Digital back office excellence in growth companies: 5 levers to keep your back office from ballooning

Keeping your back office lean, but effective enough to do its job: this is easier said than done. If you fail to invest sufficiently in your back-end operations, you run the risk of alienating customers. Do your customers need to claim back the money from an unpaid bill or reimburse a customer for a disputed transaction on an e-commerce site? Your back office has to be able to handle these types of inquiries quickly and efficiently, regardless of how large your company becomes in the meantime.

Here are 5 levers to keep your back-end operations teams lean, but effective in your growth company:

1.Let your back-office enable the customer experience, not hit siloed KPIs. Excellence in back office operations means performing in terms of customer journey KPIs. If the answer of your back office teams on a chargeback request was mediocre and requires multiple interactions with the customer, your back-office team might have focused too much on siloded KPIs such as first response time or back-log. What matters is that your team takes the whole customer journey into view: When we formed a joint customer service and back-office team to improve the customer journey experience for chargebacks, the team was able to boost both efficiency metrics, i.e. first response time and resolution rates, by 20%. Here is a description of a management approach which takes customer journeys to heart.

2.Ensure performance transparency on your ticket flow. Picture the flow of tickets in your back office as a sequence of water tanks. In the chargeback example: Your first water tank is for tickets from unauthorized transactions flagged by the customers. Until they are resolved, this is your backlog. When a team takes the ticket from the backlog, it enters the next water tank and becomes an active open ticket. In this stage, the team will process the ticket, e.g. by checking if the chargeback is valid or not. When the decision is made, the ticket flows into the third water tank, allowing it to be directly resolved with the customer. In each case, the back-office job is to empty each water tank as quickly as you can without spilling a drop (see the graph below).

Here are the questions you should be asking yourself when working to empty your water tanks:

• Are you quick to respond and resolve? Possible KPIs: Tickets with open status (backlog); first response time; resolution time per ticket
• Are you efficient? Possible KPIs: All active open tickets per process; all active open tickets by age, e.g. 1–6 days, 7–14 days, 14+ days; tickets closed per FTE
• Are you delivering quality? Possible KPIs: Accuracy rate per process, internal quality score per process
• Are your customers happy? Possible KPIs: Average number of contacts by customer per process; customer satisfaction scores per journey

Be sure to discuss these KPIs with your back-office team leads every day and as part of an overview with your operations leadership team in your weekly performance review. For a discussion of operational efficiency principals which is both fun and insightful, see “The Goal: A Process of Ongoing Improvement” by Eliyahu Goldratt and Jeff Cox.

3.Drive down ticket inflow with self-service and end-to-end process automation. To prevent your back-end operations team from ballooning with your customer base, you need to invest in automated self-service. When we compiled our automation agenda, we found it helpful to rank our back-end operations processes according to time spent (or FTE-saving potential), regulatory impact and (direct) financial savings. You’ll then find two types of processes to automate: 1. self-service features that leave customers happier while saving costs, e.g. in-app chargeback submission; 2. “pure” internal process, e.g. dunning and collection services to recover money from customers with outstanding bills. The by-the-book solution is to fully automate from end to end to reduce tickets for the back-office. An example here would be to introduce an automated dunning cycle per customer rather using a Google spreadsheet to send out individual customer emails manually. Still, not all companies have the tech they need to do this from the outset, so you may need to have your tech team find a way for your back office to send out emails to a group of customers in just one click. “Throw-away” solutions like this can be the difference between a response time of two weeks or two days.

4.Boost your back-end throughput with the perfect hattrick on capacity, processes and organization. There are three aspects to boosting throughput in your back office. One: keep ticket handling capacity in line with your needs. Re-forecasting ticket volume on a monthly basis and aligning FTE demand closely with the in-house recruiting teams is of essence here. Alongside this, you should outsource tasks that are simple but relatively difficult to automate (and are therefore laborious), e.g. digitisation and classification of mail. Two: make process excellence a priority. That means clearly defining performance KPIs for each process and ensuring the team leads work towards them, e.g. via daily check-ins. Team leads are also responsible for updating and upgrading workflows in your knowledge base (four-eye case reviews, etc.). Three: build centers of excellence around customer journeys. Repetition of processes by the same staff leads to higher efficiency and fewer errors. And you can get even more performance improvements with a combined front-end and back-end operations team. When a team is integrated, it can act as an autonomous unit, which optimizes your knowledge base, corrects non-working sub-processes, and ensures shift capacity when unforeseen volume peaks appear. After reorganising in centers of excellence with accountability for entire customer journeys, we observed improvements of at least 20% in first resolution time and customer experience scores.

5.Hire an operations team that can play drums and the blues. In a back-end operations team, you need a mix of drummers and blues musicians. Your drummers love rhythm and resolve large amounts of tickets in an efficient, steady and controlled way. They love to perfect processes until they are flawless. How about a person who likes to hit 100 chargeback cases in a day and then heads off for a cool drink? These are your perfect drummers. Ideally, they have a sharp eye for detail, a perfectionist streak and strong industry knowledge. Meanwhile, your blues colleagues play in your central unit and love to improvise, dismantle processes and put them back together so they perform better. They aren’t there to play the day-to-day rhythm; they’re all about elevating your operations to the next level of art. This means adapting your processes to new products and markets, optimising performance reporting and setting up new training programs.

Customer journey focus, performance transparency, automation to reduce ticket inflow, strong focus on throughput and a team which can play drums and blues: this is what it takes for your back office to stay effective and lean while your company continues to grow and grow.