Be a lean-mean fighting machine: 6 Reasons to outsource your back office

Whether you’re a pharmaceutical company, a major telecommunications firm, or a start-up seeking to disrupt existing markets, the competition in today’s markets is cut-throat. Everyone, from established players to the new-kids-on-the-block, is being forced to find new ways of cutting costs and making their operations ever more efficient. The slightest difference in the price offered to customers or operational costs could be the difference between life and bankruptcy.

Compounding this problem are the myriad other tasks which need to be handled even though they do not contribute towards your revenue generation and other key business activities.

As these tasks differ from your core business tasks, you need to hire people with a different skillset to handle them. This increases the size of your company’s payroll and places greater demands on your infrastructure, both of which result in higher costs.

So, how does one cut down on these costs? The answer is simple: outsourcing.

From payroll management to even research and data-mining, you can now outsource almost any element of your back office work to a third-party vendor to handle. As these companies are often based in different cities and even countries, the cost of hiring resources is much lower, which translates to lower costs for your company. Along with this, there are several other benefits to outsourcing your back office. We’ve listed the key ones below.

  • Reduced costs: As already mentioned, human resources in countries like India are often cheaper as compared to those based in the USA. This means, you can hire qualified talent to do the same work at significantly lower costs. Add to this the savings thanks to the reduced infrastructural requirements, and you’re already off to a good start.
  • More time for core business needs: Outsourcing back office also frees up a lot more time to focus on your core business tasks. Instead of focusing on generating reports or handling bills and payrolls, your staff can focus on product development, sales, marketing development and more.
  • Access to latest technology: Outsourcing to firms that specialize in these tasks/processes can have many benefits. The first is the instant access to the latest technology and software. Any good BPO will ensure that they are up to date with the latest technology and processes needed to carry out the relevant back office work. This saves you the time and money needed to purchase, install and train employees to utilize these technologies.
  • Assurance of best practices: As these firms specialize in and have vast experience in handling these processes, you can be assured that your back office processes will be in compliance with the industry best practices. This makes sure that your processes are as efficient as possible, while saving you on the time and effort required for implementing and maintaining the same in-house.
  • Work without pause: If you’re outsourcing to companies based in another country, there may be a significant gap your time-zones. This means when you’re awake, your vendor is asleep and vice versa. This can be great for your company as it ensures that each day when your employees come in to work, your outsourcing partner would have already finished with yesterday’s work thus allowing you to work on the next task without delay.
  • Flexibility in resource management: The reduction in the number of tasks you need to worry about also makes it easier to decide how and where to allocate resources. Outsourcing back office work not only makes your organization leaner, but also allows for swifter, better and more flexible resource management.

As you can see, outsourcing your back office can be extremely rewarding. With the right partner, outsourcing can help you cut your costs – which creates an opportunity to offer your customers lower prices, and manage your core business better.

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Posted by Vivek Anand

Vivek Anand has been a practitioner of Quality & Project Management principles & tools for more than a decade both as an internal and external consultant. He has had the opportunity to work with & support organizations across various industries like Manufacturing, BPO (Voice/ Non-Voice), Telecom, Background Screening & geographies like India & USA.
In various capacities he has helped organizations launch & set up - offshore sites for customer service/ back office, new products across different locations, set up process excellence team, and lead change management initiatives.