The Value of the Back-Office

Recently I was asked what the value of having a Business Systems department was. It is after all, my enquirer stated, just back office and its not revenue generating. It is not unusual for me to encounter such comments but having spent the last five years managing a “back office” team I do think there is much IT (and business) folk misunderstand about “back office” systems and their role in a modern enterprise.

It is probably true that most people tend to take the IT processes used to run a business for granted. So what we have a payroll and some accountancy software, we might also need software to support a supply chain, we might need a CRM for something or other, perhaps a set of HR processes or a stock control system but they are a given right, who doesn’t have that stuff? We buy and forget right?


Well yes we do buy back office software. We may even have invested in an ERP solution (cue arguments over the supplier comparisons and odd metaphors around Marmite) but for sure, we will have invested in something. But do we recognize the importance and cost benefits of those systems. Do we actually keep on top of our investments? Do we exploit emerging technologies to find the gold in IT back office systems?

It isn’t sexy but try running your business without them

In my own department we oversee 250 key business processes, sure we use SAP but equally we could use anything, it is the processes that are the key. When I sat my SAP Enterprise Architecture exams many years back, the focus was on service orientated design, the pick and mix of services that allows you to improve business processes to find advantages that would ultimately save the company time and money. Words and terminologies have changed but fundamentally the concept stays the same. Improving your business processes offers up lower operational costs, provides flexibility and supports innovation in how we run our businesses.  Having damn good functional analysts is the vital to process improvement. You need to understand the processes to stand any chance of improving them. In all seriousness, back office IT may seem as sexy as a broken nosed bulldog’s face but you couldn’t operate without it.

I Wandered Lonely as a Cloud

The other major factor in optimizing our back office systems is the proliferation of cloud based service. The Digital Age has seen an eruption of Cloud based services: IaaS, PaaS, SaaS…you can add your own acronym to the list. A promise that there are cheaper ways of doing IT and business is, behind the hype, coming to fruition faster than Usain Bolt can run the hundred.

This throws up both challenges and opportunities. Can we acquire SaaS, integrate it into our business workflows to deliver cost benefits and increase our competitive advantage over our rivals? The answer is, of course we can but it requires serious though about how we integrate. Buying SaaS without thinking of how that service will collaborate with everything else is, quite frankly, a recipe for increasing costs not reducing them. Any benefits we might gain can be negated or lost by the disruption to our key workflows. To use another management speak phrase, we can quickly build up the technical debt and that is a bad thing, trust me. But Cloud based service platform is here to stay and its success is the reason why SAP et al, are putting their efforts into delivering cloud based ERP solutions. They see the future as clearly as we do and they aim to ensure they protect their revenue streams.

It’s all about the Team

Any engine room needs a team to keep it running smoothly. You may develop an award winning web site or a killer App but you need a team behind you to ensure you pay people, your supplies and generally keep the business wheels turning.

For me Business Systems, the back office, is all about the team. A vastly improved account reconciliation process may not make headlines and maybe ensuring the right stock in the right place at the right time won’t float your boat but, as I said earlier, it may not be sexy but unless you are a cottage industry, try running your business without it.