Back Office Outsourcing Benefits

Creating a successful business requires tremendous effort and the ability to organize processes within the company. But processes such as human resources and information technology management are difficult to manage without proper expertise – especially if all your attention is on the product you're building. When you hire a top-notch outsourcing company, experts from another company handle all these important administrative tasks on your behalf. In turn, you'll be able to focus on promoting your company, product, or service rather than wasting time on behind-the-scenes duties.

What is back office outsourcing?

In general terms, back office outsourcing is hiring an outside company to handle tasks not directly related to providing products or services to customers.

Essentially you are hiring another company(s) to do the work of multiple departments with increased efficiency and effectiveness.

The most common outsourced tasks

• Data Entry

Data entry is one of the most routine tasks, but it plays an important role in business. It involves transferring digitized data from a particular source to another system.

To improve operational efficiency, companies are outsourcing the data entry process. This keeps the data safe with security measures and saves a considerable amount of time and resources.

It also reduces the workload of in-house staff significantly.

According to a recent report, the data entry outsourcing market grew at a CAGR of 46% driven by key countries in Asia Pacific (APAC) such as China, India, and the Philippines.

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

• IT Support 

In 2021, the IT outsourcing services market was valued at $526.6 billion. The market is projected to grow to $682.3 billion between 2022 and 2027.

Maintaining customer satisfaction and retention is a critical and major challenge for any business.  Companies need to provide effective customer and technical support to their clients.

IT outsourcing services can resolve any technical issues that require troubleshooting. Thus, IT or tech support services not only provide a higher level of customer service but also relieve in-house employees from complex technical tasks.

• Administrative 

Back office outsourcing is often associated with administrative tasks. The administrative function is the backbone of back office outsourcing.

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

Thus, back office administrative functions ensure business development and smooth operation of internal processes.

• Human Resources Outsourcing

According to a recent report, nearly 75% of employers globally are facing talent shortages and are struggling to hire talent.

Human resource and recruitment outsourcing specialists help a company develop a strategic HR strategy that includes recruitment, selection, hiring, compensation and benefits, employee management and other tasks that can help create smooth workflows and procedures.

This type of back-office service can save significant time and effort, which can contribute to a higher return on investment (ROI).

• Accounting 

Financial management is usually crucial for any business. It requires a high level of accuracy and transparency, which helps in coming up with a better financial strategy.

With the help of an offshore professional such as an accountant, payroll specialist or even a data analyst, it is possible to ensure that the financial procedures in a company run smoothly.

• Digital Marketing

Marketing outsourcing is the hiring of external specialists or agencies to perform some or all of a company's marketing activities. It can include tasks such as content creation, social media account management, advertising campaigns and market research.

By outsourcing marketing, you can tap into the expertise and resources of external professionals without having to hire an in-house marketing team. This will allow you to save time and money while still achieving your marketing goals.

Outsourcing marketing also gives companies flexibility and scalability. For example, if a company wants to launch a new product or enter a new market, it can quickly scale up its marketing efforts by hiring a team of professionals who specialize in this area.

Top-5 Benefits of Back Office Outsourcing

Back office outsourcing has many benefits to help your business grow as a whole.

Cost reduction

An obvious benefit of back office outsourcing is increased profits. As mentioned above, setting up and maintaining the infrastructure that supports the back office is time-consuming and costly.

When you consider labor costs, employee turnover, investment in the latest technology and staff training, these costs can override many other company expenses. Back office outsourcing is a much more affordable solution. When you outsource, you get ready-made infrastructure and cheap labor.

Provides more flexibility

Today, businesses are growing at an unprecedented rate. To sustain this growth, they need to be fully prepared to adapt to the ever-changing market. With reliable back office outsourcing, businesses gain more flexibility when they need to scale up their operations. With an outsourced team, businesses will find it easier to handle everything from management to training.

Reinvest in your business

The greatest value of outsourcing lies in the budget potential. Eliminating the cost of maintaining an in-house team opens up countless opportunities for reinvestment. If you've been thinking about expanding your business, outsourcing your back office can play an important role and give you flexibility in your decision-making.

Outsourcing can save you time and money, which means you can set a goal and achieve it quickly through increased investment. It can also be used as a quick response buffer and you can hire more talented people in your internal departments and strengthen your core business. With outsourcing, the ball will always be on your side.

Access to the latest technology

Another major benefit of outsourcing back office services is that companies get direct access to the latest technology and infrastructure. Mostly outsourcing companies provide services round the clock. You can save your time, money and resources on acquiring technology, software, hardware, etc. by simply outsourcing them to a third-party professional provider.

Focus on your core business

Back office support is important, but spending too much time and effort often distracts from your core business. It can sometimes be frustrating to spend too much energy on administrative work rather than the vision of the business. By outsourcing these processes to specialists, you can focus more on other important aspects of your business. Let an outsourcing partner take care of your back office services, and you can focus on serving your customers.

How to effectively organize the process of back office outsourcing

While you can outsource your back office services to a company that can complement your needs well, outsourcing can also have its issues and challenges. It's important to understand how it works and what the pros and cons are before making a decision.

Data security can be compromised

Back office support usually involves sensitive data that requires confidentiality. By outsourcing, you are putting all sensitive data in the hands of the service provider. You don't know its policies and security practices. One carelessness by the outsourcing company can lead to data leakage, which will damage your business.

The solution is obvious – outsource to a company you can trust. Find out how they control security and dispose of sensitive information. Back it up with good research about the company and how they've worked with clients over the years. Check their industry experience, awards, policies, certifications and always take references from them.

Lack of attention

When you outsource a business process, it is important to keep control in your hands. This way, you will be sure that you and the contractor are going towards the same goal and the task will be done the way you need it to be done.

You can organize weekly sessions with the contractor to keep you up to date on the work process. This will help you synchronize, understand what stage of the work is in, if there are problems in execution. 

You will also be able to quickly make a decision to change any process.

Language and cultural barriers

Choosing contractors to outsource from other countries can be a good solution in some cases, cutting costs a lot.

Often outsourcing involves working with a foreign company. With advantages such as available labor, it can come with challenges such as language and cultural barriers. In these cases, companies prefer to outsource domestically.

Companies that want to outsource back office support and are worried about language and cultural barriers may be wise to choose a partner with extensive international experience.

Outsourcing back office tasks is really helpful in running a business. It can help you cut costs, make your business more agile and able to adapt to new market conditions, free up resources to improve your product and better focus on what you create.

We at ReStaffy regularly use the services of outsourcing partners – otherwise we wouldn't be promoting our platform so actively :)

But like all tools, outsourcing has its strengths and weaknesses and will not solve all business problems. It is important for businesses to assess which model will be more profitable and effective for them and honestly answer the questions: "Does my team have enough expertise to get the same result without outsourcing? How many resources can I save? Am I willing to delegate these business tasks to an outside company?".

And if you decide that outsourcing is for you, you can always find the right contractors or post your task on ReStaffy.