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Back Office Outsourcing: Definition, Comparison, Types, Advantages, And Disadvantages

Introduction

The term “back office” was introduced at the time of outlining businesses office functions. The front functions refer to the resources involved in the main business activities. While the back office sections are fundamentally catered to as the support function by carrying out tasks that are not associated with the main business of the organization but are important enough to operate everything smoothly. Here the concept of Back office outsourcing comes, where companies are in search of a solution that will ensure a smooth and efficient workflow of their BackOffice functions.

What is Back Office Outsourcing?

Back office outsourcing is associated with the process where all of the back-office functions of a company are outsourced to the external party vendor that is an expert in managing all BPO activities. It is very important as no company wants its business operations to be endangered.

Back office outsourcing is a well-admired trend these days for startups and also developed businesses as it allows a greater competitive benefit in the market. Several organizations overlook the inefficiencies of the back office as they feel that administrative work seems much to manage. As companies upscale, it can be irresistible that may hurt the important tasks.  In this blog, you will walk through the definition of Back office outsourcing, comparison with front office outsourcing, types, advantages, and disadvantages.

Front Office Outsourcing

Front office outsourcing reflects all activities that involve dealing with clients. The front office individuals take accountability for interacting with the current or new customers and making sure high customer satisfaction. All actions that include meeting client demand, generating sales, and offering after-sales services are dissimilar facets of front office activities. The workers decide their objectives to make sure the greatest customer satisfaction through client meetings, interviewing candidates, customer relationship building, and service marketing.

They perform an important part in utmost company review. In these times, organizations are recruiting remote front office workers from outsourcing companies where they can search for efficient workers who fulfill their needs.

Here are a few examples of front office activities that can be outsourced:

  • After-sales service
  • Technical support
  • Research
  • Help desk support
  • Taking outbound and inbound calls
  • Customer care
  • Marketing and sales
  • Market survey

Back Office Outsourcing

Back office outsourcing activities are more relevant to behind-the-scenes methods. This section is not directly connected to producing revenue. Rather they operate effortlessly and begin the whole business operations to maintain the infrastructure in check.

Without having strong Back office support the organization is unable to operate. Back office positions need strategy-based thinking, daily work progress, operational decision making, defining workflow, and much more.

Back office outsourcing tasks are more admired than front office activities as they directly impact the revenue. To operate back office support, an organization requires a greatly efficient team with several technical knowledge and expertise.

In many cases, looking for people with all the relevant skills at once is hard, so business owners search for a workforce in an online eCommerce platform and it is a proven process to get a fake result.

Back office outsourcing work includes:

  • IT functions
  • Content writing
  • Accounting
  • Human Reporting
  • Quality assuring
  • Back Office agents
  • Data Management
  • Administration
  • Resources
  • Payroll
  • Digital Marketing

Front Office Vs. Back Office Outsourcing

Business activities function in these couple of wings. Front office activities and back-office activities are important for operating a business with the objective of success.

Let’s discuss it in other words; the front office is the face of the company, whereas the back office works as an admin who sustains stability. Even though there are plenty of similarities, one function cannot operate without the support of one another. They have noticeable differences and these are mentioned:

The front office manages all face-to-face customer communication, every new and current customer is normally familiar with the front office team who is looking for direct communication. In comparison, the back office team is not directly connected with the customer. They work behind the scenes.

The back office team deals with the account, finance, IT department, and administration, on the other hand, the front office team looks after the sales services, sales generation, and all other major tasks associated with the marketing department.

The front office is directly linked to producing revenue while on the other side; the back office operates towards revenue-boosting and cost reduction strategies.

The front office gets the new deals importantly brought regarding by the continuous support of the back office.

The front office operates to enhance customer demand, and the back office offers strategies and facilitates manufacturing products, and sustains product quality.

The front office is important depending on the back-office operations as they make sure that all methods such as HR, administrative, and IT operate smoothly.

The responsibilities of various back-office functions have enhanced instant over time. Such as, the IT department’s role was restricted to hardware.

Intrinsically, the IT team is considered an important investment bank composed of professionals who establish an important technical infrastructure that facilitates the important operation. Ultimately, they are coming up with efficient strategies for operating the front office.

Kinds Of Back Office Outsourcing

The front office of a company is accountable for generating sales and profit, but it requires consistent support for performing the same. There is an important role of back-office support. Thus, the business functions are not directly linked to the main business model, they cater to an important role in entire business processes. It requires to be handled efficiently otherwise it will make a domino impact on other administrative services.

