLA) sets a BPO provider's measurable performance targets, how they're tracked, and the remedy for a miss.

A Shared Services Center (SSC) consolidates common business functions into one internal unit serving multiple parts of an organization.

SOC 2 is a third-party attestation confirming a BPO vendor's data controls meet AICPA Trust Services Criteria. Here's what the report really tells you.

Staff augmentation is a model where you hire external talent to work within your team and processes, rather than handing work to a vendor to manage.

A Statement of Work (SOW) is the operational contract layer that turns BPO sales estimates into binding headcount, SLA, and penalty commitments.

Time zone overlap is the number of working hours a BPO team shares with your in-house team for live collaboration.

BPO transition is the structured handover of processes from a client or incumbent vendor to a new provider before steady-state delivery begins.