How Do Back Office Services Improve Business Productivity? - Newport Paper House

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How Do Back Office Services Improve Business Productivity?


The competition in the present scenario is all-time high. Companies are frequently finding ways to improve their productivity and efficiency, which is helping them gain a competitive edge via efficient back-office services. These services include a wide range of administrative and support services, that support the core processes of businesses. Companies can focus on their primary business activities by hiring a professional to optimize back office activities and, hence, boost productivity.    

This post will introduce you to the most obvious benefits of back office support and services. Let’s get started with the definition of back office services.

What Are Back Office Services?

Back office services refer to all activities involved in the administration and support of a business. These activities may not involve activities that require direct communication with customers.  To better understand, let’s get through some examples:

  1. Accounting and Finance: These services are typically related to maintaining bookkeeping, payroll, financial reporting, and accounts payable/receivable. These practices are mainly concerned with the matter of inflow and outflow.
  2. Human Resources (HR): The next services include all practices related to human resources, like the onboarding process, employee record maintenance, and benefit administration. It does not involve direct interaction between a candidate and the company owner.
  3. IT Support: This is the most crucial service, which encompasses network management, software maintenance, cybersecurity, troubleshooting, data backups, software updates, etc.
  4. Data Management: These services cover a wide range of solutions, starting with data entry, processing, management, verification, enrichment, conversion, and analysis. Simply put, these services include everything related to data and its driven benefits.
  5. Administrative Support: Document management, scheduling, and communication management.

The Impact of Back Office Services on Productivity

Certainly, sharing burdensome services is like shedding loads. Let’s explore how outsourcing back office services can help to sustain and stay ahead of the curve.


  1. Cost Efficiency

The primary thing to consider is cost efficiency, which is directly related to money savings. A report by Deloitte states that outsourcing can ensure savings of up to 30%–40% on these services. If you consider the basics, reducing overhead expenses like salaries, benefits, and office premises can save you money. By allocating services to remotely located professionals on a pay-as-you-go payment model. This is how companies have opportunities to invest more money and time in their core activities so that overall productivity can be scaled up.  


  1. Focus on Core Business Functions

Hiring a qualified professional for back-office tasks can provide a free time slot, which can be utilized to improve core activities. A study by Bain & Company indicates that outsourcing non-core activities provides 60% more time to evolve ideas for strategic growth and initiate them. Spending that much time on innovation enables businesses to increase their revenues and expand their business reach.


  1. Access to Expertise and Advanced Technology

Outsourcing means contracting with a qualified professional, who will use advanced tools and technologies to automate and increase savings through better efficiency. It means that a manufacturer, for example, can employ tools like Talend or AWS for managing and effectively presenting their data. These cutting-edge tools and security measures may not be available at the manufacturing house. If you consider the findings of IBM, it states that businesses outsourcing IT services often experience a 45% rise in their operational efficiency. This is simply the positive outcome of advanced technology integration and expert back office management.


  1. Scalability and Flexibility

Scalability and flexibility are intertwined. The incorporation of a third party allows businesses to emphasize operational scalability according to demand. If it’s low, reduce projects for processing. And if it is high, do vice-versa. So, the demand confirms if it requires more hiring or laying off staff. A survey by NASSCOM states that 70% of businesses believe that third-party support has made them adaptable to market changes. This capacity helps in maintaining high productivity levels in response to new opportunities and challenges.


  1. Improved Accuracy and Compliance

Just imagine a scenario wherein the HR department manually processes salaries every month with many discrepancies. Outsourcing this task will certainly minimize errors. Above that, it will regulate the process on time. This is simply because the outsourcing company automates payroll processing, which reduces up to 85% of payroll processing errors. The report from the American Payroll Association confirms it. Overall, it’s a company’s benefit, which enjoys maximum savings on time and resources while minimizing errors. Also, the business gets rid of potential litigation threats and fines.


  1. Enhanced Data Management and Security

Data management is a critical task in back office services. It has a direct impact on productivity. By outsourcing to a reputed partner that is world-recognized for efficient data input, processing, management, enrichment, or analysis, data-driven decisions and strategic planning can be refined. Outsourcing companies use tools like Scraper, government databases for verification, and more, which ensure excellent data management systems with seamless security. Most companies remain transparent by sharing their potential and certifications that authenticate their security and quality management systems.  A report by Accenture states that those who outsource data management tasks experience a 50% improvement in their data accuracy and security. This arrangement certainly increases the productivity of the beneficiary company.


  1. Access to Global Talent Pool

A survey by the Global Outsourcing Association claims that 55% of businesses prefer outsourcing for skilled expertise from around the globe. This is true because outsourcing introduces a company to a niche or domain expert. It can be any company with a certified talent pool. Each has hands-on experience, which the beneficiary company utilizes for a specific duration. Also, the location is not a barrier, which means that one can hire exceptional experts from world-recognized companies. This step certainly benefits by deploying the talent pool, which enhances production and efficiency in one’s back office.


  1. Risk Mitigation

Risk threatens. If we consider the risk in the back office activities, it would be related to continuity. Outsourcing back-office service providers are equipped with tools and technologies for remote connectivity. It helps in handling disruptions skillfully without hampering the work. It’s proven through a report by Deloitte, which highlights that businesses that outsourced back office services witnessed a 20% lower impact on their business operations during the pandemic.


Conclusion

Back office services are pivotal for every business because they impact their revenue, decisions, and productivity. Being a necessity, one cannot ignore it. Many companies hire experts to outsource their backend work or activities so that they can get excellent results, maximize saving, and improve overall productivity.

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