10 Benefits of Outsourcing Back Office Duties for SMBs
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10 Benefits of Outsourcing Back Office Duties for SMBs
While outsourcing back office duties have been in vogue for a long time, and this probably was how the outsourcing era began in the early 1990s, things have changed a lot now. Outsourcing back office functions is now a necessity even for smaller businesses. What started as a privilege that only larger enterprises could afford, the availability of a variety of offshoring admin teams in countries such as India has helped many SMBs to meet small business back office requirements. Choosing to outsource admin support has helped businesses to cut costs and focus on core business activities. In this article, let us take a look at 10 of the most important benefits that SMBs derive from outsourcing back office duties.
1. Reduce costs
While this is a no-brainer, one of the biggest advantages of outsourcing is, it helps reduce costs – all kinds of costs. Firstly, it helps you reduce your operational expenditure. Secondly, it helps reduce staff expenditure as well. Usually, a business has to spend a lot of its operational budget on overheads, infrastructure, skilled labor, etc. All this can be reduced when back office duties are outsourced to an offshore back office team. Training staff to take up ad-hoc projects is a waste of valuable resources, and can significantly affect staff expenditure. Outsourcing ad-hoc back-office projects to an external team help save a lot of money.
A florist in Nevada could no longer afford to hire his receptionist, who also ensured deliveries were processed quickly. Outsourcing his delivery processing and customer care to an agency in India, the florist could quickly scale his business, and hire his receptionist back after 6 months, who was found to be without a job even after several months, owing to the economic crisis in the USA.
This Deloitte survey found that more than 59% of companies interviewed used outsourcing as a primary cost-cutting tool.
2. Focus on core business activities
Admin support offshoring ensures that smaller businesses can focus on growing their fledgling business by delegating non-core functions to an offshore back office team. Not only does this cut costs, but also helps save time and make available valuable resources that can be invested in focusing on core competencies.
A supermarket based in New York just couldn’t find the time to improve its shopping experience, because its employees were busy handling the ERP, and making sure inventories were cleared and replenished. Outsourcing back office functions helped the supermarket to focus on making shopping memorable for its customers by sprucing up interiors, training staff, and making aisles accessible.
This article lists advantages of outsourcing back office functions to an external vendor.
3. Gain access to specialized talent
Back office outsourcing companies specialize in providing admin support to small businesses that do not want to have an in-house admin support team. Such an offshore back office team will have specialized talent when it comes to admin functions, which a small or medium-sized business may not have. It is also not necessary to maintain a full-fledged in-house team of talented back office professionals when they can be hired on demand. In other words, hiring specialized talent had never been this easy.
No matter how hard they tried, a small software agency in Boca Raton, Florida, could not find a Ruby specialist within their budget to fix a buggy website. Hiring someone full time was out of the question, especially for a project that lasted hardly 2 weeks. Their solution came in the form of an offshore agency in Gujarat, India.
This article explains the talent crunch that the world is experiencing now.
4. Gain access to expensive infrastructure
Admin support is more about cloud infrastructure, servers, and expensive infrastructure more than anything else. It is not possible for companies to provide excellent business services without having access to storage or server facilities on a 24/7 basis. It is also not possible for every business to be able to make such infrastructural investments. Back office outsourcing companies provide access to expensive infrastructure, which smaller companies simply cannot afford.
Take a look at how much the world is set to spend by 2026 on infrastructure services.
5. Market better across various platforms
SMBs often sacrifice crucial marketing campaigns simply because they do not have an adequate budget to invest in a sales or marketing strategy. They often ignore important brand building exercises, settle down with cheap or sub-standard logo and stationery, and often spend less on web development, resulting in a less-than-professional image. Outsourcing back office functions help reduce operational costs which can be invested in brand-building and marketing.
Sally, who offers Spanish language courses to children, didn’t have a uniform brand across channels. She risked appearing like a novice. Getting her stationary designed offshore and making sure that all branding was uniform, she saw her business boost immediately.
Take a look at the pros and cons of outsourcing your own brand.
6. Increase ad spend
Money that is saved with the help of outsourcing should be spent very wisely. Advertising is one of the most important methods to generate leads and gain new clients and customers. By choosing to outsource admin support, SMBs reduce overhead costs and operational expenditure, which can be diverted towards ad spend. After all, PPC and digital advertising are known to bring in large amounts of business to small businesses.
Take a look at the American advertising expenditure (ad spend) until 2021.
7. Reduce risks
An important advantage of outsourcing to an offshore back office team is that you will be able to mitigate risks and sometimes even share those risks with your offshore teams. Server downtime, delays in completion of projects, and other risks can be avoided when you outsource back-office functions to an offshore team. Risk mitigation is one of the primary benefits of outsourcing, and that’s a benefit that no SMB can choose to ignore.
Worried about the risks of outsourcing, rather than how it reduces your overall risks? Take a look at this presentation.
8. Enhance scalability of business
Smaller businesses often have difficulties in completing projects, even if their business is doing well. When non-core functions are outsourced to an offshore back office team, a business can easily focus on scaling their projects and completing them in time. This helps in growing their business further, instead of feeling limited by their capacities and capabilities. Several businesses often cite scalability as the primary reason why they outsource admin tasks to offshore teams.
Learn how to leverage outsourcing to scale your company.
9. Flexible business models
Back office outsourcing companies offer flexible business models to suit every small business requirement. You can choose to have a dedicated team working at your disposal, or work on a subscription model. You can also choose to customize how you want the relationship with your offshore team to be. Flexibility is one of the biggest advantages of modern outsourcing, and smaller businesses are not looking back anymore.
This article lists 7 back office outsourcing advantages.
10. Grow your business quickly
Small businesses often do not have the resources or the talent to engage in multiple business processes. Whether it is about accounting, doing research, or simply attending to customer support, smaller businesses simply do not have the luxury to do too many things at once. When they try to do everything themselves, they run the risk of spreading themselves too thin and not focusing on their core functions. Outsourcing helps small businesses to focus on their core business functions and invest in marketing so that they can quickly scale and grow.
Here is an article that accurately shows you how back-office outsourcing can help you grow your small business.
Surviving competition and thriving in a fierce market
There are a number of advantages of outsourcing, and most small business back office requirements can easily be outsourced affordably and sustainably. As we hurtle towards a brave new world where competition is fierce, gaining an edge over others by focusing on core business functions can be achieved only via outsourcing.