• My Tools
Business Services, Thought Leaders

Business Process Outsourcing (BPO) Glossary: 86 Essential Terms

April 10, 2023

by Sydney Wess

Business process outsourcing (BPO) is a contract between organizations and an external provider for the management of certain business functions. Businesses need to understand BPO and its terminology.

For those planning to outsource, a common understanding of BPO terms and processes can be the difference between success and failure. 

A recent study shows that 78% of firms look favorably to their outsourced providers. Coming up to speed on common business process outsourcing terms can help you become part of that 78% during your own engagement. 

To help you get started, this glossary will take you through the top 86 BPO terms you should know.

Find the best BPO companies on Clutch. 

86 BPO Terms to Know

With new BPO knowledge, your team can make well-informed decisions about the future outsourcing at your company and continue growth into the digital age.


  • Abandoned Call: A call to a customer service center that is not answered within the required time frame.
  • After-Call Work (ACW): The extra work a customer service representative must complete after assisting a customer. ACW tasks can include logging the call, filling out forms, and making notes about the conversation.
  • Agent: A person employed by a BPO provider to interact with customers on behalf of a client company.
  • Agent Occupancy: The amount of time an agent spends talking to customers or completing other tasks.
  • Analytics: The process of using data and statistical analysis to gain insights into business performance and customer behavior.
  • Artificial Intelligence (AI): The development of computer systems that can perform tasks that typically require human intelligence, such as visual perception, speech recognition, and decision-making.
  • Average Handle Time (AHT): The average time it takes a customer service representative to handle an incoming call from start to finish. — hold time —
  • Average Speed of Answer (ASA): also referred to as average delay, is the average amount of time it takes a customer service representative to answer an incoming call.
  • Average Talk Time: The amount of time spent on each telephone call, can be an indicator of customer experience
  • Automatic Call Distributor (ACD): A technology used by contact centers that automatically distributes incoming calls among agents most efficiently, functioning as an optimization of call processes.
  • Automatic Number Identification (ANI): A telephone network feature that enables a customer service representative to see the phone number of an incoming call before they answer — often referred to as caller ID.


  • Back Office: The administrative and support functions of a company that aren’t visible to customers — examples include finance, human resources, and IT.
  • Business Continuity: The planning and preparation to ensure critical business functions can continue during a disruption or disaster.
  • Business Process Management (BPM): The practice of improving and optimizing business processes to increase efficiency and productivity.
  • Business Process Outsourcing (BPO): Outsourcing specific business functions or processes to third-party service providers.


  • Call Blending: The practice of combining different types of customer contacts, such as phone calls, emails, and chat messages, into a single queue.
  • Call Center: A centralized office where agents handle inbound and outbound customer calls.
  • Call Routing: A system that automatically sends customer calls to the right agent or department.
  • Call Volume: The total number of calls a call center receives in a given period.
  • Calling Line Identity (CLI): A system that identifies the phone number of an incoming call.
  • Capacity Planning: The process of determining the resources necessary to meet future demand for products or services.
  • Chatbot: An AI-powered program that simulates human conversation and provides automated customer support, rather than relying on telephone service or call centers.
  • Computer Telephony Integration (CTI): The practice of connecting a phone system to an automated customer service system to optimize customer interaction.
  • Customer Service Representative (CSR): An employee who provides customer service and support.
  • Customer Relationship Management (CRM): The practice of managing customer interactions and relationships to improve customer satisfaction and loyalty.
  • Customer Satisfaction (CSAT): A measure of customers' satisfaction with a product, service, or experience.

example of how a CSAT is composed

Source: MonkeyLearn


  • Data Analytics: The process of analyzing large amounts of data to identify trends, patterns, and insights.
  • Data Entry: The process of inputting data into a computer or database.
  • Dialed Number Identification Service (DNIS): A service that identifies the number called by a customer and routes them to the right customer service representative.
  • Dialing Solution: A technology that automates dialing out to customers.
  • Digital Marketing: The use of digital channels, such as social media, search engines, and email, to promote products or services.
  • Digital Transformation: Using digital technologies to transform business processes, products, and services.
  • Disaster Recovery Plan: A plan that outlines the steps a business needs to take to recover from an unforeseen event. In business settings, disaster recovery typically centers around IT and cybersecurity, but it is not limited to these functions.

Additional Reading: ‘What is a Disaster Recovery Plan


  • Enterprise Content Management (ECM): The practice of managing digital content, such as documents, images, and videos, throughout their lifecycle.
  • Enterprise Resource Planning (ERP): A software system for managing and automating business processes.


  • First Call Resolution (FCR): A metric used to measure how well customer service representatives resolve customer inquiries on the first call.
  • Front Office: The customer-facing functions of a company, such as sales, marketing, and customer service.
  • Full-Time Equivalent (FTE): A measure used to calculate the number of people it takes to do a job.


  • Global Delivery Model: A BPO delivery model that leverages resources from multiple locations worldwide.
  • Grade of Service (GOS): A metric used to measure the quality of service in a contact center.


