Backoffice Process: Essentials To Keep Your Business Running Smoothly

Extending business teams has become a brilliant strategy, especially with businesses’ daily redundant workflows.

With the growing workload, businesses’ operations are divided into the front, middle, and back offices. While swamped with work, setting up efficient back office processes allows businesses to focus on the crucial tasks. This also ensures efficiency in the front office tasks. Apart from maintaining the business's highest functionality, a back office also helps to keep the company afloat amidst the trends and disruptions.

The processes in this workspace can be a combination of manual processes and automation.

While the front office interacts with clients and works on related operations, the back office supports its daily workflows.

If businesses require additional staff, the workload can be handled with an in-house team or can be outsourced. These tasks can also be assigned to independent third parties for specific reasons. Most firms usually trust an in-house team as they can directly oversee the back office operations. This model ensures that the documents will not be stolen or tampered with by third-party service providers.

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What are Back Office Processes?

A back office is an organization's extension, consisting of administration and support personnel. Despite not being visible to the clients, its existence proves critical for businesses smooth functioning.

Though they don’t talk to the clients, they communicate with the front-end officers. Communication can help obtain pricing structures, inventory, or other workflows. The frequency of conversations could depend on the field too.

In simpler terms, the primary back-office processes include working with multiple forms and documents. The process goes deeper into classification, analyzing, processing, and filing these papers. Since this can be tedious and time-consuming, outsourcing can be a useful option. Despite being repetitive, the back-office functions include administrative operations that are crucial for the growth of an organization.

The back offices can be set up by organizations such as:

  • Business Process Outsourcers (BPO services)
  • Government Agencies
  • Telecoms
  • Online Retailers
  • Financial Services
  • Insurance

The core back-office operations include –

  • Customer administration
  • Claims processing
  • Settlements
  • Clearances
  • Operations Support
  • Compliance
  • Clearance
  • HR and IT functions
  • Quality Assurance and Reporting
  • Priority case management
  • Transaction processing
  • Data inventory and inventory invoicing
  • Content moderation services

Around 50% of businesses outsource to cut costs, making it one of the primary reasons to outsource.

Apart from easing everyday management, back-office processes can substantially reduce operational costs. Another way to cut costs and ensure professionalism is outsourcing operations to Business Processing Outsourcing organizations.

Since these workflows require processing large volumes of transactions over weeks or months, a completely separate team can prove to be way more efficient.

Backoffice Process Management

The Back office processing workflows include analyzing, organizing, and monitoring workflows. These workflows are targeted to improve efficiency and bring out optimum outcomes.

The professionals in this team include auditors, IT professionals, and account and case managers. Their key responsibilities include:

  • Enhancing the accuracy and speed of the work
  • Offering low-cost processing
  • Meeting delivery deadlines
  • Boosting customer satisfaction

Since the workflows are tedious, there is a desperate need to maintain accuracy. This is done with precise planning and leveraging automated tools.

According to a survey, back-office operations result in a 2.8x annual increase in customer satisfaction. Establishing these tools in the workflows helps deliver value to the customers and stakeholders even in the long run.

Implementing advanced technology can help to:

  • Identify and designing changes in the current workflows with automation
  • Model execution methods for tasks
  • Improve and standardize operations through robotics and software
  • Enhance the customer experience

Types of Back Office Processes

Multiple back offices are located where commercial leases are inexpensive, and the labor pool is affordable and available in abundance. Apart from the primary benefits of technology, firms are now able to offer remote work opportunities and connect with talent from diverse locations across the globe. Offering incentives can also enhance this model to individuals who accept remote positions. Though this might save significant costs for the company, it can also lead to a salary cut for those moving to a back-office job from a front desk job.

The BPO benefits are further extended to rent savings and increased productivity.

If firms zero down on an in-house team, that has its pros too. An in-house team immerses itself in the company culture and acts as an extended company which can help fill in gaps and avoid iterations.

