Back Office Outsourcing Looking at a Positive Road Ahead

Since outsourcing is slowly becoming a company’s necessity rather than a strategic opportunity, as a large number of businesses today signs into a partnership with a solutions provider, it is not surprising to see that the demand for outsourcing solutions is rising. Back office outsourcing solutions providers, such as web data entry services, have been seeing a positive outlook from where the industry is now. Just last month, we have published an article suggesting that back office may soon become a front-liner for the outsourcing industry because back office outsourcing has been gaining a remarkable amount of attention from companies. Also, the companies see that their processes and operations become more efficient with the help of an outsourcing solutions provider.

Ovum, a market research company, published a report claiming that there has been a soar in the outsourcing contracts awarded by the utility sector in Europe and North America and there could be a stable growth over the next 12 months. The conservatism in the utilities sector, which was quite strong in the past, is starting to fade as they realize the benefits of outsourcing. In fact, this may have already begun early this year when Capgemini was awarded with a contract with EDF. Capgemini’s last month of the first quarter of 2011 was greeted with a £100M partnership with a UK energy company. The areas in which the utilities sector for both the European and North American regions are looking to tap into would be IT infrastructure and application projects and back office activities.

Large enterprises, particularly those outsourcing solutions providers, have also started to realize that back office outsourcing will soon become an important aspect of companies, which is why they are now starting to integrate back office solutions into their service offerings. Recently, Capita Group PLC (LON:CPI) announced that it has acquired the outsourcing operations of Allied Irish Banks (AIB). Allied Irish Banks’ International Financial Services provides corporate administration and middle and back office services to financial institutions.

Moving to a different region where back office outsourcing is also becoming more popular, office spaces for lease seem to be worth a gold mine in the Philippines, the country recognized for its outsourcing developments, as both companies and outsourcing solutions providers flock to fall in line to avail a spot in one of the techno-hubs available in the country. The senior vice president of SM Investments Corp. (PSE:SM), David Rafael, mentioned that the demand for office spaces are picking up and that the company is looking at develop buildings put up tailored according to the needs of a business process outsourcing firm. Such growth in the demand of office spaces may be considered a result of the surge in overseas firms seeing the need to outsource their back office operations in the Philippines; with this idea at hand, Rafael points out that analysts are seeing an upward trend in the rental rates throughout the year and into 2012.

Back office processes are as important as any other process within a company and such realization by companies of different sectors is the reason behind the rise in the demand for back office outsourcing. It is perceived that this branch of outsourcing is indeed looking at a bright road ahead.

Author: Jamee C.