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Back Office Services

Back office typically means all the back-end operations of a company. This term originated from times when the building of organizations had a typical front office to incorporate the sales teams and other staff that interacted with customers directly. Back office therefore meant all the manufacturing, developing and administrative activities of the company and the staff working in the back office would not interact with customers directly.

Although back office operations are usually not given a lot of consideration, they are a major contributor to any business. Back office operations are like a soul to a body. Large amount of data needs to be stored by organizations which typically eats into the core business activities. If companies outsource processing of non-core but sensitive and critical data, it reduces costs, increases profitability and delivers greater core value and operational excellence.

Back offices are a part of Business Process Outsourcing (BPO). They include Information Technology departments that maintain telephones, networks, accounts, computers, human resources, operations architecture, administration and other support functions. These tasks are often supported by back-office systems: secure e-commerce software that processes company information (e.g. a database). A back-office system keeps a record of the company’s sales and purchase transactions, and update the inventory as needed. Invoices, receipts, and reports can also be produced by the back-office system.

In banking, the Back office includes a heavyweight IT processing system that handles position keeping, clearance, and settlement. In legal and para legal areas back office operations include research, report writing, deposition summaries and most common legal duties for lawyers and other legal experts. Legal operations are typically time consuming but with Back office services speed can be accomplished to centralize daily activities and information, client and case management, document preparation, research and billing. Such ease of legal operations can ensure a smooth functioning of legal firms.

In investment firms, the back office includes the administrative functions that support the trading of securities, including record keeping, trade confirmation, trade settlement, and regulatory compliance.

In sales, the back office typically plays a key role internally, providing support to the sales force for administrative duties such as legal, finance, marketing, order management, operations support, etc. as well as customer facing roles typically positioned to include functions that support customer order fulfillment and duties involved with readying customer-support call centers.

Data analysis and entry is an important area of expertise that helps boost the performance, competence, and increase the productivity of an organization. A quick support for data analyzing or large-scale data capture, claims processing or any other business outsourcing services can be accomplished by a back office operation.

Back offices may be somewhere other than the headquarters of a company. Much of the time they are in areas and countries with cheaper rent and lower labor costs. Back office functions can be outsourced to consultants and contractors in any country.

The Business Process of Outsourcing BPO & Information Technology

Business Process Outsourcing (BPO) is neither a technology nor a technology system. Business Process Outsourcing is actually a business strategy.

BPO or Business Process Outsourcing and IT or Information Technology seldom require any introduction these days. They are quite distinct from each other. While the former concentrates on using an external provider to perform specific processes on the behalf of a company, the latter is an entire industry which uses computer and software to manage information.

The surge in IT spending across markets, both emerging and rooted led to the collaboration of the Information Technology and Business Process Outsourcing sectors. Particularly in the last decade new business models and first time buyers were encouraged and the value-propositions for the existing ones were re-invented.

The two types of outsourcing are information technology (IT) outsourcing and business process outsourcing (BPO). Both types rely heavily on the application of information technology to facilitate interactions among a company and its outsourcing partners.

BPO focuses on hiring a third-party company or service provider to do IT-related activities. These activities include:

• Application management and application development
• Data center operations/testing
• Quality assurance

In the early days, BPO usually consisted of outsourcing processes such as payroll. Then it grew to include employee benefits management. Now it encompasses a number of functions that are considered “non-core” to the primary business strategy.

What embarked off in the 1970′s when companies outsourced a few services like payroll and/or maintenance came about in the ensuing decades as a strategic management issue especially for Business Process Outsourcing. A savvy and skilled organization can help define the outlay, provide the prerequisite expertise and accomplish the chore cost effectively in time.

Most of the avant-garde businesses rely on information systems from an employee e-mail, database management, to development and maintenance of applications, and network security. Even a rookie start up would need an order-tracking system, and Business Process Outsourcing could fairly serve the purpose. Also, one of the most positive attributes of outsourcing is cost-reduction(by converting fixed costs to variable costs). Flexible decision making and innovation back it up, as a good alliance takes shape among the client and a vendor and ergo serves as a one-stop terrain for technological, operational and decisive assistance.

Intertwined-IT& BPO

With the advent of Information Technology solution options, in the Business Process Outsourcing and the solution design process, the most crucial facets are seen as a flexibility to adapt to buyer process specifications like cost-efficiency.

The most commonly outsourced businesses include:

• Content Development
• IT outsourcing
• Legal outsourcing
• Logistics
• Manufacturing
• Recruitment
• Technical/Customer Support
• Web Design and Maintenance

Business Process Outsourcing enhances the flexibility of an organization in different ways.

