Despite
the leaps and bounds made within the enterprise technology space over the past
20 years, little has changed with the way we run our back offices. We still manually
process many of our back office functions and develop custom fixes to try to
bridge process silos in an attempt to connect and automate processes.

Even if
your organization uses enterprise software in the back office, a considerable
amount of time and money is probably spent on manual tasks to bridge processes
that span departments, business units, platforms, applications or geographic
locations. While this might work as a kind of “patch,” it really means that
you’re not getting the most out of your enterprise-wide investments. It also
means that risky, error-prone manual processes slow progress and limit your
organization’s competitive edge.

Today there’s a shift in this way
of working. Companies realize the benefits of having more control over their
mission-critical processes. In other words, we are now on the cusp of the “Back
Office Revolution” as reducing the impact of labor-intensive back office tasks have
become a high priority for CIOs and IT decision makers. Leading organizations
now combine an industrial perspective with automated strategic processes to
target and eliminate time-consuming, imprecise processes in a holistic way.

Re-engineering the Back Office

The Back
Office Revolution has strong roots within the Industrial Revolution. In the
late 18th century, manufacturing changed drastically. Machines performed more
manual functions for people. Connected, engineered assembly lines completed
tasks cheaper, faster and more consistently. Rather than leaving workers on the
street, the first Industrial Revolution helped to build cities, provide
high-quality, affordable merchandise and, overall, raised the standard of
living for people everywhere.  

Now there’s
a similar shift for employees in the back office. Businesses can no longer
waste their employees’ time on manual data entry and syncing up tedious
processes. For example, a company may need to manually transmit large amounts
of data on sales, inventory and other critical details to a main office. This
procedure may require a number of staff to work long hours to gather, collate
and compare critical data for reports. By replacing the manual procedures with
automated processes, critical data such as stock and sales information stay
consistently current and accurate. Employees are now free to devote their time
and resources to more value-driven, higher level tasks that would enable
further innovation within the organization.

The
new, automated back office will ensure that disparate applications, platforms
and technologies work together efficiently and accurately. Automation
eliminates the risk of human error inherent in labor-intensive, manual tasks. Take
the financial close process, for instance. There are many vulnerable steps throughout
it that can lead to inaccuracy of data and inconsistent audit trails. To avoid
these susceptible holes in the accounting process, companies need to automate
their financial processes from a single platform for control that offers
immediate reconciliation and notification of any inconsistencies across the many
systems within their infrastructure. Business and IT leaders can then manage
these issues by exception—rather than manual oversight. By automating financial
tasks that are prone to human error, organizations can prevent inconsistencies
and keep all accounting processes predictable, consistent, auditable and timely.

Make the new back office a reality

So why aren’t we seeing more
businesses implement process automation now? Some misconceptions that have held
IT leaders back include fears of the costs of implementing automation,
uprooting existing technology infrastructures, and long lead times. First and
foremost, long-term investment in automation increases output while reducing
costs. Typically the return on investment is much greater and delivered faster
than any other kind of process improvement. Secondly, the purpose of automation
is to expand on the power of your existing enterprise applications – this
approach does not require new hardware or software, and nor does it need an
extended period of implementation.

In
reality, not automating is more
costly and difficult to maintain. There are greater risks associated with
maintaining the status quo. The shifts we are seeing in the back office are
driven by the convergence of demand, approach, and technology. Today, all
companies across every industry are held to growing standards of accuracy,
speed, and accountability. Shareholders, regulators and customers are no longer
forgiving of errors or slippage in service. Companies need automation to stay in
line with market and compliance expectations.

So
where do you start? When considering how you would automate your back office,
think incrementally. Start by examining your existing infrastructure for holes
and opportunities for automation. Depending on what existing tools you may or
may not have in place, your organization may be at different levels of
efficiency in different silos, departments or locations. Some areas may lack
documentation or standardization while others are fairly advanced, with some automation
and documentation of processes in place. Once you’ve examined where you are
now, you can develop a plan to gradually tackle more specific process
weaknesses with automation. The goal is to achieve excellence in all stages of
your back office processes and deliver the quality and consistency required to
support your entire business.

The
same intelligent engineering and standardization mindset that transformed the
manufacturing and design processes in years past is now being applied to other tasks
in business. The organizations that unlock the full potential of their back
office through process automation will be the most competitive in this new
technological era.

About the author: Tijl Vuyk founded Redwood Software in 1993
and as the CEO, is responsible for setting the company’s vision and worldwide
business strategy.