Many of today’s business challenges can reveal a number of weaknesses throughout your back-office. You need only be aware of the signs. Market and competitive forces are driving more business executives to reevaluate their support functions such as procurement, finance, human resources and information technology. Service level agreements, complex billing requirements, poor data management and dispirit systems can waste cash and quickly demotivate your workforce.
Often times, inefficient workflow and poor data access are the root cause of bloated overhead costs and poor response times. Left unattended, these weaknesses quickly inhibit the performance of your entire organization along with your ability to service your customers. This can lead to poor customer satisfaction results, costly service penalties, employee burnout and ultimately lost business.
Whether you choose to have your back-office in-house or outsourced, you need to have the right strategy in place to increase productivity and maximize your customer experience. Unfortunately by the time companies begin addressing the back-office, they have already sustained significant setbacks. Most back-offices only hit the radar when something bad happens. This lack of attention can weaken your competitiveness and significantly limit your company’s scalability.
Many executives feel that they have to patch their way toward improvement and, in doing so, miss a golden opportunity to have their back-office become a significant contributor to the success of their business. It is common for CFOs and COOs looking to cut costs to apply a broad brush approach across their back-office infrastructures. Not managed properly, this can be a big mistake. A more productive approach is to measure the efficiency and effectiveness of each back-office function and assess the importance each has to the overall health of your business.
As you begin to assess the effectiveness of your back-office, ask yourself the following questions:
1. Where does your company store its critical data?
How quickly are you able to access your business data? It does not take long for a company to accumulate tremendous amounts of data throughout the course of routine operations. Without the appropriate data strategy, this data often resides in many silos ranging from multiple databases, to numerous employee spreadsheets. This can inflate your IT, labor and governance costs very quickly while impeding your go-to-market initiatives.
Start with an understanding of your company’s data storage requirements, both today and how you see them changing over time. Monitor your company’s file storage processes; what type of files are created, who owns them and how are they stored. This will assist you in creating a data strategy that drives business value by improving data accessibility, flexibility and cost.
2. What is your current data management strategy?
The definition of data management is a “plan that addresses all forms of recorded information, regardless of the recording method”. The lack of an efficient data management strategy can lead to inefficient work processes, and delayed business support. Companies with proper data management strategies are able to streamline decision making and engage their customers at the optimum time, thereby improving overall customer satisfaction.
Every company contains a core set of data used by many or most of the processes and information systems in the company. This is commonly referred to as Master Data. It provides information on the company’s products, materials, vendors, customers and finances. Data is critical to a company’s success, and it must be managed effectively. Ensuring that the appropriate transactional, behavioral and operational data is being captured and utilized will help ensure that you are properly managing your company throughout each business cycle.
3. How seamless is your technology to the business?
The pace at which you must operate and adapt to changing market conditions is more important than ever. Speeding up business processes and transactions requires streamlining the flow of information. Your technology platform should avoid costly hardware, maintenance and support fees, while providing employees with an instinctive user interface design. Your success in this area depends upon on how seamlessly your organization’s people, processes and technology are linked together. Be sure to consider the benefits of cloud based IT solutions and services.
4. Do you find yourself relying heavily on a few employees?
As companies operate with fewer employees there is a greater emphasis on each individual’s role. This means that the loss created by a key performer exiting or being out for an extended period can be larger than ever. To avoid business disruption, begin teaching employees how to do other jobs, or elements of other jobs, throughout the back-office. This will ensure that you have a backup plan in place when a key employee exits. You will build stronger teams; improve communication, business awareness and accountability.
5. Are your employees motivated or do they appear burned-out?
Inefficient workflow processes and difficulty in accessing critical business data can decimate a back-office. These weaknesses quickly inhibit the performance of your entire organization along with your ability to provide noteworthy customer service. Left unattended this will lead to poor client satisfaction results, costly service penalties and ultimately lost business.
It is not uncommon for many organizations to continuously run in crisis mode. This creates undue pressure on the work force and quickly leads to employee burn-out. This results in increased HR problems and difficulty recruiting top talent. Often times, these issues are the direct result of inferior technology, inept data storage and poor data management strategies.
6. How long does it take to satisfy customer requests?
Customer satisfaction is the number one priority for achieving growth and profitability. Companies that consistently deliver results in a timely manner achieve high customer retention, repeat business and greater profits.
Delays in billing your customers, generating credits or processing service related requests are significant red flags regarding your back-office. It is essential that everyone understand how the customer is using their products and services. Take the time to align your employees with your customer value proposition.
7. Does your reporting and information flow help identify business opportunities and support effective decision-making?
Regardless of how good your employees are, if your financial and business reporting is not robust you have a problem. Effective management of your business depends on a timely and accurate reporting process. Your company must excel at gathering and interpreting your data.
The importance of creating customized reports to help you drive the right business decisions is critical. Data transparency is a sure way to manage your company more effectively. Back-office resources must be able to quickly adjust forecasts using accurate, up-to-date data pulled from your financial and customer applications. By incorporating multiple turnkey reports and distribution techniques, you will ensure the right information is delivered to the appropriate resources and that critical decisions are not delayed.