Fully Managed Back-Office Outsourcing: Services, Process & What to Expect
Many businesses decide to outsource when back office work is taking up excessive time, however hiring more staff isn’t always enough. A fully-managed back office model should include clearly clear processes, trained teams, quality control technologically-enabled workflows, performance monitoring and scalability, security and continual monitoring. The service provider must be accountable for ensuring that the work is kept moving and ensuring that the service is in line with agreed standards, not just offering remote employees. The key difference between outsourcing tasks and outsourcing a managed task is the responsibility of the process.
What Is Fully Managed Back-Office Outsourcing?
A fully managed back office outsourcing means transferring the responsibility for certain operational processes to a third party service provider who manages the personnel working, workflow, quality and reporting that are associated with these processes.
In a traditional outsourcing contract, the client usually oversees the employees who are outsourced. They assign work to them, oversee daily activities, and are accountable for the performance of the process.
When you use managed back office services, the service provider assumes greater responsibility. This may include process setting as well as team management Standard operating procedures, monitoring of quality, reporting monitoring of performance and escalation management.
A managed back-office BPO partner will handle the repetitive tasks of operation while internal employees concentrate on their customers, revenue-generating tasks and the core business tasks.
For companies looking to outsource back office services, the primary question must be: Are we just adding more people or are we actually transferring responsibility for a particular process?
What Back-Office Services Can Be Fully Managed?
A back-office team that is fully managed can provide support for a variety of operational and administrative tasks. The appropriate scope will depend on the nature of your business, the volume of transactions and workflow needs.
Data Entry & Data Management
The work related to data is usually repetitive, but it still requires precision and coherence. Back-office staff can handle:
- Entry of data and capture
- Data extraction
- Updates to databases
- Management of data
- Validation of the data
- Maintenance of records
- Verification of information
Outsourcing data entry and repetitive virtual assistant tasks can be particularly beneficial for internal employees who spend a lot of time maintaining records, instead of focusing on more valuable duties.
Transaction, Billing & Invoice Processing
Operations and financial transactions may be handled by an outsourcing team, following specific procedures and quality checks.
Services can include:
- Processing transactions
- Billing support
- Invoice processing
- Invoicing
- Processing of purchase orders
- Administration of payments
- Reconciliation support
To help businesses grow, the outsourcing of transaction processing or invoice processing outsourcing could aid in handling higher volumes, without constantly increasing the administrative staff within your company.
Document & Application Processing
Companies that handle large quantities of documents may outsource a number of the processes that are involved in arranging and processing data.
These can include:
- Document digitization
- Indexing documents
- Document classification
- Archiving
- Processing of applications
- OCR-based data capture
- Document confirmation
Outsourcing processing of documents is a good option in situations where employees are spending a significant amount of time sorting, indexing and maintaining data across various systems.
E-commerce Back-Office Support
The companies that sell online have their own administrative procedures that can be handled by an external back-office team.
Support can comprise:
- Product catalog management
- Product data administration
- Processing of orders
- Administration of the inventory
- Support for invoices and billing
- Updates to customer records
- Back-office support for retail and e-commerce
E-commerce back-office outsourcing enables businesses online to delegate routine operations to their in-house teams, while they focus on selling, merchandising, customer service and expansion.
What Does a Fully Managed Back-Office Process Look Like?
This back office outsourcing process should be designed around the job being transferred, not about the number of employees that are assigned to it.
Step 1: Process Assessment
The service provider evaluates the tasks required, transaction volume and complexity, the existing procedures, systems and anticipated turnaround times.
Step 2: Workflow Setup
SOPs Access requirements, SOPs, approval processes, escalation procedures, time frames, turnaround times and reporting requirements are all documented.
Step 3: Team Assignment
The trained resources are assigned in accordance with the requirements of the process. Based on the business and workload requirements, this could involve the use of a shared or dedicated team.
Step 4: Quality & Performance Management
The work is inspected by a set of quality standards that are agreed upon and targets, such as SLAs and KPIs. Review reviews can include checks for accuracy along with error tracking, efficiency monitoring, and measurement of turnaround time.
Step 5: Reporting & Process Review
The service provider provides performance reports to the client and then reviews frequent issues, work load changes and ways to enhance the workflow.
This is the difference that separates controlled back office operations outsourcing from hiring remote workers. The service provider is accountable for the entire operation not only the employees doing their individual jobs.
What Should Businesses Expect From a Managed BPO Partner?
When you choose the right back office outsourcing provider means you can be prepared for more than just a team who work from a different location. A well-managed agreement should be clear about the specified function.
Dedicated Process Management
Someone should be accountable for coordinating the work flow, resolving any issues as well as managing priorities and making sure the process stays in order.
Consistent Quality Control
Quality should be integrated into the process by reviewing such as error tracking samples, feedback, and corrective actions.
Defined SLAs and KPIs
Companies should be aware of what metrics will be used to measure performance. The most common metrics are:
- Accuracy
- Time to turn around
- Processing volume
- Error rate
- Productivity
- SLA conformity
These measures help to determine if the function that is outsourced is providing the quality of service that is expected.
Data Security
Security is particularly important when outsourcing teams manage healthcare, insurance, financial or customer data.
Companies should inquire of prospective service providers regarding their security measures and access management policies, data handling practices and any relevant certifications.
WeSageBPM is ISO/IEC 27001:2022 certified, which is an established security standard for information which businesses should consider when looking at a back-office partner.
Scalability
The workload is rarely constant. An increase in transactions during the season and acquisitions, new business or rapid growth may cause additional demand for operational services.
A managed service provider should be able to adapt team capacity to the business needs of the client rather than forcing clients to constantly find and train employees.
