Nearshore Americas
ECLAC Growth

New Demand for “High Touch” Back-Office Services

In recent years, there has been an increasing demand for nearshore providers to offer back-office support. At times, a client will first engage with traditional client-facing BPO before moving up the value chain. Where a company has a more seasoned offering, with qualified personnel, engagements will often begin with a contract for administrative support and grow from there.

“We have seen an increasing demand of U.S. companies needing back-office services,” says Valeria Rico, CEO of GGA Solutions in Tijuana, Mexico. “Examples include bank reconciliation, payment reconciliation, retail cash-flow, payment tracking, and deposit reconciliations.”

Research has shown that demand is not only high for U.S. companies, but also in the Latin American region. In Latin America, more than 50% of companies outsource back-office functions, compared to 40% globally. These are big numbers, and yet all indications are that there is still more room for growth, particularly with U.S. customers.

“We’re seeing strong demand from our customers in the insurance sector in the U.S.,” says Rico. “We’ve been able to take on all the administrative – essentially non-accounting – functions. This allows their accountants to focus on big picture tasks, such as financial strategies, loss prevention, profit and loss, and budget considerations.”

By taking on this work, GGA solutions – which has two locations in Tijuana’s financial and business district, the Zona Río – can allow its clients to focus on those tasks that are core to their growth strategies. Nearshore providers have a special advantage here, with Tijuana uniquely positioned to offer higher-value services.

“In Tijuana, we can easily find the talent with the skillset required to learn basic accounting functions,” says Rico. “Our people do an excellent job while costing just a fraction of a U.S. resource with the identical skill-set.”

The Virtuous Mix of BPO and Back-Office

Often, a back-office provider will also have BPO offerings. This has the advantage of offering clients an easy entry point, but also for providing employees with a career path. The skills needed for BPO can provide a solid basis for more complex engagements, and those younger workers interested in internal training, or pursuing their education off-site, are often motivated by the possibility of providing back-office support.

“A BPO employee will learn some of the challenges that a U.S.-based business faces, as well as the intricacies of solving problems in real-time,” says Rico. “We offer services that help companies with multiple brick-and-mortar locations, such as not getting cash deposited on time, or when a deposit goes astray.”

In this regard, though the services are back-office, they can also be “high touch”, in that the client will at times expect a higher degree of provider engagement. Here is where nearshore has always had an advantage over offshore, as time zones align well, and the culture is better attuned to some of the nuances unique to U.S. business.

This is an important point, as one of the hurdles that providers face with back-office solutions is trust. This is more sensitive, higher-value work than a typical BPO engagement, and many companies feel that by outsourcing they will lose control of key elements of their business. There is also concern that the cost associated with setting up an engagement will be prohibitive.

This is why the greatest value is in those areas where companies are already struggling, or where they have limited skill sets, and where a provider is already set-up to help. In this regard, adding on a nearshore component adds value while producing limited risk, particularly for those audit or oversight functions that are often low priority because they have no revenue streams attached to them, yet remain critical to business viability. For these kinds of functions, finding the money in budgets for highly-paid resources in the U.S. can be difficult. Inevitably, the cost-effective services offered by a nearshore provider have real appeal.

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“In the example of our company, the services rendered by our customer’s branch location are reviewed by our nearshore team,” says Rico from GGA Solutions. “This confirms that the service was provided – which is to say, that payment was uploaded via the website after taking receiving cash,” he added.

The result? A more efficient business. By outsourcing business-critical back-office functions that are also low-risk, and that allows a customer to feel secure, the client is able to address key processes that are more closely attached to revenue generation. Ultimately, this sort of outsourcing allows an enterprise to gain visibility into how their business is performing, and how well they are aligning with their overall strategy.

GGA Solutions

GGA Solutions is a leading software development and business process outsourcing firm with two locations in Tijuana, Mexico.

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