Companies enter into new ventures so as to survive tight competition thereby increasing their workload. So as to meet such increased workload increases it needs to employ more people to do the work resulting in setting up a new infrastructure, meaning a huge investment. In such cases so as to make it cost effective while not compromising on quality of services, these companies outsource their work to some third company who will look after that part of their office. The company to which the work is assigned has to concentrate only on that aspect thus completing it more efficiently. This helps the original firm to have an opportunity to concentrate on its core competency.

BPO is aimed at reducing cost thereby increasing service levels and thus improving the enterprise value of the business processes. BPO is a thorough mix of business process improvement, labor arbitrage and technology enhancements. To make a firm stand in the industry a proper mixture of highly qualified individuals, business leads and technology are required.
India is rightly termed as a BPO hub due to its abundant skilled manpower with high rankings in qualifications, capabilities, quality of work, linguistic capabilities and work ethics.

Indian centers have achieved higher productivity levels in terms of the number of transactions per hour for back office processing. One of the biggest plus points of BPO services in India is that they can provide 24x7 services with a reduction in turnaround time by leveraging time zone differences made possible by India's unique geographic positioning.