Written by Dion Jay Tality
A successful business requires a solid back office. This department works behind the scenes, essentially supporting the front office in customer-facing tasks.
However, a large or mid-sized business enterprise without a back office or a disorganized one can disrupt operations and cripple a business. That’s why it’s crucial to invest in workforce, technology, and resources to streamline the back-office department. When it comes to optimizing the back office, outsourcing is the key.
This article covers what back-office support is and how it is outsourced. Read further to learn some outsourced back-office operations and their advantages for your business.
What Is Back-Office Support?
The back office is a department that works behind the scenes. Unlike the front office, it’s not customer-facing and doesn’t directly deal with customers.
Essentially, the back-office department supports the front office in its operation. For instance, a customer calls to request a copy of their billing statements. The back office creates and manages invoices and even processes customer requests. Without a back-office department, the front office will have to do all the work.
Aside from providing support services, the back office handles administrative tasks fundamental to the business’s day-to-day operations. Think of the recruitment that hires people, human resources (HR) that manage employees, payroll that processes employees’ salaries, and the information technology (IT) team that deploys, maintains, and updates software and hardware.
How Is Back-Office Support Outsourced?
Outsourcing is the practice of hiring a third-party service provider to handle some parts of your business operations — in this case, your back-office support.
For back-office outsourcing, you can work with an external vendor rather than keep it in the company. A business process outsourcing (BPO) provider can either be onshore (within the country) or offshore (overseas).
In addition, you can hire freelancers such as virtual assistants to manage administrative tasks and support specialists to handle support services like data entry, inventory management, and customer request processing.
The BPO industry has grown dramatically in recent years. Some front-office tasks like customer service, technical support, and sales have been outsourced and the back-office support functions have followed suit.
A recent report estimated that global companies spend $230 billion on BPO management. Aside from front-office functions, this expenditure includes back-office processes like finance, payments, procurement, and claims.
What Are the Different Back-Office Departments Being Outsourced?
There are several different back-office functions you can outsource. Below are some of these tasks:
Data entry is the input of information into a computer in a digital format. However, there is more to this than you might think.
The process also entails researching, recording, organizing, and managing data and information. As it can be repetitive and tedious, outsourcing data entry can be your best course of action.
Accounting and Finance
A business boils down to earning revenue and making profit. For this reason, maintaining the company’s financial health is imperative. That’s where accounting comes in for managing business finances.
It’s best to outsource your accounting and finance to a highly reliable and trustworthy BPO provider. Their certified public accountants (CPAs) can manage, analyze, and report all financial transactions. Also, consider outsourced bookkeeping to ensure accurate financial recording.
Recruitment, Human Resource, and Payroll
These three administrative functions need to work hand-in-hand for streamlined business operations. While recruitment screens applicants and hires the best candidates, HR manages these hired employees.
In addition, payroll steps in to compute salaries and pay employees appropriately. In some cases, you may need to outsource these three back-office services if you lack staffing and technology.
Marketing is responsible for promoting the products or services of your business. Marketing can be offline (print, TV, or radio marketing) or online (digital marketing like SEO, PPC, email marketing, content marketing, or social media management). It’s best to outsource your marketing to experts.
Information Technology (IT) Support
IT support involves network management, software update, hardware maintenance, telecommunications, and troubleshooting. This back-office function requires the technical know-how and skills of IT experts. Hence, outsourcing can be the most viable solution for this specialized work.
What Are the Advantages of Outsourcing Back-office Operations?
A recent report shows that back-office outsourcing holds the largest segment of the global BPO sector. These include submarkets such as finance and accounting outsourcing (FAO), human resource outsourcing (HRO), and procurement outsourcing (PO).
There are many good reasons companies and organizations outsource their back-office operations. Below are some of the advantages:
One primary advantage of back-office support outsourcing is cost-efficiency. Not only does it reduce your labor and production costs, but it also makes your back-office work more efficient, streamlined, and seamless. Ultimately, back-office outsourcing services can help you save on expenditures in the long run.
Access to Experts and Resources
Some back-office functions require industry experts and the latest technology. Think of IT support that requires technical knowledge and expertise in information technology.
Also, consider marketing that calls for digital marketers with knowledge and skills in search engine optimization (SEO), pay-per-click (PPC) advertising, email marketing, content marketing, and social media management. With all these requirements, outsourcing can be your best option.
Streamlined Workflows and Optimized Processes
A third-party service provider with a highly trained workforce and the latest technology can help streamline your back-office workflows and optimize the entire process.
For instance, outsourcing finance can provide your business with certified public accountants (CPAs). They can also leverage accounting software and automated tools to optimize your accounting process. Ultimately, they can kick your business finances up a notch!
Focus on Core Functions
As a CEO, leader, or manager, you should prioritize your core function — to boost profits and grow your business. At the same time, you shouldn’t neglect your back-office support.
But if your in-house employees can no longer handle back-office work, taking it to a reliable BPO provider can be your best course of action. This way, you can focus on your core competency.
Business Growth and Scalability
The ultimate advantage of outsourcing your back-office support is how it will scale up your business. A high quality and reliable third-party service provider will help your business grow and succeed. Hence, be highly selective in choosing a BPO company best suited for your business.
The Bottom Line
The back office is the backbone of a business. Essentially, it supports the front office to ensure continuous operations. It also strengthens the business foundation so that the front office can meet customer needs.
To ensure a robust back-office department, consider outsourcing. Work with a third-party service provider for some back-office operations, whether administrative tasks or support services. Not only will outsourcing reduce your business costs, it will allow you to tap the best talent, latest technology, and necessary resources.
While you focus on your core business function, a third-party service provider will streamline your workflows and optimize your processes. Ultimately, outsourcing your back-office support can help scale up your business!