The Importance of Back Office Operations for all Businesses
Updated: Jan 29
Back office operations are usually run by employees who are not involved with the clients directly. Rather, they support the front office by assisting with various administration tasks.
In conventional days, businesses used to handle back office and front office operations simultaneously with the same employees. Many companies these days have realized that front office employees can be twice as productive if they are supported by a back office.
Besides saving money, back office jobs are also ideal for efficiency. These are the tasks that need to be done accurately and on schedule. Before you think about the importance of back office operations, you have to learn about the type of jobs the back office does.
6 Most Common Back Office Operations
1. Back Office Human Resources (HR)
The HR back office organizes all internal processes related to the organization's workforce. They take care of the hiring process, employee salary, compensation, benefits, etc. HR back office executives also find management issues within the organizations. This implies new rules and regulations to solve the problems.
The back office must also fix the budget for hiring new employees when needed, set the time for onboarding, and introduce them to the company when they arrive.
2. Back Office Data Management
Data management aids business-related decisions by gathering, sorting, processing, and converting data into analytics. Data management mostly involves repetitive tasks.
For example, you have to update the client's database in your CRM. This does not involve any extraordinary skill set. It is not smart to hire a high pay in-house employee for such tasks. You can simply outsource data entry back office operations to handle all data-related responsibilities.
Back office executives ensure the smooth flow of the organization's data and data security.
3. Back Office Market Research
Market research is a part of back office operations. It helps a company learn more about its demographics and customers. Businesses are able to set their target market based on data gathered from market research.
Back office assistants execute market research according to company needs. They do not engage with clients directly for sales purposes rather they collect client information through surveys and other methods.
4. Back Office Accounting and Finance
Back office operations maintain and manage the company accounting records, payroll, finance operations, and reporting. Back office accountants prepare annual reports, balance sheets, invoices, and reconciliations.
Every job in this field entails keeping records related to financial transactions within a company.
5. Back Office IT support
IT support is all about helping technology run smoothly inside your organization. A company’s IT support team provides assistance with computer hardware and software issues. They also provide help with network security, data backup, cloud computing, and other IT services.
Our back office IT support executives optimize network performance preventing the threat of cyber threats. When you have the support of a high-end back office IT support provider, it will protect your digital assets, reduce system downtime and boost your growth ultimately.
6. Back Office Legal Coding
Legal coding is a method of collecting data through coded documents aligned with certain standards. The coding has to be followed by legal requirements. Many legal firms have benefited from outsourcing legal coding back office operations.
The back office executives capture data from the coded documents. Then, they document the data according to the guidelines provided by clients.
The Importance of Back-Office Operations
Let’s be frank, most companies only acknowledge the value of their products and customer experience. They put very little emphasis on back office operations. Customers prefer getting their services from well-functioning companies.
For example, a customer has requested to update his/her user account. You’ve made it easy for customers to reach your support team. But you are delayed in carrying out the customer’s request due to poor back office support. This customer will no longer be satisfied with your company’s service.
You have to put equal effort into both front and back office execution for a larger impact in the long run. Now, let’s discuss the importance of back office operations for different business types.
Three Challenges of Back Office Operations
Back office operations are critical to the overall operations of a business. Companies often face challenges in organizing the functions of the back office, and these challenges include:
Turnaround times refer to the amount of time it takes for a task or process to be completed. In the context of back office operations, "turnaround time" can refer to the amount of time it takes to complete a task such as data entry, bookkeeping, market research, IT support, etc. If the back office is not active enough, turnaround time causes a lot of problems. It may cause data entry errors, standardization of tasks, productive output, and many more things.
Ensuring data security is challenging for many businesses. It’s a practice of protecting sensitive information by ensuring confidentiality and safety. Back office operations of a company deal with a lot of data roaming. Especially in industries like finance, healthcare, and government, insurance companies hold a lot of sensitive data from people outside their organizations. Back office duties and responsibilities include protecting a company from data breaches and coordinating safe data passes.
Automation and Efficiency
Automation refers to the use of technology to streamline internal business operations. Back office automation is a challenge for most companies as it requires a large budget allocation. The goal of back office service centers is to overcome such challenges by integrating software resources, maintaining customer relationships using modern CRM, automating document management, etc.
SMEs Outsourcing Back-Office Operations
Small companies are always prone to expansion. The growth and expansion of your company require strategic investment. Outsourcing back office operations will save a large portion of your budget and improve efficiency.
When you outsource back office operations, you get access to a diverse pool of talent. They can work as a mentor for your business.
You do not have to pay for the software and other resources when you outsource the back office operations. You will get the most up-to-date technologies crucial for your business intelligence.
SMEs have to grow in spite of a lot of competition. Staying competitive is not optional. Outsourcing back office operations will set you free from plenty of non-strategic duties so you can focus on your core competencies.
Large Companies Outsourcing Back-Office Operations
Back-office outsourcing has been proven to be effective for all types of businesses from SMEs to large businesses and conglomerates. Large companies especially need comprehensive back office operations.
Back office outsourcing strengthens a company's scalability by streamlining operations and reducing risks.
It gets easier to enforce next-gen digital solutions without having to invest a lot.
The companies will be able to maintain international operational quality standards like ISO.
There will be more result-driven information pointing to the position of a company’s annual growth and future potential.
Outsourced back-office executives maintain a regular reporting framework. There is no need to motivate or push these employees to perform their best. They are determined to give the best results under minor supervision.
Top Businesses with Examples of Back Office Outsourcing
Let me tell you, you are not the only one planning to outsource back office services. Many companies recognized the importance of back office operations and successfully utilized them.
Let me give you an example of three globally leading companies that outsource parts of their back-office operations.
Google, like many other companies, outsources certain tasks or processes to other organizations. Outsourcing is the practice of contracting with an external company to perform tasks or provide services that would normally be handled by internal employees. Google has virtual employees worldwide. Some of Google’s back office tasks that are outsourced include app development, software development, and consulting with analytical firms. The company mainly outsources to Asia-Pacific regions.
Facebook also outsources back-office support for content moderation. The back office content moderators ensure that the platform is free from offensive contents. These back-office executives are outsourced to companies like Accenture and Cognizant.
American Express (Amex)
American Express outsourced back-office support for customer and IT services. Most of the American Express (Amex) workers are outsourced to India or the Philippines. The company has a very steady number of employees, with headquarters in 40 countries.
FAQs Back Office Operations
1. How Do I Know That I Need to Outsource Back Office Operations?
You need to look for a few voids inside your organization if it lacks quality talent, has less hiring budget, insufficient productivity of internal staff. If these problems exist, then I will recommend you consider outsourcing your back office operations.
2. What is the Difference Between the Front Office and Back Office Operations?
The difference is that the front office works directly with the customers whereas the back office works to facilitate the tasks of the front office. We have already mentioned the common tasks of back office executives.
3. How Can I Monitor the Work of My Back Office Executives?
If you outsource your back office operations from ASL BPO, we have an in-house QA team to monitor and ensure quality outcomes for back office executives. We do not allow our employees to work from home. Thus, the quality of your work will never be compromised.
How to Hire Back Office Operations from ASL BPO
ASL BPO back office service solutions have got your back. We have one-stop solutions for enterprise back office services to ensure your success. Our clients around the world recognize us as the most cost-effective back office operation provider. Contact us and let our executive team guide you further.