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What is the Difference Between BPO and Shared Services?

Business Process Outsourcing (BPO) and Shared Services both work to remove manual, operational, and repetitive tasks from the organization’s workflow. But are there differences between BPO and Shared Services? And, if so, what are they?

Is Shared Services the Same as Outsourcing?

The short answer is no, but it’s a common misconception. Shared services and outsourcing are two different things, although they are often confused. Shared services is a model for delivering services to the business that may involve outsourcing as part of the model. Organizations take different approaches that range from a fully in-house or captive shared services model to a hybrid model with some work performed in-house and other work outsourced to a fully outsourced model. Business Process Outsourcing (BPO)

Outsourcing is the practice of contracting with a third-party provider to handle certain business functions. This can include tasks like customer service, data entry, accounting, IT services, and human resources.

BPO can be a cost-effective way to free up internal resources and focus on other areas of the business. It can also help to improve efficiency and quality by accessing a pool of skilled workers that can balance changing levels of demand across clients. When done correctly, BPO can be a valuable tool for businesses of all sizes.

BPO Pros and Cons


  • Can help to improve efficiency and quality
  • Can be a cost-effective way to free up internal resources


  • If not done correctly, can lead to decreased quality standards
  • BPO contracts can be difficult to cancel

Shared Services

At its simplest, shared services is a business model that enables an organization to deliver a service more effectively or efficiently by sharing resources across the enterprise. The shared services model has been around for decades, but it has continued to gain popularity as a way to drive cost savings and improve efficiencies.

The benefits of shared services are many, but some of the most commonly cited include reduced duplicate effort and cost, improved quality and consistency, and improved controls and data. In addition, shared services can help to create a more collaborative and cohesive work environment. As more organizations look to adopt the shared services model, it is clear that the benefits far outweigh the challenges.

Shared Services Pros and Cons


  • Increased efficiency
  • Improved quality and consistency
  • Reduced cost
  • Improved controls and data
  • Can help to create a more collaborative and cohesive work environment


  • Shared services can be difficult to implement
  • Requires buy-in from all departments involved
  • Can be challenging to measure success

The decision to go with a BPO approach or Shared Services model should not just come down on cost alone and may involve a hybrid solution. Many factors need consideration, including the objectives of your company, the budget you have available for your project, the timing requirements for implementing the new model, and the resources available to support the work. In any case, it is important to make sure things get done efficiently without compromising quality standards. Both approaches can be beneficial to businesses of all sizes, so it’s important to weigh the pros and cons of each.

Do you need BPO, Shared Services, or some sort of hybrid? Talk to the experts in Shared Services to discuss your needs. Reach out today.

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