Expertise in any industry is essential. You are the expert in your position as a wholesale executive. When you outsource processes and systems for your company, you must select industry experts to join your team. Outsourcing back-office processes and tasks to a third-party vendor offsite creates the powerhouse team that you need to help you improve your wholesale business’ performance. Here are four ways that back-office outsourcing could potentially benefit your wholesale company.
1. Access to the Latest Technology
Software vendors and technology companies are working to put out the latest technologies in back-office solutions, yet some estimates are that over 50% of ERP implementations fail after purchase and before launch. When you outsource solutions to a third-party provider, you gain access to the latest technology without that risk and without having to invest your time and energy in implementation. The third-party provider will also be able to identify the most effective tech solutions for your particular business. More importantly, their personnel will have a deep understanding of their software that is difficult for wholesalers to replicate.
Let’s say you are trying to manage your accounting practices more efficiently to improve your end-of-year gains. Here is where the newest and fastest accounting software for performing and managing cash applications, calculating and processing accounts payable and managing receivables will benefit your business. You can outsource accounting processes to expert third-party vendors.
2. Increase Employee Expertise/Decrease Staff Inefficiencies
You can also reduce the time and money your team spends on taking care of manual mind-numbing tasks and benefit from a deeper knowledge base that a back-office service provider accumulates from finding solutions for multiple companies. When a wholesaler breaks into a new account they are faced with a steep learning curve. Errors can cause chargebacks. An experienced third-party will likely have experience with that retailer, help improve their experience with the wholesaler that can result in increased sales.
Outsourcing allows you to maintain and access your data via the cloud. Imagine being able to digitize your current paper filing system so that everything is instantly and easily available, including BOLs and original orders, via a cloud-based storage system. That is entirely feasible when you work with a third-party.
You also cut out the cost of purchasing and maintaining IT infrastructure and equipment for your office. When you outsource back-office tasks, you give your staff the capacity to spend their energy on more important tasks. They are able to focus on sales, product, and design, the key drivers of growth for any wholesale company.
3. Creates Business Continuity
Reduce risks to your company in the wake of partner conflicts, manmade or even natural disasters by outsourcing with a third-party provider.
Often, one partner has access to more information than the other. This can lead to reduced trust and internal conflict that negatively impacts a wholesale company. A qualified back-office provider can assist you by providing transparency in reporting between all ownership parties.
In addition, since the core of their business revolves around data, third party providers often devote significant resources to contingency planning. Wholesalers often work on tight margins and can rarely afford large investments in contingency. But when systems are down the costs can be even greater. Third parties often invest in backup infrastructure at levels that a typical wholesale company can rarely match.
4. Improve the Organization of Your Data
Eliminate the threat of onsite physical theft of data or equipment pertaining to your business and operations by outsourcing to a third party provider. This way your IT infrastructure—including the server, your equipment, and data—is securely stored. Typically this is managed in a high-security location and among multiple sites.
Along with gathering data for your business, you will be able to aggregate that data much more efficiently and create useful reporting to help you make critical decisions about your business. This allows your team to use this data for evaluating the way you operate your business. Identify vulnerable areas in your company security and improve operations to better manage your data.
Bottom Line Regarding Back-Office Outsourcing
When dealing with back-office outsourcing, a third-party vendor offers access to the latest technology and software. You also save money on offsite storage and IT infrastructure, which further benefits your business and its bottom line. All of your data-entry, including customized reports, is managed in one cloud-based solution.
You are able to access vital inventory, sales, and other data in real time more efficiently and with easy access from any location. When coordinating orders with freight brokers and factory managers, you will be confident in knowing your company and client information is accurate and secured at each point of access. Your team will also be able to better manage orders, allocation, and shipping using a shared-access system. This enables your company to meet the mark in terms of customer service, which is vital to scalable growth.
Wholesale Executive Insider is a publication dedicated to helping wholesale executives stay up-to-date with the latest industry insights to improve their operations and increase their bottom line.
Our team has deep industry knowledge and a network of solution providers that help wholesalers focus on improving their business and increasing their revenue. If you’d like to get free advice and recommendations on back-office outsourcing, feel free to book a time to speak 1-on-1 with one of our knowledgeable industry advisors.