Back office system. What is a back office? What is a back office, in simple words

The concept of a back-office system is firmly entrenched in the retail industry. This is the tool that allows you to consolidate and align all business processes. In the battle for shoppers' wallets, the checkout - the front-office - is the front line. The back office, which provides the command, is the back office - the company's trading system, covering all processes in the store - from ensuring sales to analytical reporting. Whether the store owner turns out to be the winner in this battle depends on how it will correspond to the tasks facing a particular enterprise, and how efficiently it will work.

There are different systems

I must say that today the term back office itself is somewhat vague. In the West, this is meant as a management component softwareand accounting. In Russia, due to the specifics of “national accounting”, software suppliers for stores tried to move away from it, and the back office is often understood only as the part that is responsible for managing business processes. In addition, there is a separation of back-office and head-office, the first is the trading program installed in the outlet, the second is the head office system of the chain of stores, which manages the trading programs of individual objects. Meanwhile, many systems assume that the head-office is also a back-office, that is, the trading program installed in the head office of the network directly controls the processes taking place in the stores. And once this term meant just a program for accounting for goods. However, those days are long gone.

As Mikhail Orlov, product manager of the back-office software direction of ATOL Group, noted, a modern back-office can no longer be called just a commodity accounting system:

Nowadays, the back office is a full-fledged one, responsible for all the main business processes at a trade enterprise. A back office system should include inventory control, supplier relationship management, pricing, product preparation for sale, discount, interaction with, implementation of network exchange, production, personnel management and much more. At the same time, despite the completeness of the functional part, the back office should be easy to understand and manage, have a high speed of deployment on shopping facility and have the stability and efficiency of processing various information. An important criterion for a good back-office solution is the support of a large list of commercial equipment.

Despite the variety of tasks, back-office functions are reduced to a few critical points. Here is the opinion of Anton Murzin, director of the consulting agency GKTs:

First of all, the back office should divide the business processes of the enterprise into several separate processes, each of which is performed by different employees with different access rights to information. This reduces the requirements for the qualifications of employees and solves the problem of ensuring the security of working with information. The main advantage of this approach is the ability to make the system as flexible as possible. For example, the most important function of a back-office program is retail price management. This is not as easy a task as it might seem. The price of a product sold separately may differ from the price of a product sold in small wholesale packaging. The price of a product may also depend on what other products are purchased with it. Finally, the price may change when purchasing a product with a discount card and during various marketing campaigns. The trading system must take into account all these points. And not just take into account, but allow the price change to optimize profit. And this is also one of the goals of separating processes. Sometimes the price is included in the item's record card with its description and code, while the trading program loses its flexibility when working with the cost of the item. Product pricing is a separate business process, and to provide all of the above capabilities, it must be separated from the inventory process. It is also important to separate the definition of management policy from the procedures for its direct implementation. Determining the procurement policy is a responsible business, which in trade organization is engaged in leadership with the participation of qualified specialists. Less qualified managers can also execute it, that is, apply the established rules. Likewise, the policy of discounts should be set in the center and executed automatically directly at the checkout.

The second most important task of the back office program is to reflect what is happening in the store with inventory. On commodity stocks Several processes affect: these are the supply of goods, sales, return of low-quality and unsold goods. An accurate reflection of the situation in the store is created due to the consolidation in the trading program of information about goods obtained from several sources: from cash registers, data collection terminals in the warehouse, etc. In addition, the system must take into account the movement of goods within the enterprise, for example, the presence own production... Further, there are also disregarded “operations” such as theft. That is, the system must take into account the realities and allow the data to be corrected during the inventory.

It is necessary not only to determine which goods were sold during the period - all the accounting programs are able to do this, - says Anton Murzin. - An important characteristic of an automation system is the ability to conduct renal analytics - and in this indicator, various systems differ significantly. Are you talking about a one-time large purchase or a constant demand for this product? Was demand growing or falling during the day? The size of the order depends on the answer to these questions. Whether your system provides kidney analytics capabilities, and if so, how fully is it used - the answer to this question is important for the correct organization of trade flow.

All of the above functions are standard for back-office systems, however, each system has its own peculiarities in their implementation, which determine its compliance with the tasks facing a particular store or network.

Undoubtedly, with sufficiently formalized general operations, each format retail has its own requirements for the back office - says Mikhail Orlov. - For example, for the cash - & - carry format, the dependence of the price category on the quantity of purchased goods is very important; for clothing boutiques, it is very important to be able to keep inventory with the so-called characteristics of goods (sizes, colors). In addition, for example, a discount policy is very important for these formats. A good back office system should take into account all of these requirements.

