Which Is Better: Front Office Or Back Office BPO?

 | 
September 22, 2022
UPDATED: 
September 22, 2022
Which Is Better: Front Office Or Back Office Bpo

Businesses frequently outsource their repetitive and mundane business processes to specialized outsourcing firms. As a result of the BPO industry's continuous rise to meet the needs of businesses worldwide, outsourcing has become the mainstream recruitment solution. The front and back office jobs are commonly outsourced, but what are they? This section will compare and contrast these terms and break them down for you.

Front Office Business Process Outsourcing

Front office outsourcing encompasses all tasks involving customer interaction. The front office employees are responsible for interacting with existing or new clients and ensuring high customer satisfaction. Front office tasks include all actions that involve generating sales, meeting client demand, and providing after-sales services. In addition, employees aspire to provide client satisfaction through service marketing, client meetings, client relationship building, and candidate interviews.

They play an important role in increasing company revenue. Companies have recently begun to hire remote front-office employees from outsourcing organizations where they can find efficient workers who meet their needs. Front Office BPO services may comprise:

  • Customer Service
  • Marketing and sales
  • Technical Support, Help Desk / Service Desk Support, and other IT-enabled services
  • Scheduling and Public Relations
  • Inbound/Outbound Calls, Contact Center Services

Back Office Business Process Outsourcing

Back office BPO refers to organizations that hire contingent workers to provide non-client-facing services. For example, accounting, IT, supply chain, HR, internal communications, and other departments have administration and support personnel. This type of outsourcing is growing into other subtypes, such as IT-Enabled Services (ITES) Outsourcing, Legal Process Outsourcing (LPO), and Knowledge Process Outsourcing (KPO).

Because of the technical expertise required to perform a service, many non-client-facing operations are frequently outsourced. Due to technical complexity and required expertise, outsourced positions include paralegals, IT technicians, accountants, and others. Back office BPO gives businesses access to valuable knowledge and skill sets that do not rely on in-house infrastructure. Back-Office BPO services include, but are not limited to:

  • Accounting and Payroll
  • Services for Data Management
  • HR and IT units
  • Development and testing of software and websites
  • Quality Control and Reporting
  • Management and creation of content
  • Administration
  • Manufacturing and Compliance
  • Processing of Claims

Front Office & Back Office BPO: What is the Difference?

As businesses embrace the gig economy, the global business process outsourcing (BPO) market continues to expand. Within one year, the global BPO market value expanded from $92.5 billion in 2019 to $232.32 billion in 2020 and is projected to continue rising through 2028. Business activities operate in two wings that are front-office and back-office. Front-office and back-office activities are critical for running a successful business. The front office is the company's public face, while the back office works as an administrator to keep things running smoothly. Although there are some resemblances, and one section cannot function without the assistance of others, they differ. Following are some key differences between the front and back-office BPOs:

Definition

Front office BPO relates to outsourcing client or customer-facing services to third-party vendors or external businesses. These include sales, marketing, customer service, technical support, and anyone interacting directly with customers.

The administration department makes up most of a company's back office BPO section. This section ensures that all operations run smoothly so the daily business can run smoothly. Employees in the BPO back office do not have direct contact with the company's customers. Instead, it aids in daily administrative tasks and developing and manufacturing products and services. Though they have no direct contact with customers, back-office employees are an important part of the company because they handle day-to-day operations.

Customer Participation

Back-office BPO involves direct customer involvement and interaction.

Front-office BPO does not involve or interact with customers directly.

Core Functions

To do their job effectively, front-office personnel must have strong communication skills, a keen understanding of consumer pain points, and in-depth product or service knowledge.

Whatever front-office function your company requires, it should strive to connect with customers on their preferred platforms. This increases brand loyalty and gives you a competitive advantage. Businesses can benefit from business process outsourcing for a variety of front-office functions. Following are a few functions:

  • Customer support
  • Multilingual Support
  • Helpdesk or Technical Support
  • Appointment Setting

Traditional back-office functions are divided into two categories: administrative functions that keep the company running and customer support functions that directly fulfill customer goods and service requests.