Some of the key inclinations aimed at driving efficiencies in the Information Technology and Business Process outsourcing sector are as the following:

• Progressive Outsourcing
• Cloudsourcing
• The end of Customization
• A rise in global technology outpaced by global sourcing growth
• An enhanced value proposition

A long term vision of how these trends bring about fundamental alterations in correlating both Information Technology and Business Process Outsourcing would bring about an abundance of efficiency to the way services are delivered.

The Benefits of Outsourcing IT Services

The core competencies of your organization being different, you find yourself in a dilemma as to how you can complete or even take up a client's work. The lure of the volume of money that can be churned by accepting that particular business puts you in a need to perform an unrelated function.

However, there are companies that are highly qualified in this area and charge you for doing your work. Business process outsourcing (BPO) is born at this moment. Outsourcing a part of your business activity to another company that specializes in that area releases you from the burden of this task as well as it contributes to cutting of cost and time. If you were to enter an area where you do not have the right knowledge or resource, it is very likely that you will waste time and money.

Information Technology (IT) has taken giant leaps in the last two decades and is at an all time high. With the advancement has come the need to have more man power to accomplish the IT related tasks. This has proved to be a Herculean task to some of the advanced countries where such resource is scarce. Here was an opportunity for the lesser developed countries that jumped in to the IT related services field and offered services at dirt cheap prices.

It certainly makes sense to outsource IT services as these offer a spectrum of services. Once you outsource IT services you can free your resources and allow them to complete their core areas with efficiency.

Some of the benefits of outsourcing IT services:

• Cost effective and reduce overhead expenses
• Concentration on core business
• Internal recruitment for specialized personnel is no longer there
• Speed up your work by eliminating redundancy in structure
• Save on recruting new employees
• Training for the new services is not required
• Improve on client satisfaction by completing on time
• Provide reliable, accurate and value based services
• Get knowledge of the best services and practices in the domain
• Establish a strong relationship with the client
• Increase an overall efficiency

All the above benefits being similar to all outsourcing companies, companies can largely benefit from outsourcing IT services to offshore as there is a time zone difference and this would help in completing critical work quickly. For example outsourcing from US to India would mean, work during day when it is night in the US and that the work given today would be taken up immediately. Speed and efficiency spell success and accomplishment to your business and overall growth.

A Cost Effective Solution - Translation Services

Legal documentation generally is voluminous and extensive with documents running into thousands. If these documents were to be in different languages it would be extremely difficult for attorneys to sieve through these documents, get it translated manually or engage an in-house translator. The whole process often leads to a search for a bulk translation facility that would scan and translate numerous documents in a small time.

Engaging in-house translators or outsourcing the job to individuals is not an entirely feasible idea because your documents are valuable and have a deadline for translation. Document translation services enable you to get volumes of documents translated quickly. This type of document translation services are resourceful to any type of company that conducts business overseas, or is interested in attracting an international market.

When your business includes sensitive information like legal matters requiring a lot of attention to both details and security, you definitely require a service that can cater to these. Professional translation services can handle such documents effectively in whatever volumes are to be translated. Document translation companies can save you time and money, and ensure that your core messages are translated appropriately for your prospective audience.

It is a known fact that many American law firms have started opting professional translation services that are both efficient and cost-effective. Office work can be managed effectively without any hindrances. In offices where there is a heavy document inflow that requires high volume of scanning and translation, translation services come handy to search instantly through content. Translation services have tools that allow work-flow to increase manifold since employees no longer have to waste time on manual labor and can work more productively.

Optical Character Recognition (OCR) is the electronic translation of scanned images of handwritten, typewritten or printed text to machine encoded text. OCR is highly popular in converting books and documents into electronic files, to maintain record-keeping system in an office in computerized manner or to publish a text on websites.

Translation and OCR services are extremely useful for attorneys and other legal services in saving time and money. A big chunk of information can be ready for review in a few days rather than weeks. Millions of pages of information can be ready for review in just few days compared to months before enabling legal experts to meet court deadlines and prepare case strategy. A lot of money can be saved with this method as also making attorneys easily pinpoint critical issues and locate documents just when they need them.

The Future of Business Process Outsourcing

With the world moving in a high paced technological advancement and with an open market in the world market scenario, it is but expected that the way business is being done is going through remarkable transformation. Globally services are being outsourced to companies specializing in particular areas. Outsourcing happens when certain areas of running a business establishment hinder the effective functioning of its core competencies. Hence Business Process Outsourcing or the simple BPO has grabbed a major share in the IT and IT related services.

