Back Office Outsourcing
What to Know about Back Office Outsourcing
As the world continues to move ahead in the name of progress, businesses are looking for new ways to achieve more work while paying less. This form of cost-cutting is seen in all business enterprises with majority of these establishments choosing to outsource many departments that are considered non-essential by the company. One of the more popular forms of outsourcing is back office outsourcing.
Back office outsourcing involves hiring out jobs, mostly paperwork jobs to a third party. Many companies prefer to let external third parties handle the paperwork as this lets the company focus more on the core process of showing a profit. These back office jobs include managing payroll, creating billing forms, filling a number of information technology and data entry jobs, administering health savings accounts and/or running human resources. A company may choose to outsource one or all of these back office jobs.
So why is back office outsourcing so popular? Basically, because the process can save the company outsourcing the tasks a lot of money. Imagine a situation where all the tasks have to be handled by in-house employees. With back office outsourcing, costs such as workspace, equipment, permanent salaries, insurance, unemployment taxes, and training are the responsiblity of the outsourcing company.
The amount that one stands to save largely depends on the amount of work to be outsourced and the company that one intends to outsource to. Most companies outsource to firms that offer better rates for these tasks. The outsourced company may be located in the parent country or abroad. In most cases, the foreign companies tend to offer more competitive rates. To speed up the process, one can also provide the outsourcers with the company’s own web based software so that the data comes in the desired format.
Though the back office outsourcing process has several advantages, it also has some security issues that one has to look out for. Managing payrolls and health administrative services often have critical information which is largely considered private. The parent company must ensure that the the outsourcing service they use has secure security measures in place to ensure this information is not lost or copied in any way. Also, they should thoroughly check on the outsourcing firm’s efficiency. Many companies tend to exaggerate their efficiency statistics. This should of course be verified before hiring the company.
There are many companies that offer back office outsourcing. While some tend to specialize in one area such as managing payrolls, others may be able to handle all outsourcing needs. This largely depends on the size of the firm.
Back office processes are critical to the functioning of any company. They are essentially the back bone of the company since they are handling all their important affairs. Back office outsourcing is a service that can do this job at a much reduced cost.