Back-office Outsourcing

The Basket of Benefits

The recession of 2009 has brought about significant changes in the outsourcing space. Back-office activities of companies genuinely lend themselves seamlessly to being outsourced to specialist service providers. Today we see that the key issue is no longer whether to outsource back-office or not, but the focus is more on the specific approach: which of our back-office processes do we outsource?

Today, we also see that multi-sourcing has also emerged as a major trend, where a primary supplier functions as a contractor and arranges other suppliers, or a group of suppliers collaborate to offer a collection of services.

The benefits of back-office outsourcing are truly significant, in more ways than one.

Spotlight on Core Competencies
During high growth periods, the back-office operations of a company will also increase considerably. This always results in precious resources (human and financial) being consumed at the expense of the core activities that have made your company successful. Outsourcing those activities will allow refocusing on those business activities that are important without sacrificing quality or service in the back-office.

Significant Cost Efficiency
The capacity to understand what a service will cost for a financial year is attractive to many business proprietors. Combined with the advantage that outsourcing can actually reduce expenses it becomes an enticing alternative matched against the costs of having employees on the payroll.

Service Quality
This is often an area of some disagreement between industry experts and business owners. But the fact remains that making use of an expert, dedicated business generally provides a better service quality than could be supplied by in-house employees. As the outsource company is going to be entirely focused on that one process it seems plausible to presume that they can supply a professional quality of service. Some may disagree, believing that in-house people know the specific nuances of the company and know the people who work in the company and provide them with an original insight to offering back-office support. This is obviously a judgment call, but the fact remains that it is unlikely to have a negative effect on quality.

Security and Safety
You will find concerns that the outsourcing provider may not apply your best-practice procedures with regard to security of data. This objection is readily overcome by being careful in selecting your outsourcing service provider and conducting your own due diligence homework when searching for vendors. For example, try not to be lured by ultra low-priced costs from abroad if you are based in the United Kingdom and wish to outsource your payroll activities. It may be sensible to find a British payroll outsourcing company that will fully grasp the local setting, regulations and customs.

Operational Control
Operational costs that are escalating at a rapid rate must be considered for outsourcing. Departments that may have evolved over time into high-cost and poorly managed areas are prime motivators for outsourcing. In addition, an outsourcing company can bring better management skills to your organizational processes, than what would otherwise be available.

Immunity to Employee Turnover
Every organization will go through phases of high employee turnover and this will add uncertainty and inconsistency to the operational ability of the company. In that sense, outsourcing will provided a level of stability to the company.

Taking the above advantages into consideration, each organization should carefully consider whether these advantages will apply to them, and to what extent. Based on the outcome of this assessment an organization can start taking the first steps in the outsourcing process, and head for optimal operational efficiency.

For more information about our services please contact:

Mar Hernandez m.hernandez@amicorp.com