As a holistic view on various business processes and how they are all connected, is crucial and as in practice we see an overlap between the actual processes that are outsourced, it’s probably best to look at business process outsourcing from both a vertical and horizontal perspective.
An example: digitizing paper documents (done by document service bureaus, document process outsourcers, scanning service bureaus or simply BPOs) is typically a back-office process. However, as information is crucial for several front-end processes and as digitizing paper documents is part of a broader goal, it needs to be seen from a different perspective.
If you look at what a business wants to achieve by outsourcing, digitization of paper documents, you come in vertical areas (one industry domain) such as insurance claims processing or in horizontal situations (occurring across various industries) such as Accounts Payable (Processing).
There is an increasing pressure on business process outsourcing firms, depending on their specialization, to not just reduce costs and enhance efficiency but also to be more of a strategic partner and add more value to allow organizations to focus on their core business. This allows BPOs to extend their offering, broaden their skill sets and services (closer to the business value, horizontally, vertically, with specific solutions responding to changing business needs, etc.). In some BPO segments, for instance, we see more demand for services regarding compliance and security as digitalization continues and regulatory requirements change. In other BPO segments, there is a clear demand that outsourcing providers are able to offer an end-to-end solution, including strategic tasks, so companies can free up resources to transform, innovate and create value.