Many companies today are realizing that with growing competition, continuous technological innovations and constantly developing products and services, it is essential to make sure that your operations are productive and cost effective. Unfortunately many companies are also maintaining most of their support processes, which take resources and time away from critical business operations.

Back office outsourcing not only manages outsourced processes, but also re-engineers and refines them improving the processes by working closely with clients to create customized solutions that fit their unique business requirements. As a result, clients receive significant cost savings as well as quality improvements and saving in time - all with the flexibility demanded by the fast paced competition in markets today.

Some of the business processes, which are given for back office outsourcing, are:

Accounting Outsourcing Services
Financial Aid Services for Post-Secondary Education
Human Resources Outsourcing (HRO) Services
Information Technology (IT) Outsourcing Services

Back office outsourcing offers world-class services specialized in back office and business process outsourcing solutions guaranteed to cut costs and improve quality. It can save up to 50-60% compared with domestic costs, dramatically shortened delivery times and strictly maintained quality standards.

For back office outsourcing the extent of services varies from simple queries such as account details, maintenance, bought services, and product information to complex procedures and infrastructure designed to handle inbound sales calls. This in turn helps generate significant growth for the clients. Outsourcing back office operations optimizes all different kinds of customer care interactions related to revenue generation. This is achieved through reduced costs per contact while maintaining or even exceeding current quality levels.

Some of the main functions of back office outsourcing include resolving complaints and enquiries, managing orders, taking care of billing queries, providing product information support and managing loyalty programs.

There are several advantages of outsourcing:

• Concentration on core business areas

Back office operations of a company require high maintenance and specialized attention. Yet most of them are critical for the company's everyday activities. By outsourcing their back office operations businesses can concentrate on their core competencies while a specialized third party company is managing their back office operations smoothly.

• World-class technology at lower rates

Investing in new technology is very costly and often risky. As the technology market develops rapidly, it is difficult to keep up with latest innovations and solutions. Thus outsourcing to companies that have the resources, expertise and desire to continuously update their technological solutions, offers a true advantage of outsourcing.

• Skilled manpower at affordable prices

Outsourcing gives a company the ability to get access to skilled and trained man power at extremely low rates. This in turn leads to an increase in productivity as well as cost savings. By outsourcing a company saves on recruitment, training and other human resource costs it would otherwise have to maintain internally. Also an advantage of outsourcing is that a company is able to utilize the kind of expertise it could not internally provide.

• Increased productivity

By employing skilled manpower in larger numbers at lower costs companies can really increase their productivity. This in turn would result in better customer satisfaction and increased profitability.

• Beat Competition

In today's fast paced global economy a company needs to provide high-quality services to its customers in order to retain them, as well as provide the services for cheap prices. Outsourcing in this case can help the company maintain lower rates with better service solutions, thereby giving them a better market position or even a competitive advantage.

• Tax benefits

By selecting the right BPO destination companies can save up on taxes in turn saving on costs

Disadvantages of Outsourcing

Although there are several reasons in favor of outsourcing, a company must also consider the disadvantages of outsourcing. There are risks that need to be analyzed whenever a company embarks on a new business venture. Several benefits and value addition have to be realized in order for companies justify outsourcing.
The disadvantages of outsourcing may include the following:

• Loss of managerial control, it is more difficult to manage outside service providers than managing one's own employees working possibly in the same building.
• Often the hidden costs are difficult to calculate or prepare for. These include legal costs related to putting together a contract between two companies and the time spent to coordinating the contract.
• Another disadvantage of outsourcing can be a threat to security and confidentiality. If your company is outsourcing processes like payroll, medical transcriptions or other confidential information, a company must be very careful in choosing which process it wants to outsource and to which provider.
• A possible loss of flexibility in reacting to changing business conditions, lack of internal and external customer focus and sharing cost savings may also be a disadvantage of outsourcing.
• Other disadvantages of outsourcing may include unfavorable contract lengths, loss of competitive edge, problems in contract renewal, and contractual misunderstandings.

The Outsourcing market is estimated to grow tremendously with an increasing number of companies planning to outsource both low end and high-end jobs to offshore destinations. Also the number of companies providing outsourcing services is on the rise, thus resulting in larger variety.

In the next issue, we shall look into the various job sectors, which have BPO's.

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