When running Windows Server Backup to another location and you get the error “The process cannot access the file because it is being used by another process”.
To fix this you would need to look on the backup logs from the location %windir%\logs\windowsserverbackup.
In the error log file you will find
Error in deletion of [C:\System Volume Information\001.dat] while pruning the target VHD: Error [0x80070020] The process cannot access the file because it is being used by another process.
In my case, what I have done is that I deleted all the files in the target folder of the backup, re-run the backup and it worked.