Back-office operations are an essential part of any business despite seeming “invisible” to clients. Their supportive roles enable all other departments to function at optimum productivity. In the age of digital transformation, making the most out of back-office solutions may be the key to driving down costs and adding new value streams to a company.
In this article, we’ll discuss the importance of back-office solutions, the industries that typically have large back-office functions, as well as the different back-office services you can outsource. Let’s take a closer look!
What Are Back-Office Solutions?
Back-office solutions are all the non-client-facing and operation-related functions of a business. These typically include administrative and support roles designed to enable front-office personnel to perform their work seamlessly. Examples of back-office solutions include accounting, data entry, content moderation, and more.
Importance of Back-Office Solutions
The entire company is on track toward optimum performance when back-office operations run smoothly. Back-office solutions are essentially the organization’s backbone, boosting a business’s success and efficiency without driving up costs.
These days, more and more businesses outsource their back-office management to capable providers. The most strategic choices include countries such as the Philippines, where the cost of real estate and labor is more affordable, but they have access to a rich pool of qualified talents.
One real-life example shows how outsourcing back-office solutions can benefit companies: Capita, a digital services and software business, found it challenging to track a customer’s end-to-end experience. They had more than 2,600 customer processes, many of which were fragmented and lacking in transparency and control.
To address these challenges, Capita decided to utilize back-office solutions. Its service provider enabled Capita to optimize the end-to-end customer experience, starting with delivering complete visibility in its back-office operations.
The results of this partnership were astounding, allowing Capita to experience:
- Reduced average end-to-end processing times (from 35 days to three days)
- A 40-point increase in Net Promoter Score or customer satisfaction
- 40% decrease in customer complaints
- 70% decrease in staff attrition
- A shift from 2,663 workflow processes to a more streamlined 250 end-to-end processes
Industries With Large Back-Office Operations
Although businesses across all sectors employ back-office operations, some industries have a greater need for them. Here are just a few of the industries that utilize back-office solutions:
- Financial Services (Banking, Wealth Management, and Investment)
- Insurance (Property and Casualty, Life and Annuities, and Healthcare)
- Business Process Outsourcers (BPOs)
- Government Agencies
- Telecoms and Cable Providers
What Are the Different Types of Back-Office Solutions?
Now that we’ve tackled the importance of back-office solutions, let’s talk about the different services your business can outsource. Back-office operations can include administrative functions, legal functions, customer support roles, or industry-specific services.
Human Resources or HR is one of the essential back-office solutions. This part of the business is responsible for recruiting and screening applicants, resolving workplace conflicts and concerns, and generally serving as the communicators between employees and employers. HR personnel also handle administrative tasks, such as handling payroll and employee benefits and compensation.
Information Technology and Data Management
Information technology and data management personnel are in charge of deploying and maintaining business applications, troubleshooting software, and overseeing data and information security. These back-office solutions can involve administrative duties, technical support and help desk, security, and compliance.
Some back-office solutions include taking on less specialized legal functions, such as transcribing legal documents, performing legal research, doing document reviews, and appointment setting.
Compliance, Fraud, and Risk Management
For some businesses, outsourcing back-office solutions can involve compliance, fraud, and risk management. Compliance is about making sure that your workplace complies with all applicable laws and regulations.
Fraud prevention keeps businesses safe from fraud of all types, such as asset misappropriation and corruption. Risk management, meanwhile, focuses on identifying potential business risks, which can range from financial uncertainty to technological issues, and creating strategies for reducing and addressing these threats.
Procurement refers to the process of purchasing and obtaining goods or services used for business, typically in bulk or on a large scale. The process is one of the most essential back-office solutions because procurement of needed goods and services can determine if the company’s operations can remain efficient and profitable.
Finance and Accounting
Finance and accounting are critical back-office solutions for companies because keeping track of all financial transactions and making the most of your assets can help drive your business to maximum profitability. Proper accounting and financial reporting can help you make calculated business decisions as you explore avenues for growth.
Customer Support Functions
Order fulfillment refers to how a company processes a customer’s sales order based on their given specifications. This back-office function is at the heart of every business, with responsibilities starting from inventory management to the shipping and delivery of the product.
Transaction processing ensures that customer transactions are completed seamlessly and without error. This process may include ensuring that the data and information entered into the system is accurate and complete and processing billing and collections.
In customer support, documentation is critical for accountability, transparency, and the continued improvement of services. Keeping a record of all customer service transactions can allow companies to enhance levels of personalization in their customer experience. By utilizing back-office solutions, businesses can outsource document preparation and record-keeping to a capable provider.
Account maintenance or management focuses on retaining customers and nurturing client relationships. This function involves understanding a client’s needs to develop a long-term strategic partnership beyond the original sale.
Client services involve acting as the main point of contact and communication between a customer and the company. When a company outsources back-office solutions, the right provider will keep customers routinely updated on campaigns and projects to increase the company’s revenue, maintain relationships with current clients, and be responsible for renewing client contracts.
Conflicts within a business or between customers and a company are unavoidable. As such, dispute resolution is an essential part of back-office management. This service is concerned with helping both parties find a resolution that will work for them, whether through mediation, arbitration, or litigation.
Customer onboarding is the process of welcoming new clients to your business, setting the tone for their relationship with your brand and products. From initial sign-up to first use, the customer onboarding process provides value to the client as early as possible, helping improve the likelihood of them doing business with you again.
Industry-Specific Back-Office Functions
Claims Processing and Underwriting
Insurance agencies typically outsource back-office solutions such as claims processing and underwriting to help improve the overall efficiency of their operations. Claims processing involves checking claim requests and assessing their validation and authenticity, while underwriting involves taking financial risks, such as loans or investments, on behalf of an organization.
Loans and Mortgage Operations
Banks and other financial institutions sometimes outsource transactional and administrative functions such as loan and mortgage processing. This back-office operation typically involves assisting clients with loan application forms, collecting required documents, helping them choose loan and mortgage types, and sometimes cross-selling other products and services.
Credit Card Processing
Credit card processing happens when a customer uses their credit card information for payment. The processor will then approve or deny the transaction based on the validity of the credit card information and the sufficiency of funds.
Field Servicing Operations
Field servicing operations are back-office solutions that involve performing work outside of company property. Utility companies take advantage of this outsourcing solution, hiring capable electricians or cable installers, as an example, to service commercial or industrial clients.
Connect With a Reliable Provider of Custom Back-Office Solutions!
Back-office operations are the foundations of your business, helping keep all other departments standing upright. To strengthen your core functions, consider working with a BPO provider specializing in creating custom back-office solutions that work for your specific business type and format. And that’s why SuperStaff is here for you!
At SuperStaff, we offer a variety of back-office services, including but not limited to data entry, accounting, fraud prevention, claim processing, and more. No matter the specific back-office solutions your industry needs, we can get the job done. Reach out today, and let’s talk about how our back-office support can help you rise above the competition!