Chain stores also have special requirements for the system. In particular, such requirements include: the ability of the system to work in real time with remote objects (or the ability to carry out fairly frequent synchronization), the ability to operate offline stores in the absence of communication with the central office, and increased requirements for ensuring the security of data exchange. For example, for this, such a solution is used as a single back office of the chain stores, which stores a database of all retail outlets... This allows you to exclude one link in the trading program, simplifies and speeds up the work. The volume of transmitted information is reduced, because the data comes only from cash registers, and the database on the store's server works autonomously. Security is increased, almost all opportunities to change anything in the central database disappear. But, of course, this approach has its drawbacks, which include somewhat less flexibility.

Market trends

Today the main direction of development in the market of back-office systems is the expansion of functions trading program to ensure complete automation of a wide variety of trade enterprises. For example, there is now a trend towards multi-format retail chains, and software vendors have responded to this need. In particular, this possibility is achieved by using the modular structure of the complex. Moreover, each module implements its highly specialized function, and the customer himself chooses a set of necessary modules. If it is necessary to expand the capabilities of the trading system, additional modules are simply purchased. Another area of \u200b\u200bdevelopment is the need to take into account the emergence of new technologies. In particular, bar-coding is widely used today, but RFID technology is on the way - radio tags.

The main trends in the retail market can be divided into two components, explains Mikhail Orlov. The first is the understanding that automation is needed by everyone, even the smallest retail outlets, the second is the higher requirements for the back office functionality of large retail chains. Speaking about the first trend, it should be noted that the owner of a small store has much more operational work and the cost of an error is very high, and sometimes critical for the entire business. If for the owner of a large commercial enterprise the main task is strategic management and competent delegation of powers, then the owner of a small store has to do most of the work independently. Therefore, the understanding comes that a high-quality management system will be a faithful servant and helper. It is thanks to this trend that almost every back-office developer has solutions for small retail. As for the second trend, for the leader big business there are already few standard back-office functions. There is a need to solve many problems in real time. Therefore, there is a great need for optimizing network communication technologies and for improved data analysis. Considering these requirements, the developers offer new technologies that strive to make the process of solving many problems as efficient as possible, for example, NetHive Aitida technologies, URBD from 1C and others. With regard to our developments, a separate word must be said about the technology of Aitida NetHive. This technology can significantly speed up the process of data exchange in chain stores and significantly save on investments in automation for any retail network enterprise. Many chain stores are interested in implementing this technology.

In conclusion, there are a few more points that are important when choosing a back office system.

You need to understand the main thing: no high-tech automation will help if there is no clear organizational structure and systems approach to the implementation of business processes - advises Mikhail Orlov. - And when choosing a back-office system, try to install it and do standard operations (arrival, revaluation, unloading at the checkout). Already at this stage it may become clear how the system suits you.

According to Anton Murzin, the system should be modern and ensure the functioning of the business for the next 7-10 years: this is its minimum service life. Therefore, you should not put your business at risk by choosing a solution, life cycle which is coming to an end. Easily scalable and scalable - these qualities are also required for a business-oriented system.

The crisis, which has led to the complication of obtaining loans, can become an engine for the development of information solutions in trade. The current situation forces companies to think about the efficiency of use working capital... Solve the issue of increasing efficiency without having a comprehensive information system, impossible.

"Commercial equipment in the Urals" No. 3/2009

37.9

For friends!

reference

Back Office - a branch that exists in banks, investment companies and other organizations that transacts on the market valuable papers... Such an organization can number from three to fifteen people. It depends on the volume and turnover of the back office. The back office works in accordance with regulations Federal Securities Commission (FCSM). Accordingly, each specialist in this department must know and strictly observe these requirements.

Description of activities

The activity of a back-office specialist is the documenting and support of the transaction, which is concluded by traders (exchange trading specialists) of counterparty companies (front office). IN russian companies back office specialists are engaged in the purchase of securities from individuals.

Wage

average in Moscow:

Labor responsibilities

The back office specialist maintains a transaction log. Draws up contracts for the purchase and sale of securities of a certain issuer. Under the concluded agreement, he re-registration of securities, that is, the transfer of property rights from the seller to the buyer. Draws up a transfer order when concluding an agreement or directly in the register of securities. After re-registration and receipt of a document confirming the rights of the new owner to the block of shares (extract), the back office specialist controls the settlement process of the buyer's company with the seller company.

Features of career growth

A back office specialist can take the position of a leading back office specialist with a career growth perspective to the deputy head of a department.

It is not difficult for us to imagine what work in an office looks like, even if we ourselves have never had such an activity. However, as globalization grows, new previously unknown English terms come to us every day, the meaning of which is not always clear. Therefore, today we want to help you understand the terminology associated with office work, namely, what a back office, front office and middle office are.

What it is?

A front office is a division of a firm in which employees are more likely to work with clients, customers or customers than to perform service and domestic business functions.

Depending on the focus of the company, the front office performs various jobs... So in financial companies this structural unit is responsible for sales and trading, in banks - advising clients, opening and closing deposits, obtaining loans, in insurance companies front office is the direct conclusion of contracts for insurance services.

