Back office typically means all the back-end operations of a company. This term originated from times when the building of organizations had a typical front office to incorporate the sales teams and other staff that interacted with customers directly. Back office therefore meant all the manufacturing, developing and administrative activities of the company and the staff working in the back office would not interact with customers directly.Although back office operations are usually not given a lot of consideration, they are a major contributor to any business. Back office operations are like a soul to a body. Large amount of data needs to be stored by organizations which typically eats into the core business activities. If companies outsource processing of non-core but sensitive and critical data, it reduces costs, increases profitability and delivers greater core value and operational excellence.
Back offices are a part of Business Process Outsourcing (BPO). They include Information Technology departments that maintain telephones, networks, accounts, computers, human resources, operations architecture, administration and other support functions. These tasks are often supported by back-office systems: secure e-commerce software that processes company information (e.g. a database). A back-office system keeps a record of the company’s sales and purchase transactions, and update the inventory as needed. Invoices, receipts, and reports can also be produced by the back-office system.In banking, the Back office includes a heavyweight IT processing system that handles position keeping, clearance, and settlement. In legal and para legal areas back office operations include research, report writing, deposition summaries and most common legal duties for lawyers and other legal experts. Legal operations are typically time consuming but with Back office services speed can be accomplished to centralize daily activities and information, client and case management, document preparation, research and billing. Such ease of legal operations can ensure a smooth functioning of legal firms.
In investment firms, the back office includes the administrative functions that support the trading of securities, including record keeping, trade confirmation, trade settlement, and regulatory compliance.
In sales, the back office typically plays a key role internally, providing support to the sales force for administrative duties such as legal, finance, marketing, order management, operations support, etc. as well as customer facing roles typically positioned to include functions that support customer order fulfillment and duties involved with readying customer-support call centers.Data analysis and entry is an important area of expertise that helps boost the performance, competence, and increase the productivity of an organization. A quick support for data analyzing or large-scale data capture, claims processing or any other business outsourcing services can be accomplished by a back office operation.
Back offices may be somewhere other than the headquarters of a company. Much of the time they are in areas and countries with cheaper rent and lower labor costs. Back office functions can be outsourced to consultants and contractors in any country.