Both terms refer to various business functions performed within an organization, but to understand the difference between Front-office and Back-office in a BPO, we must first define what does ‘BPO’ stand for? Business Process Outsourcing refers to subletting non-core business activities and operations to a Third-Party organization, which were previously performed by an in-house team. These operations consist of all the tasks carried out within a company by its workforce, with the difference between front office and back office defined by the nature of the functions executed.
“Do what you do best and outsource the rest” – Peter Drucker.
Outsourcing has become an intelligent business strategy over the decade, which is now a differentiator for most companies, especially for redundancy measures post-Covid-19 outbreak. When you outsource to typically low-cost international locations with additional redundancy; it is called offshoring. Contracting to regions nearby for cost reduction or talent expansion is termed nearshoring. Contracting out in the same country but other states is called onshoring. Each has its benefits, but the idea of having an externalized team immerse themselves in your company culture and act as your extended team remains the same.
A BPO firm handles a vast array of everyday business operations, and sometimes the roles of one division may intertwine with the other. Both divisions of the Front and Back office have a set of functions that together create a well-oiled machine; neither can function without the other. Although traditionally the differences between the two were defined, modern-day disruption and business trends are causing some functions to merge for amplified results.