  • Help Desk: A support service that assists users of technology products or services.


  • Inbound Call: A phone call received by a call center agent from a customer.
  • Information Security: The practice of protecting information and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction.
  • Integrated Services Digital Network (ISDN): A digital telephone network used to transmit voice and data over ordinary phone lines.
  • Interactive Voice Response (IVR): An automated telephony system that interacts with callers, gathers information, and routes calls to the appropriate recipient — activated by vocal commands or through designated keys on the telephone keypad.
  • Interactive Voice Response Unit (IVR): A small box used to route incoming calls and provide basic information to customers.


  • Judgemental Forecasting: the process of predicting demand for BPO services based on knowledge, experience, and changes in the market rather than relying solely on statistical methods.


  • Key Performance Indicator (KPI): A metric used to measure the performance of a specific business process or activity.
  • Knowledge Management System (KMS): A system that stores, organizes, and manages information.
  • Knowledge Process Outsourcing (KPO): The practice of outsourcing knowledge-based business functions, such as research and analysis.


  • Lean Manufacturing: A methodology used to reduce waste and increase efficiency in manufacturing processes.
  • Lean Six Sigma: A methodology used to improve process efficiency and quality.
  • Live Chat: An online support service that provides real-time text communication between customers and agents.


  • Machine Learning: A subset of artificial intelligence that uses algorithms and statistical models to enable computers to learn from data and improve performance.
  • Managed Services: A service model wherein a third-party provider manages and delivers a specific business function or process.
  • Multichannel Communication: The ability to communicate with customers through multiple channels, such as phone, email, chat, and social media.


  • Nearshoring: A delivery model in which a BPO provider is located in a nearby country or region.
  • Network Operations Center (NOC): A central location where network administrators can monitor and manage IT infrastructure.


  • Offshoring: A delivery model in which a BPO provider is located in a foreign country.
  • Onshoring: A delivery model in which a BPO provider is located in the same country as the client company.
  • Outsourcing: The practice of contracting out specific business functions or processes to third-party service providers.
  • Outbound Calls: Calls made by a company to prospects or customers.


  • Payroll Processing: The process of calculating and distributing employee compensation, including wages, salaries, and benefits.
  • Performance-Based Contract: A contract in which a provider is compensated based on its performance, as measured by predefined metrics.
  • Predictive Dialer: Automated telephone technology used to increase the efficiency and effectiveness of outbound calling.
  • Private Branch Exchange (PBX): A telephone system for businesses and organizations with multiple lines connected to a central switching unit.
  • Process Automation: The use of technology to automate repetitive business processes.
  • Process Improvement: The practice of analyzing and optimizing business processes to increase efficiency and productivity.


  • Quality Assurance (QA): A process used to ensure that products or services meet predetermined quality standards.


  • Remote Infrastructure Management (RIM): A service that provides remote management of IT infrastructure.
  • Request for Proposal (RFP): A document used to solicit proposals from potential service providers.


  • Service Level Agreement (SLA): A contract defining the service level a provider will deliver, including performance metrics and penalties for non-compliance.
  • Shared Services: A model in which a group of companies share a single service provider for a specific business function or process.
  • Six Sigma: A methodology used to reduce defects and improve quality in business processes.
  • Skill-based Routing: The practice of routing customer inquiries to the most qualified agent based on their skills and experience rather than traditional routing to the next available agent.
  • SMS: Stands for Short Message Service — a technology used to send text messages to mobile phones.
  • Social Media Monitoring: The process of monitoring and analyzing social media channels for brand mentions, customer feedback, and other relevant information.


  • Telecommuting: The practice of working from home or a remote location using telecommunications technology.
  • Telephony Server Application Programming Interface (TSAPI): An application programming interface (API) that integrates telephony services with computer-based applications.


  • Upselling: The practice of offering customers additional products or services to increase sales.


  • Vendor Management: The process of managing relationships with third-party service providers.
  • Virtual Assistant: A software program that can perform routine tasks or answer questions, usually through voice or text commands.
  • Voice Over Internet Protocol (VoIP): A technology that allows voice traffic to be routed over the internet instead of a traditional telephone network.
  • Voice Response Unit (VRU): A device that responds to voice commands or questions and provides information.


  • Wait Time: The time it takes for a customer to get assistance from an agent or automated system.
  • Workforce Management (WFM): A process used to optimize the efficiency and productivity of a call center or other customer service operation.

Understanding BPO Terms is Critical to Companies with Plans to Outsource 

Outsourcing can be difficult, but a lack of understanding of industry terms only complicates it. 

Many organizations don’t realize how complex the process can be, and without a full awareness of all relevant terms, it can quickly become overwhelming. Seeking the assistance of an experienced outsourcing provider is a smart way to guarantee that customer service operations are staffed well and efficiently.  

Looking for the right outsourced support? Find the best BPO companies on Clutch.

Related Articles More

​​Is Business Process Outsourcing (BPO) Your Ticket to Better Customer Experience?
Benefits of Outsourcing for Small Businesses