It’s one of the most overlooked, but integral, forces driving a business’s growth—the back office. From administrative tasks to support functions, the back office plays a vital role in ensuring smooth operations, compliance and customer satisfaction.
However, the demands of managing these non-core functions can divert valuable resources and hinder an organization’s ability to focus on its core competencies. Enter back office outsourcing, an innovative solution that’s revolutionized the way businesses operate.
From cost savings to improved efficiency and more, discover the benefits of back office outsourcing. Use our expert guide to explore the transformative benefits, delve into key considerations, and understand how to make informed decisions that can propel your organization forward.
What Is Back Office Outsourcing?
Back office outsourcing is when businesses delegate their non-core business functions, like administrative and support functions, to a third-party provider.
These functions are typically essential for the smooth operation of a company but are not directly related to its core business activities. By outsourcing back-office tasks, organizations can focus on their business goals while relying on specialized third-party providers to handle administrative, operational and repetitive tasks.
The back office may not be the core of the business, but it’s an integral part of what keeps a company running. A 5-star chef may have an incredible talent for cooking—but they still need sharp knives, a clean kitchen and everything prepped for them to perform their best.
Having smooth processes and detail-oriented administrative support staff is like having a clean kitchen for that chef—it supports your top players, allowing them to perform their best so you can reach your growth goals.
Why Do Companies Choose Back Office Outsourcing?
The primary reasons for back office outsourcing are to save on the costs of hiring an employee, to get access to specialized expertise or to have a flexible staffing option that fits best with your business model.
Back office outsourcing is much more cost-efficient than hiring in-house staff, and it allows businesses to hire staff on their terms, when they need it.
For example, back office outsourcing makes sense for law firms who need specialized expertise for a specific case, but not year-round. Or medical practices that need added support staff to help with scheduling appointments at the end of the year, when most people are trying to use up their benefits. Here, outsourcing would allow these practices to add additional support staff as needed—without having to hire and fire the needed temporary office staff. Many businesses are slowly beginning to realize the value of handing over non-core functions to back-office outsourcing services in order to free up time for more important functions, particularly everything that drives the business forward.
Popular Back Office Outsourcing Services
- Customer support services: From answering the phone and emails to answering customer FAQs, the goal of customer support is to ensure customer satisfaction, build positive relationships and enhance the overall customer experience.
- Data entry and management: Depending on the industry, this can include transcribing, updating customer information, entering accounting records, entering patient data into electronic medical records and more.
- Claims processing: Checking claim requests for adequate information and authenticity.Processing insurance claims, including verifying patient eligibility, determining coverage and coordinating with payers.
- Accounting and bookkeeping: Recording and organizing financial data. This can also include invoicing, filing receipts and bills, as well as recording business transactions.
- Human resource management: Outsourcing allows companies to access experts to handle HR including leave management, compensation, employee screening, recruitment and more. By outsourcing HR, companies can conserve resources while benefiting from improved cost-per-hire and a higher return on investment.
- Inventory management: Outsourced staff can help with the process of ordering, managing and storing company’s inventory, making sure the right products are in the right place at the right time.
- Order processing: Starting with order fulfillment, outsourced talent can help with order processing and workflow that ensures customer orders are properly prepared and delivered to the right place.
Benefits of Back Office Outsourcing Services
Here are some of the top benefits:
One of the major benefits of back office outsourcing is cost reduction. By outsourcing non-core positions, organizations can save big on expenses related to hiring, training in-house staff and maintaining infrastructure.
With outsourcing, you’ll be able to access fully-vetted professionals who are dedicated to your business for less than what you would pay for resources in the U.S.
Companies can save on hiring and training in-house staff while avoiding administration fees, added office expenses or any other unnecessary costs—giving your business access to specialized skills and resources at a fraction of the price
Reduced Administrative Burden
Billing, scheduling and transcribing can be time consuming, leaving managers caught up in administrative tasks, instead of growing the business. Outsourcing allows you to to focus on the core business, rather than spending time and resources on administrative tasks.
With agile staffing that fits their needs, businesses can scale more easily.
Outsourcing allows organizations to scale their operations quickly and easily in response to fluctuating business demands. This allows them to take advantage of increased workers during peak seasons or periods of growth—without the need to hire or fire in-person staff.
Downsides of Back Office Outsourcing
Some businesses may be concerned about quality control issues. Many providers prefer in-house staff. Management who are hands-on in their oversight and prefer in-office workers can struggle with letting a third party handle some operations.
It’s important for decision-makers to be sure the outsourcing partner they choose has effective quality control measures in place to minimize errors and ensure accuracy.
Communication challenges can happen when working with your outsourcing partner. These can happen especially if the company is located in a different time zone or has a different work schedule. It’s best to choose a service that’s in your timezone—and do your research upfront before choosing a partner to ensure they’re in your timezone.
Average Cost of Back Office Outsourcing Services
The average cost of back office outsourcing services can vary widely depending on various factors. Things like the scope of services, the complexity of tasks and the geographic location of the outsourcing provider, can all affect the cost of outsourcing.
It is important to note there is no fixed average cost that applies universally. To get an accurate estimate of the average cost of back office outsourcing services, organizations should consider obtaining quotes and proposals from multiple outsourcing providers.
Successful back office outsourcing requires careful planning and vendor selection. Be ready to strike a balance between outsourcing critical functions and maintaining control over strategic decision-making.
By establishing strong partnerships with trusted providers, maintaining clear lines of communication and setting performance metrics, you can find the right partner and hit your growth goals.
In this fast-paced business landscape, back office outsourcing can give you a competitive advantage, allowing your business to stay nimble, responsive and customer-centric.
Get started with back office outsourcing and free up valuable time and resources so you can refocus on innovation, market expansion and all the things that drive your business forward. Contact us today.