Administrative functions typically include the following:

  • Human Capital (HR)
  • Data management / Information technology (IT)
  • Management of Compliance/Fraud/Risk
  • Procurement
  • Accounting and Finance

Customer support functions may include, but are not limited to, the following:

  • Order completion
  • Processing of transactions
  • Preparation of documentation
  • Account administration
  • Customer service
  • Customer onboarding and dispute resolution

Salary

Since the front office employees are the ones who generate the revenue for the organization, the salary earned by the front office employees is higher. 

Back office employees generally earn lower than front-office employees for most functions, though some functions are evolving nowadays, which can match the other side.

Strategy

Back-office BPO contributes to strategy development.

Front-office BPO is in charge of human resources and compliance management.

Roles and Responsibilities

Front-office employees are those who directly generate revenue for the company. Client-facing duties in the front office include marketing, sales, public relations, customer service, and call centers. Following are the roles and responsibilities performed in front-office BPO:

  • Gathering information
  • Creating new accounts
  • Setting up meetings
  • Addressing customer concerns
  • Order Management

In business, the back office does not always take a back seat. Most online businesses, for example, could not function without the assistance of the information technology department. Back-office activities assist front-line employees by planning, monitoring, and improving ongoing business operations. What customers see on the front end frequently results from data collection, strategic meetings, and operational decisions made on the back end. Following are the roles and responsibilities of back-office BPO:

  • Research, Data Entry, Indexing, Conversion, Processing, and Management
  • Credentialing, Compliance Management, and Record-Keeping
  • Financial Analysis, Auditing, and Reporting
  • Invoicing and Case Management
  • Software/Database Development and Quality Engineering
  • Remote Monitoring and Management
  • Risk Assessment
  • Email/Web/Chat Support
  • RCM, ROI, and CRM Management
  • Asset Management, Projections, and Budgeting
  • Accounts Payable/Receivable, Claims, Billing, and Payment Processing

Area of Concentration

Back-office BPO aims to increase the company's revenue.

Front-office BPO aims to reduce costs while increasing revenue.

Considerations Before Outsourcing Any Business Work

Businesses can collaborate with a third party that already has the resources, expertise, and capacity to support growth through outsourcing. Following are the factors to understand before outsourcing any business work:

Consult with the Internal Team

Please consult your internal team, as they are intimately familiar with the project's movements and activities. The outsourcing work process will introduce some changes to the existing process. Please don't keep your employees in the dark; talk to them, make suggestions, and listen to their concerns.

Proper Research

Proper research is required. Business owners are well aware that running a business entails taking risks. Examine the work that you intend to outsource. As a precaution, keep legal issues and legislation in mind.

Management of Operational Costs

Outsourcing necessitates a different approach to cost management. First, prioritize cost reduction over expense increases. It would help if you took the initiative to achieve the best working results within your budget.

Concerns about Privacy and the Law

Hiring an outsourcing firm entails gaining access to many business data, information, and activities. For example, they may access your operational process, customer data, and purchasing details in various ways.

The real issues arise when an outsourcing company divulges business information. First, make a sound decision and pursue a legal contract with the outsourcing company. Then, assign a team to handle the privacy and legal concerns.

Conclusion

Outsourcing of business processes is becoming increasingly popular. As a result, businesses have begun to rely more on outsourcing firms for front and back office work. However, not all organizations outsourcing strategies are the same. Methods differ greatly depending on the type of business you run and the work you intend to outsource. As a result, choosing the right outsourcing partner for the right project is critical. Concentrate on the critical points for your front and back office support, and aim for success with efficient outsourcing!

Author

  • Chuck is Score LA’s Executive Director of Events and Marketing. He aims to help business owners and would-be entrepreneurs in Los Angeles improve their business practices.

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