Here are the types of outsourcing models:

  • When the task is outsourced to low-cost international locations, it is known as offshoring.
  • Contracting nearby regions for the same purpose is known as near-shoring.
  • Contracting in the same country but other states are known as onshoring.

Each of these models has its pros and cons. A suitable model for an organization can be decided upon after weighing its requirements.

This brings us to the organization’s functions, which can be divided into two parts:

  • Administrative functions that keep the firm running
  • Customer support functions that fulfill the requests related to the customers’ goods and services.
  • Administrative functions

Here’s what the administrative functions include:

  • Human Resources (HR)
  • Information Technology (IT)
  • Procurement
  • Finance and Accounting
  • Legal
  • Fraud/Risk Management
  • Customer support functions

Here’s what the customer support functions include:

  • Transaction processing
  • Order fulfillment
  • Document preparation
  • Client servicing
  • Account maintenance

The customer support team works on collecting data such as name, address, company, products owned, and activity history. These functions can be executed excellently with the assistance of CRM tools. However, it is essential to note that the customer support functions might go beyond the functions mentioned above.

Other industry-specific functions:

  • Claims, processing, and underwriting
  • Credit card processing
  • Field Servicing Operations
  • Loans mortgage operations

Importance of Back-office Processes?

The primary benefit of a back office is that it enables businesses to provide excellent customer service while focusing on their core competencies.

The responsibilities of a back office can differ from one to the other significantly while being different than the front end.

It is always better to retain old customers rather than to get new ones from scratch. Superior customer experience is the key differentiating factor in setting businesses apart from struggling ones.

The businesses that arm their back offices with advanced technology are more likely to outperform their competitors. Implementing efficient processes can enable firms to keep their promises to customers with precise and timely deliveries.

The way to pivot the back office lies in the hands of executives. As the need and its potential are realized, transformation is indispensable. This way, the modern back and virtual offices can deliver more than the traditional ones.

These tasks are usually paper-intensive but have been made easy with automation and digitization. Studies suggest that almost 42% of finance operations can be fully automated.

This is done by implementing workflow systems, document scanning, and robotic process automation. The robotics process may even call for the workforce to develop a new skill set related to the same.

This can help boost the capability and save substantial costs even on large-scale operations.

Besides delivering value to the customers, refined approaches make dull and repetitive tasks less troublesome. This can also be done with little human stimulation and input, and likewise, these objectives can be achieved through skill development.

It should be known to transform the solution to ensure business continuity without disrupting the workflow and keeping up with the current business challenges and changes.

Furthermore, the back office has been going through a transformation by including web and online services, digital channels such as social media and chat, and social services. The introduction of these tools can make managing volume fluctuations way easier.

Roles in the Back Office

The roles in the back office could include those from entry-level professionals to highly skilled experts and professionals.

Entry-level jobs can include:

  • Data entry and transcription
  • Documents/records scanning and management
  • Transaction processing

As mentioned above, technologies are making the same easier with time—these upgrades the employees and the processes too to allow better ways to access people and information creatively. The tasks are rule-based and repetitive, leading to hindrances in continuous engagements.

The higher-level jobs include those that are skilled and experts at their tasks. They put their advanced knowledge into practice by making judgment calls and engaging in critical thinking. The roles include:

  • An underwriter (for an insurance company)
  • Mortgage specialist (for a bank)
  • A pharmacist (for a pharmacy business)
  • An operations director

The responsibilities for these roles may extend to more than these. With transitional offices, these skilled professionals can also perform tasks meant for lesser experienced people. This calls for the assessment of their skills before tasks are assigned to them.

Back Office Process – Key Takeaways

Back offices are made up of multiple teams which might operate in silos. The organizations may have multiple BPM/workflow solutions across the team, making it essential to recognize the ones that meet the current requirements perfectly. This can make it tedious for the higher management to evaluate the entire workflow picture at once.

Replacing disruptive processes is essential for businesses to break free from the shackles of redundancy.

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