Back office administration manages non-public facing departments, including administrative, clerical, technology support, and data management. It supports the front office, which interacts with customers. Companies can manage back office operations in-house, remotely, or outsource to save costs.
Back office administration is the management of a company’s departments that do not interface with the public. The makeup of a company’s back office depends on the underlying industry, but typically includes administrative and clerical services, technology support, and data management. Typically, a company hires employees to manage its back office processes at its headquarters as an integral part of its operations. A company can use a different management strategy and set up their back office operations in a remote location or outsource part or all of their back office needs to another company to save money.
Management analytics breaks down business operations into front and back office systems. The front office consists of all departments that interact with customers, such as sales and support. These departments are part of the front office because they present the face of the company. Back office operations drive the front of the business and provide support, primarily to the sales effort, but also to manage the staff and resources needed to stay in business. Administrative support, accounts receivable and information technology are examples of departments that make up a company’s back office.
The different back office operations must be managed properly to ensure that they continue to support the front office. Back office administration is the process of managing these operations so that they achieve business goals and objectives. Typically, each back office department has its own manager, but the entirety of back office management may fall to a dedicated manager or even a company’s director of operations or other chief executive. For example, a college might have a physical plant manager and a janitorial services manager who report to a vice president of operations.
Advances in technology and the globalization of job markets have expanded the functional options for dealing with back office administration. Now, companies can choose to offload the back office operations to a remote location that has cheaper labor and resources, under their own administration or outsourcing all or part of the back office to a specialized company. Typically, this type of remote back office administration is located in developing countries. Treating back-office administration in this way allows a company to achieve cost savings and a certain type of operational efficiencies as it no longer needs to be concerned with business operations that are not part of the core revenue-generating processes.
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