Back-office functions are necessary to ensure the smooth functioning of your business. If your company is a vehicle, the back office is the engine that will run it. While your back office team works only in the background, their contribution to the success of your business cannot be ignored.
But, these functions can be time-consuming and may keep you from doing what needs to be done and that is focus on your core activities. Finding an outsourcing provider is a great way to keep back-office functions without overwhelming your in-house team. However, it is important for you to find the right outsourcing partner.
Finding The Right Back Office Outsourcing Provider
Back-office outsourcing is a cost-efficient method for hiring freelancers. There are many outsourcing companies to choose from but finding the right one is crucial in ensuring a worthwhile investment. Here are some tips to consider when looking for a back-office outsourcing provider.
Preparing Your Company For Outsourcing
- Evaluate Your Needs
- Determine Your Scope of Work
- Define Your Project Requirements
- Set Your Budget
Choosing A Back Office Outsourcing Provider
- Check Track Record
- Understanding of the Market
- Flexibility of Services
- Compliance With Security Protocols
- Access To Technology
Preparing Your Company For Outsourcing
Before going about researching for an outsourcing partner, there are some things you need to do on your end. Doing these things can help the provider find the best solution for your needs.
1. Evaluate Your Needs
Before finding a potential outsourcing partner, you first need to assess your business first. What do you need right now and in the future? Identify the strengths and weaknesses of your in-house team if you are augmenting it. List down the skills that you need to stay competitive and anticipate future growth.
On the other hand, if you do not have an in-house team, estimate how many outsourced professionals you will need to complete a project. One of the advantages of outsourcing the back office is that you can get access to a wide talent pool but you first have to identify which talent you will need for your project.
Evaluating your needs can help set expectations with the outsourcing company. Determine what you want to get from the partnership. You can also involve your team or other stakeholders and ask them what they expect from the outsourcing partnership. Make sure that you make it clear with the provider so they will know what steps to take to meet your needs.
2. Determine Your Scope of Work
After evaluating your needs, the next thing you have to do is define your scope of work. You need to know exactly what you want from them. Defining your scope of work gives you a clear roadmap for you and your prospective partner. It is a vital agreement before the actual work starts.
Your scope of work must be as detailed in nature but must be as comprehensive as possible. Any inadequacy would result in problems in the administration of the contract leading to costly contract amendments. Your SOW should comply with the following requirements:
- It should be clear and definitive to erase any uncertainties about the risks involved. At the same time, you do not want it to be restrictive because the outsourcing company may feel that you are inhibiting their abilities,
- The scope of work needs to be precise as it will have an impact on the contract administration. Any work not included in the scope will be considered as new procurement and will come with increased costs.
- Finally, the scope of work needs to be complete. It should specify all the tasks within that scope. It should cover the following points:
- What needs to be done?
- Who is responsible?
- When should it be done?
- How will performance be judged?
With the scope of work, it is important to keep the facts and most important information understandable. The scope of work will help you pitch the need and scope of your projects to your service provider
3. Define Your Project Requirements
Defining your project requirements will not be easy if you do not have a partner to help with the planning. At the very least you should know your products, target market, and the price range it will be. If possible, you should also determine how it will break even.
With an outsourcing provider, you will be informed if you have unrealistic expectations. Make sure to inform your potential partner about it. This will allow your partner to determine the extent of your concept and give you a more accurate estimate.
Poorly defined project requirements are often the cause of failure of the outsourcing partnership. As the provider may be working from another time zone, you won’t have time to make quick clarifications, decision-making or changes that you can easily make if your partner was in the same location or in close proximity to you. That is why it is important for the project requirement to be clear at the onset.
4. Set Your Budget
Outsourcing is not as expensive as you think it is. In fact, it is a low-cost option. Even with a minimal budget, you can get started with outsourcing. Here are some tips on how you can outsource back office functions on a budget:
- Start with the most important thing. It’s okay to be hands on at first but as you get loaded with more tasks it can become overwhelming for your team. Look at your business and see which area you need most help. From this, you will know what kind of team member you will need.
- Start small. One of the reasons you may be having second thoughts is because you have the notion that outsourcing will cost you. Your best option is to start small. There are many areas where you can start small without costing you an arm and leg.
- Outsource tasks that have a direct impact on your bottom line. These tasks are usually time-consuming and can easily have a huge impact on your bottom line. For example, uploading client work on WordPress and doing SEO research. You can easily outsource these tasks and make more money in the process.
Choosing A Back Office Outsourcing Provider
Okay, you have done your homework about your own business, now it’s time to search for your potential provider. There are many outsourcing providers to choose from but how do you know which is the right one for you?
