For many companies looking to drive business growth and productivity, back-office outsourcing has become a vital part of the business. To accelerate business growth, you need to focus on core activities, and the back office is certainly not one of them. Therefore, it is best to outsource your internal support. Businesses should look to outsource non-essential activities to get quick results.
There are many reasons why companies are outsourcing the back office. According to Statistica, 57% of business leaders said efficiency gains are the driving force behind outsourcing decisions. Setting goals before making a decision is essential. This article will introduce you to the pros and cons of back-office outsourcing so you can make the best business decisions.
Benefits of back-office outsourcing
Here are some reasons you should consider outsourcing back office to a provider.
- Reduce overhead
When outsourcing a back office, one of the main benefits you get is the reduction in overall company costs. Since you don’t need to hire additional staff and invest in technology and infrastructure, you can save 30% to 40% on operating costs.
- The specialists will take care of your work
Back office support provides another important benefit for the people who do their jobs. Outsourcing companies hire professionals who are experts in their fields and have many years of experience in similar projects. This experience allows them to do their job quickly and efficiently.
- Focus on your core business
Administrative support is critical, but your own time and effort to build and maintain it tends to divert focus from core business competencies. It can be frustrating to spend a lot of time on management tasks instead of growing your business. By outsourcing these critical but non-essential processes to trusted professionals, you and your team will have more time to focus on the most important business aspects. Let the experienced experts do what is best for you, so you can do what is best for you, for your clients.
Don’t just enter numbers and write reports. If you want to accelerate your business, you need to focus on the core business areas that really help you explore new business opportunities.
- Greater efficiency and productivity
Outsourcing non-essential functions (such as data entry and document transformation) can reduce employee workload and dramatically increase their efficiency and productivity.
- Cost effectiveness
The first, and perhaps most obvious benefit of back-office outsourcing is improving your bottom line. Developing an infrastructure to manage internal requirements is very expensive, not to mention time. The cost of maintaining this infrastructure after development can also be high. When labor costs, employee turnover, and investment in the latest technology and training are taken into account, the bottom line is huge and ever-increasing, which could add up to many other costs for your business in comparison.
Back office outsourcing support can ensure quality work is done with minimal investment. You don’t need to hire additional staff, and you don’t need to invest in infrastructure and technology.
Disadvantages of back-office outsourcing
Businesses may find that the benefits associated with back-office outsourcing are substantial, but should be aware of the potential risks involved.
- Important information leak
When companies decide to outsource, they can easily lose key information. However, not all outsourcing companies are like this, but preventive measures are recommended. You also need to make sure that the company you choose as your outsourcing partner has a good reputation and a good customer base. Clients can help you understand your experience with outsourcing companies and influence your decision.
Background backup generally includes sensitive information that must be kept secret. When you outsource these services, you transfer this information to an outside company for processing. You will not have control over their privacy practices or how they store data. The concern here is that a careless outsourcing partner could leak information and thereby harm your business.
The best way to fix this problem is to make sure you are working with a company you can trust. Find out how they provide security and handle confidential information. Look for certifications or years of experience in your specific industry and remember to get referrals from clients similar to your business model.
- Lack of attention
This is the main disadvantage of some outsourced back-office companies in the market. You are unable to get services that meet your needs, resulting in abnormal situations and delays in completion. This is why it is important to choose the best BPO service.
- Language and cultural barriers can get in the way
Outsourcing generally means working with an offshore company in providing administrative support to your business. While this means a more accessible workforce, it can also cause language and cultural difficulties. Some companies choose domestic and foreign packages to avoid such complications, even if the price is higher.
If you want to go abroad but are concerned about cultural and language barriers, choose a partner with extensive experience in the world. Find out where your offshore company is located. In some countries with newer business plans (eg, the Philippines), the culture is very similar to that of the United States, and their English proficiency level is almost the same as that of native speakers. The best way to find out if this is a problem is to visit BPO offices abroad. This is where you can talk to management, look around the actual office, and make more informed decisions.
- Quality is more difficult to control
BPO means putting critical business processes in the hands of another party and giving up some control. While you still have control over operations, you must rely on vendors to keep your day-to-day operations running smoothly. This causes problems such as technical failures, poor output quality, and large losses. In some cases, customers face service delays, poor connectivity, and general operational issues that make outsourcing seem more problematic than economical.
The best way to resolve control issues is to hire a vendor who understands your responsibilities, and your vision as a customer is paramount. Find a partner, not just a supplier, who hires people to meet your needs, drives you through the process, works on your system, and makes quality a top priority.
- Time zone can affect service times
Problems can arise when working with remote employees (even if there are only a few time zones). When you consider the big changes in time zones and work holidays caused by outsourcing abroad, you might find some nasty business interruptions. Who wants to take the world’s weather into account when sending emails?
