Business Process Outsourcing (BPO) is the contracting of a specific business task, such as payroll, to a third-party service provider. Usually, BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain their position in the marketplace. BPO is often divided into two categories: back office outsourcing which includes internal business functions such as billing or purchasing, and front office outsourcing which includes customer-related services such as marketing or technical support.

BPO that is contracted outside a company's own country is sometimes called offshore outsourcing. BPO that is contracted to a company's neighboring country is sometimes called nearshore outsourcing, and BPO that is contracted with the company's own country is sometimes called onshore outsourcing [1].

The most common examples of BPO are call centers, human resources, accounting and payroll outsourcing.

Use of a BPO as opposed to an application service provider (ASP) usually also means that a certain amount of risk is transferred to the company that is running the process elements on behalf of the outsourcer. BPO includes the software, the process management, and the people to operate the service, while a typical ASP model includes only the provision of access to functionalities and features provided or 'served up' through the use of software, usually via web browser to the customer. BPO is a part of the outsourcing Industry. It is dependent on Information Technology, hence it is also referred to as Information Technology Enabled Services or ITES.

Knowledge Process Outsourcing, or Legal Process Outsourcing are some of the sub sets of Business Process Outsourcing. Nowadays BPO and ASP are used by many offices and even governments. 

Therefore the reliance on the BPO or ASP supplier has become more important. If the supplier fails and the data is no longer accessible, the customer will have a big problem, especially if offshore outsourcing was contracted.

First German Escrow can reduce the risk with an escrow agreement to a minimum.