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.