Outsourcing services can be categorized in two categories: BPO Outsourcing & KPO Outsourcing.

The IT/BPO Company, for example, might outsource the services related to the information technology, business processing outsourcing and knowledge processing outsourcing.

Typical BPO outsourcing services are like as multimedia & animation, bookkeeping and financial services, business consulting, CAD/CAM, call center, data entry, DTP, typesetting, Handwriting services, HR services, internet marketing, legal services, medical billing, proofreading, editing, software & technology, transcription, web design & web development and writing & Translation.

Some of typical KPO services are like as knowledge processing outsourcing services, intellectual property research, animation & simulation services, data research & analytics, litigation Services, medical content & services, pharmaceuticals services, writing/content development services and database development services.

The outside firms that are providing the outsourcing services are third-party providers, or as they are more commonly called, service providers. Currently, outsourcing takes many forms. Organizations still hire service providers to handle distinct business processes, such as benefits management. But some organizations outsource whole operations.

The most common forms are information technology outsourcing (ITO), knowledge processing outsourcing (KPO) and business process outsourcing (BPO). The challenges of outsourcing become especially acute when the work is being done in a different country (offshore), since that involves language, cultural and time zone differences.