The earlier form of BPO consisted of outsourcing only some areas of work like Payroll, Retail, Insurance, Mortgage, Banking and Finance, Healthcare, Telecommunications, Technology, Travel and Hospitality and Supply Chain in manufacturing industries. Not limited to these anymore, BPO caters to many areas of business and is expected to dominate almost all areas in business sector. Both the types of outsourcing, the back office functions like human resources payroll etc. and the front office services like customer and contact related services have a wide scope in future.

The world business market now looks at the Asian countries for its present and future BPO activities. Service being cheaper and delivery being quicker, this market is being praised by the developed countries as the modern Mecca for outsourcing business needs. Creating offshore centers provides a flexible and cost-effective structure for business establishments. The large influx of BPO into Asian countries promises a very stable future for both the parties involved.

Similar to BPO, Knowledge Process outsourcing (KPO), has evolved in the recent past and has a promising future. While BPO emphasizes on process expertise, KPO stresses business expertise. KPO requires advanced exceptional technical skills coupled with judgment to execute highly complex and customized processes.

There is a high potential for future of KPOs worldwide. The scope of KPOs is not limited to Information technology (IT) and Information Technology Enabled Services (ITES) but scale the other areas like Legal Processes, Intellectual Property and Patent Related Services etc. While an outsourcing company concentrates on its core specialization and competency activities, it can outsource other activities and gain a lot of momentum in the core areas. A cost minimization this way and a total optimization in the business can happen when this is put in practice.

The Future of Indian BPO

India has been a favorite market for BPO, with Australia being the biggest market in the Asia-Pacific region. In the Asia-Pacific region, Australia has major share in the revenue generated by BPOs. However India has been the fastest growing BPO provider in the last decade. According to Gartner estimates, India is expected to reach $1.4 billion at the end of 2011 which is 23.2% more than 2010. By 2020 India is expected to touch $285 billion, according to KPMG reports. China has an enviable position when it comes to call centers and has reported a revenue of $28 million in 2010. Philippines has a bright future in BPO with an approximated revenue of $12 billion in 2010.

While world over outsourcing has caused an open market, Africa too has ventured into grabbing its share in BPO meat with Kenya launching its first call center. Mauritius is also vying at all possibilities in this area.

The Indian BPO market has an extremely promising and encouraging picture in the future. The scope of business opportunities predict endless areas for businesses to explore and thereby creating millions of jobs for the large amount of talent pool available in India. A promise of highly qualified and skilled professionals making career in BPOs is also a possibility being seen for future in India.

Litigation Coding

Support provided in any form to attorneys is known as litigation support. Litigation support entails providing of support to attorneys in the form of consultation and other subsistence for current or pending cases. The type of services offered typically depends on the range of services expected by the attorneys. These services can vary from research and documentation of facts or precedents before the case comes for trial or assisting in assessing the damages in a case already tried.

In the world of litigation, it does not end if a case is won or lost. There is a great deal of documentation that needs to be done either way. In the event of a loss, there is a need to find out if there are any factors the attorney may use to log an appeal or of the case is won then the support has to assess the amount of damages that are to be awarded etc.

In both the cases there is a need for document utilization service which is a part of litigation coding. Litigation coding can be considered a branch of Business Process Outsourcing as legal businesses outsource legal coding to offshore companies to ease their burden as well as cost. Litigation coding is a specialized service that enables attorneys to capture large chunks of data in a coded format. It is the process of creating a summary or keyword data from the available documents. Legal professionals find this especially useful to retrieve volumes of data coded as index or data base. Documents or records in a date base are indexed or coded to facilitate a quick retrieval.

There are two types of Litigation coding- Objective and Subjective. In subjective coding the coder seeks key information from the document, analyses it and makes a short summary of the document. This subjective information assists the user when there is too much of information in the document. In objective coding legally trained experts review every document and prepare a computerized index of basic objective data.

Legal documentation certainly is not cheap at all. Legal companies largely depend on offshore litigation coding. The offshore litigation coding companies provide a proper transfer of data by forming a database and then coding and indexing these records to the customer’s satisfaction. The offshore litigation coding companies offer accurate, quality and immediate response to the need of clients.

Litigation companies can avoid a lot of expenditure as well as stress that is caused due to this process. By outsourcing the coding work, legal companies can maximize their output by concentrating on their core activities and establishing success. Outsourcing of litigation coding cuts down a company’s expenses dramatically which fund can be sued for further augmentation of business.

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Knowledge Process Outsourcing

Knowledge Process Outsourcing (KPO), frequently compared to Business Process Outsourcing (BPO) is the next step in the outsourcing value chain. It is not an offshoot of BPO as people like to think but an independent industry. KPO is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost. While BPO stresses on process expertise, KPO emphasizes business expertise. KPO requires advanced analytical and technical skills coupled with judgment to execute highly complex and customized processes.

