Back Office Outsourcing: What it is and Why You Probably Need it
By Nadine Flores | Jul 23, 2018
What is a Back Office?
Running a business means overseeing all of its functions. These functions are commonly divided into two categories: the front office, which handles all processes that serve as the façade of your company like reception or sales; while the back office is responsible for administration and support functions. Larger enterprises usually opt to build their back office away from where the front office is, while smaller businesses either multitask to make front office staff do back office tasks and eliminate the need or house a limited back office team within the same commercial property to save on expenses. Both of these options tend to cause bigger problems that outweigh their savings: fewer support staff members mean that they can get swamped with responsibilities, and have front office staff juggle one too many jobs can lead to diminished quality of output. There are several laws prohibiting companies from overworking employees, and the last thing your business needs are grounds for a lawsuit. In order to effectively cut costs on labour and other expenses, companies have resorted to outsourcing, which is an efficient and reliable solution when it comes to staffing dilemmas.
Why are businesses outsourcing their back offices?
Since a back office is not required to face customers, having it handled by an offshore staff is just as effective as having an additional in-house team—but the difference is that offshoring comes with more benefits, making it preferable for startups and medium-sized enterprises. Outsourcing jobs to other countries cut costs, as labour fees are significantly cheaper without compromising on the quality of output. In a survey done by Deloitte, 78% of businesses around the world consider outsourcing as a positive experience. Companies have also stated in the same survey that their offshore staff enabled them to focus on their core business operations, has solved capacity issues and enhance overall service capacity. Outsourcing allows you to access professionals without having to worry about paying monumental salaries.
The negative connotation of outsourcing being a means for other countries to steal jobs has long been debunked. More and more companies are realizing that offshoring brings more good than harm, and customers benefit from it too. Take for example an article by Michael Busler, Delta Airlines moved 1,000 jobs to India in 2013 and was able to reduce costs by up to $25 Million. Their savings were then used to fund 1,200 new reservation and sales positions in the United States. Ergo, by growing your business through outsourcing, you can then use your increased profits to create more jobs at home and provide better service to your customers.
Offshoring back office work not only reduces wage fees, it also eliminates extra expenses in terms of allocating office space and purchasing new equipment. For example, instead of buying new units to provide for additional in-house staff, you can outsource IT support and just pay a fixed operational fee. According to Statisticbrain, 34% of companies prefer outsourcing IT services so they won’t have to spend more resources to buy those that are unavailable internally.
Where should I outsource my back office work?
Though there are numerous available options for outsourcing, Philippines is among the top choices for hiring an offshore staff. Several factors such as its location and people make the country preferable.
Philippines is situated at the heart of southeast Asia, serving as an entry point for other SEA countries should you want to expand your business. The outsourcing industry also receives a generous amount of support from the government, with tax breaks and business programs designed to propel the current national business environment. Since the Philippines is still a developing nation, the cost of living is cheaper—this makes labour wages three to five times lower on average, with other expenses such as communication, electricity, and housing being twice as cheap as well.
Filipinos are also known for their work ethic and skill. The Philippines produces over a hundred thousand graduates every year, making the market ripe with talents and hardworking professionals. Being highly influenced by Western culture, a majority of the population is also known for its proficiency in English, speaking in a neutral accent that can be easily understood by other countries. Back office and customer service functions that require talking over the phone is ideal with Filipinos, as hospitality and politeness is a big part of their culture.
I’m interested, how do I start outsourcing?
Philippines is home to top performing outsourcing companies that help boost the local economy. Should you want to reap the benefits of outsourcing back office services, you can begin your offshore journey with us! Here at DBOS, we make outsourcing an affordable option for businesses of any scale. If you’re looking for a way to save money and grow your business, you can click here to learn more about our services or click below to read about many other ways on how offshore staffing can help make your company a cut above the rest!