Internal company processes in the back office
The back office and its processes are usually invisible to the customer, yet this area of a company is one of the most important infrastructural facilities. In the back office, the company’s own applications are administered, and tasks from administrative areas such as accounting, warehousing, logistics or personnel management are also handled here. The contrasting aspect of the back office is the front office, which is accessible and usable by the customer. This can be, for example, the counter of a bank or an online store where the customer places orders and makes payments. Data is transferred from the front office via an interface between the two areas, and all customer activities such as orders, messages or complaints are processed in the back office.
Back office and Core business area
In terms of economic allocation, back office and core business areas are delineated. While all administrative activities take place in the back office, the core business area serves to generate sales and new customers. In a retail company, this includes acquisition, marketing and purchasing. All other processes – invisible to the customer – take place in the back office. Today, the administration of a company is based on a multitude of highly developed IT solutions. To ensure the smooth functioning of the software used, employees or even IT support are specifically responsible for the installation and maintenance of the systems used. Those who run their own online store often do not have their own IT support staff, but are still dependent on a well-functioning back office. It is helpful if all processes converge here and the individual IT components coordinate with each other.
Integrating the back office into the online store
Today, creating an online store is no longer a great art, but the smooth running of all transactions is only ensured when all IT components are optimally networked. This applies in particular to the connection between the front office and the back office, as well as to the sensible linking of existing databases such as customer data, article databases, stock levels or price information. Access from the networked back office is secured, a firewall protects the back office connection of the web server and web front end. Anyone planning to set up their own online store can only be advised to do thorough pre-planning with regard to the flow of background processes in the back office and the link to the core areas. Especially when customer inquiries and sales increase, the process flows must be adapted in order to be able to offer the customer consistently high service quality.
Credit Risk Management – an important subarea in the back office
Credit Risk Management (CRM), also known as “credit risk” or “debtor risk”, is a term used in the credit industry. In banking terms, it refers to the risk that borrowers will not be able to repay loans that have been granted. This sub-area is also controlled in the back office and manages the monitoring and approval of loans within the company. In this way, liquidity is ensured, transactions are structured and any stock market activities are monitored.
