The terms “front office” and “back office” are generally used to refer to two distinct sides of the business. Front-office operations and information systems handle prospect- and client-related activities such as marketing, quotation, order management, and customer service. Back-office operations, on the other hand, address order fulfillment and accounting activities.
Back-office processes deal with knowable types of activities because there is a higher level of internal control over such processes. They address questions such as, “How much money did we make? How many units did we ship? What raw materials should we buy?” These questions are largely quantifiable, and even when we don’t know a precise answer, we can make an assumption and proceed from there. Information technology systems such as financial and enterprise resource planning systems have traditionally focused on improving back-office operations.
Front-office processes are much different. Because of the unpredictable nature of customer activities, front-office operational systems pose more control challenges. Front-office application needs have grown rapidly the past few years thanks to advances in Internet technologies. Customers demand access and like to be able to handle many tasks online, such as placing an order, checking on order status, or obtaining service. Customer relationship management and e-commerce applications are a new breed of IT systems that focus on enabling customers to interact with businesses and conduct commerce using the internet.
Getting rid of silos and integrating processes throughout your organization are critical success factors toward achieving higher business performance levels. As such, businesses need to devise an effective strategy for integrating their front- and back-office operational systems. Without such integration, businesses will need to invest in resources to translate front-office data into their back-office systems and will most likely put themselves in a reactive mode. Lack of visibility to front-office data limits operational managers in making optimized decisions in the back end.
Effective integration strategies between front- and back-office operations vary drastically from one business to another. Such strategies heavily depend on the nature of your existing systems, customer requirements and market and competitive realties. Not having an effective strategy in place that can be executed in a well-planned manner will surely result in increased inefficiencies (i.e. higher costs) with potential loss of sales opportunities and decreased customer service levels.
Here is a quick assessment to determine how well you have integrated your back office and front office processes. Ask yourself:
- Can our clients view all their account activities and financial information online?
- Does our sales team have visibility to all client service, support, and financial information prior to their sales and client interactions?
- Does our operations team have updated visibility into quotes and sales pipelines to assist with resource and delivery planning?
- Is our sales and order information integrated into our back office systems in an automated manner?
- Is our management team able to see companywide sales and operational information in an easy to use, updated, and integrated manner?
If you answered “no” to even a few of these questions, your organization could stand to make some improvements to its integration. If you are not sure where or how to begin, or you would like to learn about back-office and front-office best practices, simply reach out and we would be more than happy to assist.
Sassan S. Hejazi can be reached at Email or 215.441.4600.