Outsourcing back office support can free your staff from doing repetitive tasks to focus on their core functions. Menial tasks like data entry or administrative functions can hinder the growth of your business and your team. Back Office tasks can waste valuable time, veering them away from what your staff should be doing. This is where back office outsourcing can come in handy.
In your search for an outsourcing partner, you are bound to make mistakes that could lead to the failure of the partnership. These mistakes could hamper the desired results. When done right, outsourcing can deliver huge savings and improve your business efficiency. Here are the 10 mistakes you need to avoid when outsourcing back office support,
10 Common Mistakes When Outsourcing Back Office
- Not Knowing What To Outsource
- Outsourcing Everything
- Not Clearly Defining Expectations
- Not Training The Outsourced Team
- Not Prioritizing Security
- Rushing The Hiring Process
- Outsourcing The Wrong Function
- Not Understanding The Contract
- Not Providing Proper Guidance
- Thinking That Outsourcing Is A Quick Fix
10 Common Mistakes When Outsourcing Back Office
Outsourcing back office is not as easy as you think it is. It is not enough that you find a provider and pass on the task to them. Although it has a wide range of benefits, making costly mistakes can greatly impact your organization. Here are 10 mistakes you need to avoid when outsourcing back office.
1. Not Knowing What To Outsource
Sometimes businesses make the mistake of outsourcing for the wrong reasons. They get into outsourcing without fully understanding how it will affect their business. Their primary reason is to cut costs and have less management of tasks. They do not have an idea of what aspect of their business they will outsource.
By outsourcing without knowing your needs, you will be wasting time, money, and effort. Start by identifying the hard tasks for you and your team. Also, you might want to track the time you are working on particular tasks or projects. You or your staff may have the qualification but if it is consuming your time, it might be better to outsource them. In the end, your business might suffer and you could lose revenue and potential customers.
There are certain things to be considered when identifying what tasks can be outsourced and what cannot. Conduct a review of the process when determining what to outsource. Consider the level of difficulty in doing tasks and their turnaround time.
2. Outsourcing Everything
If outsourcing without knowing what to outsource is bad, outsourcing everything is just as bad. You see there are tasks that are best left in-house and should not be outsourced at all cost. For example, there are core processes that are best handled by your in-house staff. Avoid being “outsourcing-happy” and outsource everything that comes to your table.
As much as possible, avoid outsourcing your core competence. It may put your company at an even greater risk of losing control over the entire project. For one, they may have the right expertise to set your company in the right direction. Do not outsource tasks that require communication with customers as you already have an understanding of what they need which your outsourcing partner may not understand.
Surely outsourcing everything will make your day easier but it isn’t really a good idea. Think carefully when outsourcing. If it would end up to the detriment of your organization, you might as well not do it. Don’t outsource tasks because they are an inconvenience to you.
3. Not Clearly Defining Expectations
Another huge mistake you can make when outsourcing back support is not clearly defining expectations. This can result in productivity issues and inefficiencies and in the process affect your team’s overall performance. In order for the provider to deliver the best solution, you need to provide them with the best details.
Discuss expected quality, deadlines, communication methods, processes, and tracking methods. This will help you define the scope of work the outsourced company will provide. Identify what is expected of them, the required tasks for the project, the deadline for delivery of outputs, and others.
By setting and clarifying your expectations and objectives, you can easily communicate specific instructions with your remote team and evaluate whether or not the outsourced team is meeting your expectations.
4. Not Training The Outsourced Team
Another costly mistake you need to avoid when outsourcing back office is not training the outsourced team. Providing them with the necessary training will help your company reach its business goals. While they may already have the required skill for the role they will fill, you still need to train them regarding your processes. This will help you get your desired results from the outsourced team.
You need to teach your outsourced team your corporate culture. This will help ensure that they will be on the same page as you are. For the provider to work harmoniously with you, you need to make them see and believe in your company goals. They may be experts at what they do but nobody knows your business better than you do.
Training your outsourced team will help them see the bigger picture and see where their services will fit. It will help ensure alignment between how they execute tasks and the type of output you expect. This way you can avoid delays and mistakes which could result in costly overruns and lost profits.
5. Not Prioritizing Security
One of the most important concerns you may have when outsourcing is the confidentiality of your customer data. When outsourcing, you will be handing over some sensitive information to the third-party provider. Protecting customer information is a standard protocol of any company. Data breaches and leakage of confidential information can seriously impact your company, leading to revenue loss, operational disruption, regulatory sanctions, damaged reputation, and others.
According to Ponemon Institute and IBM’s Cost of a Data Breach Report 2021, the total average cost of a data breach increased from $3.86 million to $4.24 million that year. When looking for an outsourcing provider for back office support, you need to know how often and for how long your financial information will be backed up. In addition, find out if they have a security protocol and process for protecting client information.
