A BPO is basically a company that provides business services to another company--in essence, outsourcing. Usually the BPO can provide these services for less than the client company would spend to hire workers in these jobs. And the way many BPOs do this is to hire location-based workers in countries like India or the Philippines, where labor is cheaper.
While here in the United States outsourcing has become a dirty word, some BPOs actually do hire U.S.-based workers because that is what their clients prefer. This is called homeshoring. However, these BPOs need to turn a profit, so a cost savings is needed. The way many do this is by employing a virtual workforce. Workers telecommute from their own home offices, usually providing their own computer equipment, allow the BPOs to employ a large number of people with minimal real estate and equipment costs.
BPOs provide their clients all sorts of services from medical billing and accounting to call centers and data entry. These companies may hire workers at employees or as independent contractors, which have different pros and cons for workers. And while BPOs are probably less likely to offer benefits and pay as good as non-BPO companies, they are a significant force in the the companies that hire home-based workers.
To find out more about what type of jobs BPOs offer and where to find them, read: BPO Jobs From Home.