1. Check Track Record
You would want to work with an outsourcing company that is trusted by other businesses. An outsourcing company with a good track record will never compromise the quality of their services. Their track record in the industry will speak something about the quality of service they can provide. Check with their previous clients about their experience with the provider. In today’s digital age, you can easily check for bad reviews about the company. Look for a provider who can deliver on their promises. You do not want a partner who will disappear in the middle of a project.
Customer satisfaction is important when looking for a potential outsourcing partner. If there is a page dedicated to customer testimonials, check it out. It will give you an idea that the customer has a track record of satisfying its customers. Over three-quarters of customers place as much importance on the experience they get as much as its products or services.
Their track record in the industry can be a gauge of their level of expertise and professionalism. Look for a record of good TAT as this means that they have an impeccable record of producing services with perfect accuracy and quality in the projects they handle.
2. Understanding of the Market
When searching for an outsourcing provider, make sure that they have enough experience in your specific business or market. They know how to analyze the competition and identify opportunities for growth. More importantly, they will treat your customers as their customers. To fully understand your market, your potential partner should know your target market.
The provider will conduct market and customer research so they will know the right solution to offer you so you can better serve your customers. Armed with the data and insights about the market, they will know the best strategy to help you attract more customers and grow your business.
Understanding the market is very important because it will help you adapt to the changes in your market. They will also know what your competitors are doing, what strategies are working for them, and make the necessary changes to your marketing strategy to make your business competitive.
3. Flexibility of Services
One of the things you should consider when looking for an outsourcing provider is the range and diversity of services they offer. Some providers only handle certain tasks and you may end up paying more than what you can afford. Hiring a provider with diverse service offerings gives you access to a large pool of talents and resources which comes in handy should you decide to scale your business.
Choosing a provider with diverse services allows you to discover opportunities that you can explore in the future. For example, you hired a provider to do some accounting functions for you but found out that they also do data entry services. You do not only leverage the talent pool but also the data they will be able to collect throughout your partnership.
In addition, look for an outsourcing provider that can customize their solutions to suit your needs. They can send you the resources and labor that you need at a much lower cost. They can save you time so you can focus on your core tasks while the provider works on the back office functions. There are various benefits that can be derived from working with a provider that offers various services.
4. Compliance With Security Protocols
Compliance with security protocols is very important especially if your business is handling a huge amount of customer data. This is important because business policy dictates that you should not share sensitive and confidential customer information. On your end, check your in-house security policy. Make sure that every stakeholder, manager, or employee makes data security their utmost priority.
A good outsourcing provider is well aware of the security standards set forth by regulators and certification organizations so they will guide you on how to be security compliant. Once you agree with the partnership and turn over customer data to a third party, you are making your organization vulnerable to cyber attacks.
Aside from personal data, you also need to protect other sensitive data such as credit card numbers, IP addresses, and social security numbers, to name just a few. You want to work with a provider that will effectively protect this data. Compliance and security goes hand in hand and should never be separated.
5. Access To Technology
Another important consideration when looking to outsource back office functions is the technical capacity of the provider. In today’s digital age, it is important to partner with a provider that has the technical competence to handle complex projects. The outsourcing provider can help bridge the gap between access to information and documents.
By choosing a technologically competent provider, your in-house team can leverage the technical tools they need anytime from anywhere. It will also be to your advantage if the provider you are working with has access to cloud computing services so that your team can access their files from a remote location.
Working with a provider with access to the latest technology can help attract customers. Although technology can never substitute human interaction, it can make the customer experience easier and more efficient. Also, it can pave the way for customers to engage with businesses from their desired platforms.
At the onset, it is okay to have your in-house team work on the back-office functions. However, as your business grows, it may become overwhelming for your in-house staff to handle additional tasks. This is another benefit that you can derive from outsourcing these functions. As your business grows, the provider scales with you.
When your business grows, your team may no longer be able to keep up with the increase in the amount of their work. Choose a provider that will commit its full resources and manpower to your growth. Work with a company that is willing to work towards a long-term and mutually beneficial relationship.
Don’t settle for a company that solely handles small clients and has never experienced growing a business. It may lead to instability in handling your account. Check what kind of growth they have handled in the past and assess their capacity to handle your future needs.
Choosing the right provider can be a daunting task given the plethora of providers to choose from. Do some research and take your time in finding the right candidate. After all, it will save you time and money.
Outsource Your Back Office 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 on working “on” your business instead of working “in” your business. That’s where airisX comes in. Get in touch with us at email@example.com to get a customized solution for your needs.