It may not be as big as the other industries falling under outsourcing, but back office outsourcing is as important as the more popular ones such as contact center outsourcing, finance and accounting and research outsourcing. Outsourcing back office solutions such as web data entry may not directly affect a company’s operations but it is seen to be an important factor in hastening business processes.
Labor is one of the most expensive expenses when looking at a company’s budget and the market has already found ways on how to address this concern among companies. The market has tapped back office outsourcing to be a key factor, especially because it can directly lower a company’s costs. One of the usual processes that companies delegate to solutions providers is their data entry services. Such services can definitely increase the productivity of one’s company, as well as help in organizing the information gathered.
Back-office outsourcing is not limited by specific industries, as recent news show, even top financial companies are already tapping into back office outsourcing. Last January 23, banks, such as HSBC (NYSE:HBC), have been visiting China to canvass for solutions providers and determine possible partnership opportunities. However, China is not yet legally open to conduct business such as this even while there is a growing interest by financial institutions and banking companies towards back-office outsourcing.
In fact, quarterly results from back-office solutions providers’ show that there has been an increase in revenues by as much as 40% in the previous quarters. This may be due to an increase in banking and financial customers or companies spending more on outsourced solutions.
Citigroup (NYSE:C) and Bank of America (NYSE:BAC) are just two of the many financial companies that are outsourcing some of their back-office and IT solutions. These two banks mentioned have their eyes on Indian solutions providers, such as Tata Consultancy Services (NSE:TCS) and Wipro Limited (NYSE:WIT); driven mainly because of the cheaper labor costs the country is offering.
On another note, research conducted by Ovum, an industry analyst firm, talks about outsourcing trends this year including trends in back office outsourcing. According to Ovum, instead of companies, it will be government bodies who will be seeking the services of back office solutions providers.
Financial and banking companies as well as government bodies may have been outsourcing some of their processes for years already, but it seems that they have discovered new methods to make their processes even more convenient on their end, without sacrificing the quality of their output, namely by outsourcing some of their back office processes. They have now ventured into this kind of outsourcing, allowing them to further focus on research and business. This expansion in back office outsourcing clientele will definitely contribute to the growth of the outsourcing industry, mainly because expansion is one of the indicators of growth, aside from an increase in demand for such services and the amount of signed deals between companies. With these in hand, there is a high probability that back office outsourcing will be at par with the other more popular branches of outsourcing in the future.
Author: Jamee C.