Normally Back Office Outsourcing functions include:

  • Payroll
  • Marketing
  • Human Resource
  • Information Technology Support
  • Data Entry Services

Back Office Outsourcing: Advantages

Back office outsourcing has been a vigorous alternative for businesses searching to enhance their productivity and profit. Initiation from MNCs to SMEs, all the businesses at this moment go for outsourcing their certain business functions preferably back office to outsourcing companies. There are various perks of back-office outsourcing if done appropriately. Below are the many of the perks of selecting the outsourcing partner for your company

1. Scalability

A well-maintained back-office outsourcing collaborator will allow your company to scale up in areas of productivity, profit, size, etc. the growth of the business is directly connected to the outcome of your outsourcing company. Sometimes, the outsourcing collaborator also looks for the recruiting and the training processes, therefore offering a well quality support to the organization

2. Cost-Effectively

Back-office outsourcing organizations are established to be more cost-friendly compared to the organizations that struggle to sustain a back-office collaborator. Outsourcing agencies are responsible to take care of the infrastructure, hiring, equipment, training, and many more.

3. Right To Use To Latest Technologies And Expertise

Another vital benefit of back-office outsourcing is that organizations can have access to talented people, advanced quality services, technological resources, and many more. Outsourcing companies do not only provide the best services in the area of outsourcing support functions but also highlight providing support functions with the usage of most modern technologies and give training to their people so that the result can be delivered on time.

4. More Concentration On Main Business Activities

back-office outsourcing operations such as IT support, payroll, HR services, data entry services, etc. noticeably decrease the workload of the company leading to an enhancement in efficiency and productivity to another level. Additionally, businesses can assign their resources effectively hence leading to a boost in sales and profit.

5. Time Zone Differences

Organizations having customers across the globe have to outsource back-office and customer support activities for the flawless flow of internal business methods. It is the accountability of the organization to search for its customer also as the main business model effectively to penetrate its business in abroad markets. Offshore outsourcing collaborators come at the time of organization and set their foot in the foreign market smoothly.

6. Decrease Corporate Overhead

One of the significant perks of back-office outsourcing is that it allows for decreasing corporate overhead. Organizations that outsource particular business functions seek to concentrate more on their main business activities. They do not have to hire additional people and integrate infrastructure for back-office support, therefore, saving 30% to 40% of their operational expense.

Learn More: Operational Business Processes? What Is It and Identify Its Types

 Back Office Outsourcing: Disadvantages

Ever since, outsourcing has achieved enormous popularity in the states of Europe, North America, and Australia, etc., organizations are required to investigate the demerits of back-office outsourcing that organizations should keep in mind:

1. Inadequate Attention

Keep in your mind while choosing a back-office outsourcing collaborator for your organization. Ensure that you are getting services customized to your business requirements. Organizations that are unable to maintain an appropriate communication channel with their outsourcing partner are more likely to get bad service from their back-office outsourcing partner. Therefore, insufficient attention to the outsourcing agency can lead to reduced profit and loss of customers.

2. Cultural And Language Obstacles

Normally, outsourcing includes offshore BPO organizations. Companies prioritize offshore outsourcing partner firms instead of locally available companies for different reasons like customer base, affordability, etc. making sure to check for vendors that have methods around the clock so that the customers can be served efficiently. Language is significant for communication goals, therefore select offshore outsourcing companies where you can diminish the language barrier without any hassle.

3. Issues To Quality Control

Whenever an organization goes for back-office outsourcing to an outsourcing partner, it rapidly loses single control of those functions. It is mandatory to keep a check with the external party service provider no matter if they are serving quality service timely or not. Normally, outsourcing agenesis is unable to fulfill the expectation of companies which lead to reduced productivity and an enormous loss to the company.

4. Data Security

Handover the responsibility to the external party service provided that the organization’s internal functions normally need entrusting the service provider with unique and important information. Is it one of the key concerns of the businesses that outsource their back-office activities as they do not keep the same control over the sensitive data? Therefore, it is significant to investigate the service provider while making sure that they are using the greatest security metrics for keeping your data protected.

Learn More: How Hiring A Consultant Can Help Improve Business Performance?

Wrapping Up

When the phase of growth starts in the companies in the market, back-office outsourcing is an advantage to them regardless of the size of the organization. Being a startup or a huge multinational giant, back-office outsourcing activities become more important than ever. Organizations have the elasticity of outsourcing their back-office functions to the outsourcing partners. Before going for back-office outsourcing, it is vital to define the activities that are required to be outsourced. Connect with the third-party service provider to facilitate you with the roadmap that will allow you in achieving the business objectives. If you have not considered it before for back-office outsourcing, it’s the best time to select the best back-office outsourcing agency for you.

 

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