The CFO'S Perspective

Increase Profitability through Back Office Improvements

improve your back office

Back office operations are not always glamorous, but they are some of the most important daily functions for a company. Back office areas like IT, accounting, finance, HR, compliance, legal, and administrative activities work behind the scenes, making up the backbone of a company’s brand promise. Despite being non-customer-facing, the back office portion of an organization is every bit as important as the front office (which is made up of departments like sales, marketing, and customer support).

As such, investing in improving your company’s back office can result in both internal and external wins. Internally back office improvements can increase employee retention and enhance the workplace culture, while externally these improvements can boost profitability and revenue.

But with so many areas falling under the back office umbrella, uniting them under a single set of improvement initiatives is a difficult premise.

Typically, when senior leadership decides to improve their back office, they task middle managers to focus on individual areas, looking for ways to integrate new technology or streamline processes in their respective departments. And while there is certainly value in things like upgrading technology solutions and formalizing processes, improving your back office should not simply be a total sum game where small improvements are added together to demonstrate an overall improvement gain.

Instead, back office improvement should be approached with a broader framework in mind that strategically examines and aims to understand:

Current Processes

Before you can find “a better way” to do anything, you need to know how it is being done now. Therefore, the first step in any back office improvement initiative is understanding current processes:

  • Analyze the buyer journey a new customer takes to determine what is needed at each step and how the company is meeting those needs. Take these customer requirements and analyze how they can be streamlined and enhanced, increasing speed and value to exceed customers’ expectations.
  • Figure out where there are knowledge gaps that prevent employees from doing everything that should be (or could be) included in their roles and determine how you will bridge those gaps to get the most out of your current teams.
  • Determine how each area of the company contributes to the organization’s brand promise to its customers and helps achieve short and long-term business goals. Find out if employees understand the kind of individual impact they have on the company’s overall mission. Look for areas where transparency can be improved to give employees and teams a greater sense of purpose and motivation to do their best work.
  • Investigate which practices and processes have been formalized and whether they are being conducted according to those formal plans. Understand what still needs to be formalized and what needs to be updated to reflect current operations.
  • Look for opportunities to create trust by improving business integrity in a way that is meaningful for your customers.
  • Focus on your main differentiators to further increase your competitive advantage.

Employee Contributions

Employees bear improvement efforts on their backs, which makes them a key factor in any improvement plan. Utilize employees in a way that plays to their strengths to not only improve the likelihood that back office improvement efforts will succeed, but also achieve organizational buy-in among employees who might otherwise be reluctant to lend their talents.

Ask for feedback and genuinely listen to it to gain a deeper understanding of the kinds of frustrations they experience in their regular activities. Give them a voice in the process so they feel like they are better understood, and their perspective is truly valued.

Take employee contributions into account when determining the value of an employee to avoid losing your most valuable contributors to turnover or headcount reductions.

Value Add

Focus your improvement efforts primarily on value-add tasks, weeding out repetitive and mundane tasks that just add more back office work. Allow your employees to focus on critical thinking and innovation instead by removing tasks like scheduling meetings and making travel plans from their to-do lists. Virtual assistant services like Prialto, Time etc., and MyTasker allow your top talent to do what they do best instead of getting bogged down in a quagmire of back office tasks.

Aim to overcome limitations, barriers, and bottlenecks throughout your most critical processes. Outsource or automate menial tasks that must be completed but do not require a specific skill set to accomplish.

Potential for Automation

Always be on the lookout for places where automation can streamline operations by saving time, money, and physical resources.

Accounting is one area where companies commonly use automated solutions to improve efficiency. Examples would include billing and invoicing tools like, Concur, or Expensify.

For areas where there is significant documentation, evaluate technology solutions that cut down on electronic or physical document storage to reduce the amount of file storage capacity your company will need to maintain. Opt for cloud-based technology to give employees and teams access to real-time information and resources without the lag that accompanies sharing information on a one-to-one basis.

However, when incorporating any kind of technology or automation solution, always do your research to understand what kind of risk is associated with doing so. Then, weigh the benefits against the risks and look for ways to minimize any associated risk.

Continuous Improvement Efforts

The most successful companies understand that back office improvement is not a one-and-done kind of process. For improvement initiatives to stick and make a difference, they must be cyclical.

The continuous improvement process is a never ending loop of examining, changing, and evaluating. This is a difficult realization for some managers because it requires an ongoing commitment to redesigning what is not working and refining what is, instead of just checking the box and moving onto the next thing. Subsequently, executive buy-in is critical for maintaining continuous improvement efforts because it creates a culture of accountability. Without ongoing financial and ideological support from management, improvement efforts will flounder and fade over time, reverting to the “how we have always done it” mindset.  

Improving your back office requires strong financial leadership to oversee continuous improvement initiatives. Whether you utilize fractional CFO services or hire an in-house CFO, get the right personnel in place to drive these improvement efforts.

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