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Advantages of Back-Office Outsourcing

Advantages of Back-Office Outsourcing

Though the specific back-office needs of each company may vary according to size and industry, there are many general advantages of outsourcing to your back-office needs that are common to virtually every sizable company. These include important administrative functions like accounting, data entry, order processing, data collection, market research, and much more.

At first, administrative work may not seem like a lot to handle, but as the company scales up, it can become one of the biggest challenges that companies face.

The term “back office” comes from the original layout of a traditional business where the “front office” handled revenue-generating activities such as sales and customer service, while the back offices were reserved for operations that served a critical administrative role such as accounting, information technology and more. Today, with the rise of the e-commerce industry, back-office operations have expanded to include processes like photo retouching, content moderation and more, but the principle remains the same.

Outsourcing back-office functions are helping more and more companies get big returns. Not only are they able to improve the quality of their operations but scale their business strategies as well. Of course, the outsourcing partner plays an important part in this success by providing integrated, turnkey administrative solutions that are simple yet highly efficient.

What Back-Office Tasks You Can Outsource

Here are the 5 most outsourced back-office functions:

Data Entry

Data entry is a very wide discipline. It’s basically the process of taking data stored in a certain medium and inserting these into a computer system through a data entry interface. Simply put, it just means copy-pasting data from the source to the destination system.  The complicated part takes place when data has to be researched, identified or need interpretation or the application of business rules before these are entered into a system.

Payroll

Back then, it was believed that only established companies with a larger workforce can reap benefits by outsourcing their payroll activities. Now, startups and medium-sized companies are jumping the bandwagon after realizing the importance of outsourcing payroll and accounting activities. Through outsourcing, companies save costs by insulating themselves from what could be costly payroll tax or calculation errors and ensuring employees are paid properly and on time.

Human Resource and Administration

Businesses can outsource the entire HR area or just part of the HR function. Human resource outsourcing helps organizations achieve the highest level of employee satisfaction and streamlined business processes by freeing up their precious time and developing a better HR strategy which includes screening and hiring, auditing, compensation, leave management, retention, performance management and building better procedures and workflows.

IT Support

IT is one of the most important functions in any company and one of the vast areas in outsourcing. Post sales support or technical support is vital to any company to obtain customer satisfaction and hence customer retention, which is why queries or issues from customers must be dealt by a team of professionals with sound technical expertise and customer service experience.  An outsourced IT provider will have staff up-to-date on tools and trends, as well as provide support and remote assistance that can be difficult for a small business to manage in-house. Other advantages include access to inexpensive storage, cutting-edge security, and disaster-recovery services.

Marketing and Public Relations

If you’re a startup, small business, or an organization, you probably know that marketing your brand can take up plenty of your time, a commodity you can’t afford to waste. Outsourcing your digital/inbound marketing tasks can help you strategize and execute across multiple marketing channels while you focus on executing on other business functions. You’ll not only get all the perks of having an awesome marketing staff, but you can stick within your budget as well.

What are the benefits of outsourcing your back-office tasks?

The decision to outsource back-office functions brings with it a number of potential benefits. Here are some of the advantages of back-office outsourcing:

Reduced Overhead Costs

One of the major benefits you get when you outsource back office is reduced corporate overhead costs. You can save up to 30% to 40% of the operating costs as you do not need to hire extra staff and invest on technological and infrastructural fronts.

Experts Handling Your Work

Availing back-office support brings another major advantage in the form of experts handling your job. The outsourcing company employs professionals who are experts in their field and have years of experience handling similar projects. This expertise enables them to complete the work in quick time & that too with great efficiency.

Focus on Core Business

It’s not worth just punching in the numbers and generating reports. If you want to accelerate your business, you need to focus on core business areas that can really help to explore new business opportunities.

Increased Efficiency and Productivity

Outsourcing the non-core functions like data entry, document conversion reduces the workload on employees and significantly improves efficiency and productivity of employees.

Cost Savings

Another good reason to encourage a company to outsource back office is the cost-benefit associated with it. Outsourcing back-office support ensures that quality work is done with minimum investment. You need not hire extra staff, invest in infrastructure, and technology. Thus, it saves around 60% of the costs when you outsource back-office support to BPO process providers in India.

Summary

Defining what you want to accomplish with outsourcing is as important as finding the right partner. Without a plan for outsourcing and how to account for it and manage your responsibilities (as well as your outsourcing partner) you’re more likely to create work for yourself or set the stage for unrealistic expectations.

Before you begin any kind of outsourcing activity, think about what you want to achieve. Ask yourself how you can use outsourcing to make yourself more effective, not just reduce costs. Your goal should be to use outsourcing to build a foundation for effective and meaningful growth, not just pinch pennies. Ultimately a strategy of this nature will ensure that you deliver value to your customers by effectively managing operating the back office.

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