Business Continuity
The continuity of operations should not rely on one employee. Managed services should be documented with procedures, coverage for the team information sharing, backup plans so that work can continue even when there is a shortage of staff.
How Much Does Fully Managed Back-Office Outsourcing Cost?
There isn’t one back office outsourcing cost because pricing is heavily influenced by the service model and process.
Factors that impact pricing include:
- Complexity of the process
- Transaction volume
- The number of FTEs needed
- Coverage and working hours
- Teams that are dedicated versus shared
- Technology requirements
- Reporting rules
- Industry & need of specification
- Time-to-turnaround requirements
- Management and quality expectations
This is the reason why comparing providers solely based on hourly rates may give a misleading conclusion.
Better comparisons focus on the cost per process and quality, management and the ability to scale and continuity.
For instance, a lower hourly cost may not be the most effective commercial choice if it needs extensive supervision of the client side, causes more mistakes, or offers only a limited amount of reporting. The most appropriate model should be evaluated in relation to the overall operational requirement.
Which Businesses Benefit Most From Managed Back-Office Outsourcing?
Back-office management services that are managed can be used across different industries, and particularly in areas where companies are able to replicate processes and have an increasing workload of administrative tasks.
Accounting Firms
Bookkeeping services, transaction processing, and specialized insurance accounting outsourcing can be delegated to third parties, allowing internal employees more time to focus on strategic client advisory services.
Insurance Businesses
IInsurance brokers, agencies, MGAs, and carriers can outsource policy management, documentation, claims support, and administrative operations through specialized insurance bpo services. WeSage BPM has a specific specialization in the back-office of insurance and assists insurance companies by providing process-oriented solutions.
E-commerce Businesses
Online retailers are able to outsource catalog administration order-related processing invoicing, bookkeeping, and other routine operational tasks.
Healthcare Businesses
Healthcare companies can employ outsourcing teams to handle appropriate back-office and administrative procedures that adhere to defined guidelines and security standards.
Vacation Rental Companies
Vacation rental companies may delegate guest-related operational and administrative operations, which includes back-office support related to the property and reservation processes.
AI and Technology Businesses
Technology companies have the option of outsourcing data labeling as well as other data processing operations which require skilled teams to follow standardized guidelines.
When Should You Consider Fully Managed Back-Office Outsourcing?
You might want to think about a model for a managed back-office when:
- Backlogs are growing
- Internal employees are spending too much time doing repetitive tasks.
- The cost of hiring is increasing or it’s difficult
- Processing errors are on the rise.
- The volume of business is increasing faster than your team.
- Managers tend to spend too much time overseeing the administrative tasks
- You require additional capacity, but without the need to build a bigger department within your own
The best moment to outsource isn’t always when the load becomes overwhelming. It could also happen when routine work begins taking employees away from tasks that require their expertise the most.
How to Choose a Fully Managed Back-Office Outsourcing Provider
The best back office outsourcing company requires considering more than just headcount and price. Before you sign an agreement, be sure that the service provider will actually be responsible for the outsourcing process.
Make use of this checklist:
- Experience in the relevant industry Does the company understand the business requirements and processes of your company?
- A clear service’s scope of work: Is the responsibilities including exclusions, deliverables and responsibilities clearly defined?
- Definition of SLAs and KPIs Can performance be assessed by a set of measures?
- Quality assurance processes Does the service provider have quality assurance procedures documented?
- Certifications of security for data Does the service provider meet adequate security standards?
- Technology compatibility: Can your team collaborate with your current systems and applications?
- A dedicated management team Does there have to be a responsible manager in charge?
- Scalability: Will the capacity of your team be altered as the workload of your team changes?
- Business continuity: Do you have procedures for backup and team coverage arrangements?
- Transparent reporting. Do you get regular reports on work and performance?
WeSage BPM brings together back-office operations, skilled teams as well as process management and workflows that are technology-driven. The company is ISO/IEC 27001 certified and provides support to businesses in different areas like insurance, accounting and e-commerce, customer service data labeling, and administrative functions.
If you are a business looking to find a back office outsourcing provider, the aim should not only be to shift work from the company. It is important to establish an efficient process with clearly defined ownership, quantifiable performance, and reliable operational support.
Frequently Asked Questions
What is Outsourcing a Fully Managed Back Office?
Full-time back office outsourcing can be described as a service model where an outside provider is accountable for a business process that has been agreed upon that includes team management, workflows monitoring of performance, quality control and the day-to-day execution.
What are the services that can be contracted out to a back-office team?
Common services include the entry of data, data management transactions, processing of transactions, invoice processing, billing applications processing managing catalogs, ordering management and other operational tasks that are recurring.
What’s the distinction between staff expansion?
With the addition of staff The client typically oversees the employees and assigns their tasks directly. Managed outsourcing means that the provider is accountable for the agreed-upon process and team, workflow, efficiency and quality.
How much does back-office outsourcing cost?
The cost is based on the complexity of the process and workload, the size of the team working hours, the technological requirements, the model of service and reporting requirements. It is important to compare the total cost for controlling the procedure, and not only the cost per hour of service.
Final Thoughts
A fully managed back office outsourcing is about more than simply adding another couple of people to work with. If properly structured it can provide businesses with an operational model that is specifically designed for routine procedures, with clearly specific responsibilities, quality control as well as performance indicators and supervision of management.
The most important thing to ask a potential back office outsourcing company is straightforward: What portion of the process do you be responsible for?
This will tell you whether you’re buying more staff or creating a properly run back-office system that is managed.
WeSage BPM can help businesses evaluate back-office processes, establish the scope of outsourcing and create an organized delivery model that is based on their operational needs.