Knowledge process can further be high added value processes chain where the achievement of objectives is highly dependent on the skills, domain knowledge and experience of the people carrying out the activity. And when this activity gets outsourced a new business activity emerges, which is generally known as Knowledge Process Outsourcing.

KPO involves a specialized domain knowledge of a higher level. It is a combination of BPO, Research Process Outsourcing (RPO) and Analysis Proves Outsourcing (APO). KPO Industry handles more amount of high skilled work other than the BPO Industry. While KPO derives its strength from the depth of knowledge, experience and judgment factor, BPO (Business Process Outsourcing) in contrast is more about size, volume and efficiency.

The main driver for outsourcing is cost reduction coupled with the value adds of these services. Labor cost savings overseas are just too great to be ignored. In knowledge-intensive industries such as Analytics and Data Mining Services, Research and Development, and Intellectual Property Research, companies can save significantly 40 to 50% by off shoring work to low-wage countries. On the value front, KPOs typically offer competitive advantage to its clients by providing market and industry research, data and statistical analysis, competitive analysis, and support in legal and administration processes.

Having one or more offshore centers, provides flexibility in terms of human resource and time management. Outsourcing allows companies to add or reduce personnel easily avoiding an expensive layoff process. By utilizing the time difference between different parts of the globe, development can take place constantly. The ability to send massive data amounts anywhere via the Internet allows a continual collaboration on a large scale.

There are some minor risks associated with KPOs which are well handled by KPO (Knowledge Process Outsourcing) organizations to ensure optimum benefits to the outsourcing companies. There is a tight wall of security in place during the data transfer and during the knowledge transfer. The confidentiality of the data is maintained by the KPOs that take due care to maintain high quality of work and personnel. A full fledged data back up is in place at the KPOs to make sure the outsourcing company can access whatever information they require at any time. Time lines are worked out in advance to accommodate the necessary smooth work flow.

There is a high potential for KPOs in the present day scenario. The scope of KPOs is not restricted to Information Technology (IT) and Information Technology Enabled Services (ITES). KPOs have a future in other areas like Legal Processes, Intellectual Property and Patent Related Services etc. While the company concentrates on its core specialization and competency activities, it can outsource other activities and gain a lot of momentum in the core areas. There is a cost minimization this way and a total optimization in the business.

Business Process Outsourcing

Business Process Outsourcing (BPO) is a division of Outsourcing which includes contracting of operations and responsibilities of a specific area of business functions, to a third party service provider. BPO has been there in the manufacturing industry for many years now. Manufacturing industries typically have big divisions such as suppy chain that require services to handle.

Business Process Outsourcing (BPO) has two types of outsourcing; Back office outsourcing involves functions like human resources, accounting and finance; Front office has services related to customer related and contact center.

BPO that is contracted outside a company’s country is called offshore outsourcing and BPO that is contracted to a company’s neighboring country is called nearshore outsourcing.

Since BPO is close to Information Technology industry, it is generally called as information technology enabled service or ITES. Two segments of BPO are Knowledge Process Outsourcing (KPO) and Legal Process Outsourcing (LPO).

BPO has advantages and disadvantages. One of the advantages is it increases the company’s flexibility. Resources can be freed and a variable cost structure can be imposed giving a company a freedom to make changes as per the requirements. BPO allows a company to focus on its core competencies without being burdened by the demands of bureaucratic restraints. Key employees are released from non core processes and given time to focus on their actual core areas. This creates a competitive edge in the company. BPO can contribute to the increase in speed of business processes. Speed in business processes is another area where the company would benefit due to BPO. Business bottle necks can be avoided by companies and retain their goals in the right perspective. BPO would allow a company to retain their speed and agility which would not have been possible without BPO. A company would be able to grow at a faster pace with the flexibility that a BPO would give.

With many advantages of flexibility in the company operations, management needs to take cautious steps before embarking on a BPO. Areas where problems arise in practice are service levels, unclear contractual issues, changing requirements, and unforeseen changes. These challenges are not conducive to a company’s growth. A dependence on a BPO would reduce flexibility on operations of a company.

Risk is the major drawback with Business Process Outsourcing. Outsourcing of an Information System, for example, can cause security risks both from a communication and from a privacy perspective. Employees no longer feel attached to many functions in the organization. Running costs may be underestimated leading to a major risk.

Risk factors must always be influenced to achieve maximum benefits. A business continuity model (BCM) should be in place to manage outsourcing in a structured way. Threats should be avoided by minimizing risks and maximizing positive outcome. A BCM is a series of steps to successfully identify, manage and control the business processes that can be outsourced.