Outsourcing is considered profitable and really helpful. That’s the main reason why this industry is booming. Many times, this option proves a milestone when you want to enhance efficiency at minimal cost and also, improve core competencies. Considering the back office, which includes data entry, the onboarding process, human resource management, performance analysis, or anything else that is non-customer facing, this alternative does a commendable job for you. So, let’s discover how it happens.

Benefits of Outsourcing Back Office Services 

Certainly, countless advantages can be obtained from an outsourcing partner. Here are the most appreciated and witnessed benefits:

1. Cost Savings

The very first is related to savings. Certainly, a lot of entrepreneurs choose outsourcing back-office solutions to save money. They calculate the cost of hiring, training, and then, maintaining in-house resources for data entry, management, analysis, or doing transactions, etc. And for sure, all these things require more money than outsourcing them. Even, Deloitte has found that 59% of businesses choose outsourcing to save hundreds of dollars. Some smart companies outsource it to countries where labour costs are lower, for instance, India or the Philippines.

2. Access to Expertise

Expertise requires more money to invest. And for real, you can only expect accurate predictions from a qualified analyst or data specialist, not from an operator or an inexperienced CEO. A qualified individual with hands-on experience owns specialized skills. He has the ability to efficiently handle and maintain high standards for the aligned tasks. It is proven in a survey by PwC, which found that 43% of companies hire third parties or companies to access their skills and expertise that are not available in-house. So certainly, access to expertise is an advantage that outsourcing can provide, especially to small and medium-sized enterprises (SMEs).

3. Scalability and Flexibility

The next benefit is scalability, which is associated with flexibility. It enables businesses to scale up or down back-office operations according to demand. And this task does not require them to hire or lay off staff members. Overall, it is particularly advantageous for those who experience seasonal fluctuations or rapid growth. Deloitte surveyed and discovered that 57% of businesses found flexibility to be a typical reason for outsourcing.  This kind of agility enables companies to rapidly respond to market fluctuations while maintaining operational efficiency.

4. Enhanced Focus on Core Business Activities

Outsourcing is assistance that provides you with sufficient free time to devote to strategic activities. Let’s consider the case of a company that outsources its data management duties to a company of data specialists. At the same time, it redirected its efforts towards evolving a new product, or marketing strategy because it had sufficient time to invest. If you look at the Deloitte Global Outsourcing Survey, it found that 49% of companies choose outsourcing to spend time on their core business activities.

5. Improved Efficiency and Productivity

Efficiency and productivity can be improved by embracing the latest technologies and following the best practices. A report by McKinsey confirms that outsourcing increases efficiency by 10% to 30% for a company. Once its efficiency improves, its productivity increases. This is how organizations or businesses achieve more in less time, and the reason is, for sure, an outsourcer with specialized skills.

6. Risk Mitigation

Risks can bring your profitability down. On the flip side, it can turn it up, provided you’re aware and all set to mitigate upcoming challenges. Many renowned outsourcing companies typically follow robust risk management protocols, which meet compliance and regulatory requirements. Moreover, the outsourcing partner may also leverage the benefit of its different geographical location, which might have minimal disruptions. A report by KPMG indicates that 32% of businesses hire a virtual assistant company to overcome risks.

7. Access to Advanced Technology

Industries and organizations are insanely adopting the latest technology and IT infrastructure to stay ahead of competitors. Delegating a few responsibilities to such providers brings the joy of accessing cutting-edge technology. So, they don’t need to significantly invest in them, which is purely savings. Gartner itself surveyed and found that 44% of companies outsource to leverage advanced technology and tools, which commendably enhance operational efficiency and competitiveness.

8. Better Customer Service

Back-office tasks include non-customer facing jobs. It means that you can efficiently handle operations in the backend through this alternative. And then, you would have an adequate number of hours or days to refine and revive front-office operations and customer experiences. Even Statista found that 78% of companies believe that their customer service quality has become excellent because of outsourcing.

9. Compliance and Security

Outsourcers are entities with specialized skills and certification. They qualify to produce quality through certifications like NASSCOM for technology solutions and ISO for data and IT solutions.  It means that they are very aware of stringent security measures and also, sense the criticality of sensitive data. So, they follow them stringently, Another survey by Deloitte proves that 38% of businesses outsource to abide by compliance and data security laws. It prevents hefty losses and penalties.

10. Focused Innovation

Innovation is not only about evolving something new, but also implementing it successfully. This is actually not as easy as it sounds. By understanding the significance, many companies outsource their back-office functions, leaving beneficiary companies with enough time to invest more resources in innovation and development. Moreover, they can research and develop new offerings that resonate with customers’ intent. Accenture itself surveyed and found that 45% of businesses reported increased instances of innovation because of outsourcing.

11. Reduced Operational Costs

A particular project’s cost includes its investment in infrastructure, technology, resources, and equipment to continue back-office operations. Outsourcing minimizes this cost by renting  out all these inputs at a minimal cost. This practice puts businesses in a position where they allocate their resources more effectively. The National Outsourcing Association (NOA) reported that companies have the opportunity to cut costs by up to 30% through outsourcing.

12. Time Zone Advantage

Well, time zones can be beneficial. Let’s consider a case in which a company in the Middle East can complete its tasks overnight with the support of an Asian outsourcing partner. It can help in achieving faster turnaround times. A report by McKinsey has proven that leveraging time zone differences can enhance operational efficiency by 20%.

Conclusion

Outsourcing back-office services is actually beneficial for many reasons. People find it helpful in decreasing the cost of a project, minimizing risks, and maximizing the advantages of advanced technologies and specialized skills or expertise. Besides, you can invest precious hours in a scalability and growth strategy while evolving something new that your customers intend.