Back office outsourcing: Why do you need it?

Most businesses, such as small and medium enterprises (SMEs) and even startups, encounter challenges in achieving business growth.

There is a need for laser focus on matters like managing and ensuring operations, business core competency, and efficient work processes.

In such a case, businesses require robust back-office support services to keep up with the growing trends and establish a competitive edge that ensures the company’s success.

The main driving force behind back office outsourcing is its cost-effective solutions, which are beneficial for any organization with limited time and resources.

What is back office outsourcing?

Back office outsourcing is a business process outsourcing (BPO) practice where the company outsources workload from the business’s back office.

While front-office services focus on customer interactions and sales, back-office operations are the backbone that supports these functions.

It usually involves delegating tasks to remote workers from a third-party provider instead of the company’s in-house staff.

Delegating tasks like data entry, billing, and IT support to specialized teams and office departments can prioritize core activities and boost overall efficiency.

This strategic approach not only enhances productivity but also ensures accurate management of crucial business data, ultimately contributing to a well-structured and thriving organization.

The term “back office” refers to the portion of a company that is not involved in client-facing tasks yet supports the front-office functions.

Clearly, repetitive and monotonous tasks highly affect employees’ productivity. Outsourcing back office operations is one way for organizations to resolve this tedious cycle.

5 commonly outsourced back office services

Outsourcing back office tasks streamlines any process, which helps reach business continuity and growth.

Successful back office outsourcing involves handing over various business processes to a specialized outsourcing firm.

Here are the most common back-office services that companies outsource.

1. Data entry

Data entry is one of the most mundane tasks, yet it plays a vital role in business operations. It involves transferring digitized data from a specific source to another system.

Among the widely outsourced services are data entry, catalog management, document verification, and data entry services

Companies outsource data entry processes for operational efficiency. This helps them safeguard data with security measures and save time and resources.

Data entry ensures seamless entry and organization of critical information, while catalog management services focus on maintaining up-to-date product information.

Document verification services play a vital role in ensuring the authenticity and accuracy of important documents.

It also significantly decreases in-house staff workload, often considered a huge burden for employees.

A recent report by technavio reveals that the data entry outsourcing market experienced 46% market growth from key market countries in the Asia Pacific (APAC), such as India, China, and the Philippines.

It is projected to grow by  USD 504.12 million by 2025.

2. IT support 

The market is forecasted to increase to USD 682.3 billion between 2022 and 2027. Maintaining customer satisfaction and retention rates is a crucial challenge for any business. 

Firms need to provide effective post-sales support or technical support for customers. IT outsourcing services deal with any technical issues that require troubleshooting.

Thus, IT or tech support services not only ensure a higher rate of customer experience but also relieve in-house staff of complex technical responsibilities.

3. Administrative 

Back office outsourcing commonly involves delegating administrative tasks to specialized companies, allowing the in-house team to focus on core business activities.

The most common types of administrative tasks are bookkeeping, email and calendar management, transcription, research, content development, presentations, and more.

As such, back-office administrative functions ensure business development and keep the internal processes running smoothly.

Back office outsourcing companies bring expertise and efficiency to these operations, enabling businesses to streamline processes and enhance productivity.

4. Human resource outsourcing 

According to a recent report by ManpowerGroup, almost 75% of global employers face talent shortages and struggle to hire capable talent.

HR and recruitment outsourcing experts help the company develop a strategic HR strategy, including hiring, screening, onboarding, compensation and benefits, employee management, and other tasks that may support establishing seamless workflows and procedures.

Partnering with a reputable outsourcing partner specializing in human resources can give organizations access to a dedicated team of HR professionals. They can handle tasks such as:

• Payroll processing
• Employee benefits administration
• Recruitment
• Compliance management

This type of back-office service significantly saves time and effort, which may help achieve a higher return on investment (ROI).

5. Accounting 

Finance management is usually crucial to any enterprise. It requires high accuracy and transparency, which helps create a better financial strategy.

It guarantees smooth financial procedures within the company with the help of an offshore expert such as an accountant, payroll specialist, or even data analyst.

Many businesses opt for outsourcing to save money and enhance cost efficiency.

By delegating these tasks to specialized professionals, companies can focus on their core operations while reducing overhead costs associated with office space and employee salaries.

Why your business needs back office outsourcing

Indeed, back office outsourcing is integral to any business operation as it gives several advantages relevant to business growth.

One of the primary benefits of back office outsourcing is cost reduction. With the right third-party or outsourcing provider, the company can save up to 75% in staffing costs.

For the majority of organizations, hiring professionals would be a hassle as it requires a lot of company expenses, time, and effort.

Leveraging back office outsourcing ensures high-level flexibility, scalability, and cost reduction.

Moreover, back office outsourcing services allow businesses to access a huge global talent pool. It guarantees much better quality performance and service as compared to in-house employees.

Opting to outsource back-office services to a third-party service provider can boost productivity and efficiency, allowing the company to focus more on core operations.

Consequently, outsourcing back office functions is becoming increasingly popular because many companies acknowledge its significant benefits. With the right choice of an outsourcing provider, the company’s success is much easier to achieve.

Back office outsourcing is crucial for businesses due to various reasons, with data security being a top concern.

Outsourcing companies specialize in implementing robust security measures to protect sensitive information, reducing the risk of data breaches and cyber threats.

Cloudstaff is one of the Philippines’ leading business process outsourcing services providers, including back office roles.

As one of the country’s premier BPOs, you can be assured that your back-office processes are in safe hands when you outsource with Cloudstaff.