As your potential business partner, the outsourcing provider should have the security of customer information at the top of their mind. Make sure that you will partner with reputable companies or else risk losing your customer. Employ vigilance when protecting confidential files and make sure that the outsourcing firm you are considering values data security and handles potential risks.
6. Rushing the Hiring Process
It is okay to have a sense of urgency in hiring an outsourcing agency to ensure a smooth flow of your business processes. But rushing the hiring process may not yield your desired results. Don’t be tempted to hire the first provider that you were able to talk to for the sake of being able to get started with outsourcing. There are many outsourcing providers out there but you need to take your time in hiring the outsourcing provider you will work with.
Maybe you are too eager to offload work to an outsourcing partner without first understanding the process and doing your research about your target outsourcing partner. Rushing the hiring process could prove disastrous so take it slow before offloading work to a third party. Outsourcing requires a lot of planning and rushing the process may lead you to choosing the wrong company.
Choosing the right provider for your back office support is important because you are going to invest a lot of money in it. Look for a provider that has the experience, expertise, and right technology to offer the right solution for your needs. Always stick to your goals and priorities and choose a partner that suits your budget and needs.
7. Outsourcing The Wrong Function
Outsourcing the wrong function to a third-party provider is one of the biggest blunders you can make. Never outsource your core functions because this is where you are strongest. Surely you wouldn’t share your strengths with a different entity. Your core tasks help you generate revenue and meet customer needs in terms of products or services.
Businesses should outsource only the non-essential services. Outsourcing the wrong functions will result in communication, execution, and strategy-related problems. Aside from that, it will also negatively affect customer relationships due to changes in quality and may even result in sensitive data being leaked to unauthorized persons.
As much as possible, keep the essential functions in-house to maintain control over them. This way, you can keep your business running smoothly. You should always know which business functions should be outsourced and which ones should stay in-house. Back office functions that involve contact with customers are vital to your business and should stay in-house.
8. Not Understanding The Contract
This is another crucial mistake that you can make when outsourcing back office support. Before everything else, read the fine print of your contract. It should provide you with a clear definition of your responsibilities, expectations, and rights. It should explicitly state that you will be responsible for paying only for the services indicated in the contract.
In addition, the contract should provide a clear scope of the functions of your outsourced team and what you expect from them. It should be clear and precise to prevent any management and technical issues that may arise in the future. Also, this will prevent ambiguities and confusion about who’s responsible for what.
Understanding the contract is important to ensure that there will be no loopholes in your partnership with the outsourcing firm. From the contract alone, you will know whether your prospective outsourcing firm is reliable and trustworthy or if you need to move on and look for another possible partner.
9. Not Providing Proper Guidance
Outsourcing gives you access to experienced professionals with technical skills that will help you get work done. However, you cannot just delegate the work without explaining what needs to be done, your expectations, and the goals you want to achieve. Create guidelines, procedures, and rules and put them in black and white.
Provide the offshore team with an operational guide or manual explaining your standard operating procedures. Proper guidance will help your outsourced team get up to speed and provide them with the tools to make a quick and lasting impact on your business. They should fully understand the process for them to succeed in your partnership.
Always remember that your outsourcing team is not aware of your target and business processes. Set up a knowledge base that your outsourced team can use to learn procedures and processes. You can also conduct face-to-face or Zoom training sessions with your outsourced team.
10. Thinking That Outsourcing Is A Quick Fix
One of the biggest mistakes you can make when outsourcing back office tasks is thinking of it as a quick fix. Outsourcing is not a short-term process but should be integrated as a short-term process. In fact, many businesses make outsourcing a permanent part of their organization. Quality should never be compromised for the sake of affordability. Think of the outsourcing provider as your business partner in your growth.
Outsourcing is not a magic bullet. It requires a strategic plan that should be incorporated into your company’s long-term strategy to ensure that your organization can effectively and fully achieve business goals. Depending on your business needs, you can outsource back office support on a short or long-term basis. However, the latter will deliver more benefits to your organization.
By developing a long-term partnership with your provider, you give them an opportunity to get to know more about your company’s structure, needs, and strategies. This will result in more accurate business solutions.
Outsourcing back office support offers a wide range of benefits when done right. However, it can also impact your organization if you commit the 10 outsourcing mistakes mentioned above.
Outsource Your Back Office Support Needs with airisX
As an entrepreneur, it’s understandable to want to be hands-on with the management of your business. But as companies grow, many business owners find themselves overloaded with the non-core “hands on” tasks that distract them from the core business activities that actually grow their business.
Outsourcing time consuming administrative and backend tasks such as data entry, cold calling, bookkeeping, HR, recruiting, etc. can save you time (and money!) during your day, so you can focus working “on” your business instead of working “in” your business. That’s where airisX comes in. Book a call with us at email@example.com and we will get back to you with a solution that suits your needs.