The recent years have seen organizations driven to explosive changes ranging from shifts in consumer expectations to rapid advancements in supply chain management. The general response by organizations has been to embrace front-office-focused digital solutions including enhanced customer digital experiences. However, the benefits reaped by effective use of digital channels for forward-facing operations are short-lived without parallel digital transformation activities in back-office operations.

The need for back-office modernization

Back offices remain the central repository for information regardless of the origins of the information chain. Data from forward-facing systems is also routed through back-office processes to information silos. Back-office transformation builds processes which have a fast upward impact on the bottom line. Benefits include:

• Reduced processing errors
• Enhanced operational efficiency
• Employee development
• Simplified implementation of compliance standards
• Increased organizational agility
• Improved service quality

Roadblocks to back-office digitization

A digital-savvy culture across both front and back-office is a must-have in 2022 and for businesses to truly adopt this trend it is imperative to remove or be aware of the obstacles. Every organization will have different challenges to navigate during their back-office digitization journey. The most common ones include:

1. Legacy Technology – Businesses hesitate to shake the back-office status quo in fear of the costs involved in replacing or updating legacy technology platforms.
2. Resistance to Change – The organization’s leaders are the drivers for a successful digital transformation journey. Lack of clarity in vision and mission can lead to resistance to change at managerial/supervisory level.
3. Talent Challenge – Technology is forever evolving at a fast pace and without fostering a continuous learning environment, organizations are unable to adapt to changes in the environment.

Areas to focus on

Ensuring standardization and consistency across systems helps with building systems that last.

1. Cloud-first approach – Devise a strategy where the infrastructure is developed keeping in mind cloud deployment across all areas.
2. Scalability – Requirements for processing power will change over time. For example, apps may be required to run faster as a business expands. Subscription-based services offer the opportunity to scale up or down to adapt to an evolving business ecosystem.
3. Enterprise systems – Make the mindset shift towards enterprise systems instead of proprietary solutions to the different back-office areas. Not only will this lower costs in the mid to long term, it will have the added benefit of easier upgradation and standardization.

Takeaway

Modernization of back-office systems is a long-term activity requiring a consistent strategy across the board and close involvement of all stakeholders within the organization. While all organizations will have a different starting point and different challenges to navigate, the journey will be rewarded by a modern, scalable and adaptable back-office infrastructure to support business expansion and growth.

References:

Your Guide to Back-Office Operations & Processes | Verint

Back-Office Digital Transformation Best Practices | ISSI (issi-online.com)

Digital Transformation of back-office | Transform your Business (corporatemodelling.com)

Nine Roadblocks (And Solutions) To Accelerate Business Friction Modernization (forbes.com)

Overcoming the Roadblocks to Successful Infrastructure Modernization | CIO