In the back office, things are different. This department employs internal regulations, business management, administration. This also includes a customer support service, a vacancy and employment department, internal business accounting, IT, analysts, data accounting of past years.

The back office supports the work of all departments of the organization. Employees here do not have direct contact with customers and buyers and do not perform work related to the clientele, but are engaged in those activities that allow the company to work in the proper mode.

The middle office is the link between the front and back. This department usually does not communicate directly with customers, but performs direct verification and processing of transactions related to external contacts of the company. For example, in a middle bank, the office is engaged in checking credit history, entering information into the database.

The Middle Office was created to fill the existing information gap between the front and back divisions.

Where did the name come from?

It is easy to guess that the terms are of English origin. Front translates to "front", back - back, and middle - middle. The name of the front office is due to the fact that this department is the first one with which the client contacts, that is, it is closest to him, ahead of all other structures of the company. The concept of a back office appeared back in the days when the plan for the construction of an office building provided for the presence of premises for direct contact with people - the front of the office, and the administration and warehouses, the production part were in the back. The so-called room servicewhere only company employees could go. Middle office - middle, middle, since it is located between the back and front departments in terms of its importance, but it is not at all necessary that this department should be physically located between the above-mentioned front and back structural unit... It is possible that middle office employees will share working room with a back office, but mind your own business.

Comparison of work in the back, front and middle office

The back and front offices are the opposite of each other. The front office is the face of the company as it communicates directly with customers. They are constantly in sight, the future success of the company directly depends on their competence and entrepreneurial spirit. Working in the back office is in the shade. The employees of this department are not seen by clients, they are not known by sight. However, it is this department that deals with the well-being of the company, internal regulations. The front office, back office and middle office perform different functions. The leading office is engaged in increasing the speed of work with buyers, guests or clients, instantly registers the transactions made for buying or selling, and is responsible for the safety of the information received and its authenticity. The back office, or back office, is engaged in analytics, including analyzing the transactions performed and the profit made, is responsible for preparing prices for goods, fixing these data in the database, working with pricing, controlling the movement of goods in warehouses, deciding which internal purchases are necessary for the firm. The tasks of the back office include the preparation of documentation for completed transactions that were made by traders or front-line managers.

A middle office is defined by the following basic roles:

Product quality control;
Legal department;
Treasury Department;
Management of risks.

The division between departments usually occurs at the software or hardware level. There may not be a clear line between them - the border passes only at the level of the system of concepts. However, it is important to separate the work in the back office and the front office at the managerial level and psychologically. The management team should be aware that in the department responsible for the internal affairs of the company, the work of professionals, specialists with extensive experience is needed, because they are entrusted with more responsibility and complex tasks.

Many leaders belong to back office or the middle office is mediocre, relying on the front-line soldiers, who are responsible for the success of transactions through direct contacts. However, the importance of internal units must be adopted for the following reasons:

The back and middle office staff are responsible for maintaining the firm's reputation. So high quality service maintenance customers, phone calls on support issues say a lot about the company and often greatly change the attitude towards it.
Risk control is the responsibility of the middle office. The management team makes decisions based on data, figures, calculations and documents that come to them from offices, so their accuracy is important. Average office count possible risks and prevent losses that the firm could incur.
The Legal Department prevents an organization from accidentally taking actions that are contrary to applicable government law.
Thanks to the accounting department, the internal affairs of the company are always in an orderly mode and not a single expense leaves the database.

Of course, it should be understood that all divisions are equally important. In this article, we managed to make out the features of the front, back and middle office. Based on this analysis, it became extremely clear that for the correct conduct of business, it is necessary to have a clear division of responsibilities, when each employee and each department performs their task, and in the aggregate, a single uninterrupted operation of the organization is obtained.

In the financial environment, you can find many different terms, the meaning of which is unknown to most people, especially lay people who do not have any specialized knowledge in the field of finance. Our topic today is the back office. What is it for, what does this term mean and how exactly is the back office used in modern financial transactions? It is to these questions that full and detailed answers will be given.

The back office is a special operational and accounting unit that is engaged in ensuring the work and functioning of various divisions (departments) that are involved in the management of the company's assets and liabilities, as well as carry out activities in the financial markets.

What is the main task of the back office? The main mission of the back office is usually called documentary and electronic registration (as well as support) of transactions in the financial markets, which are concluded by dealers (also called traders) of the front office. In addition, other participants in the financial markets are also involved in similar transactions. Moreover, a back office is also needed in order to support analytical (internal) transactions between various departments of the company during the operation of the system for the redistribution of financial resources.

The back office is usually located at some distance from the main office of the company, namely, where the office rental price and cost work force significantly lower. This is necessary in order to save and optimize all financial costs. In addition, in some cases, back office functions may be performed by other organizations. Also, the back office can be given almost entirely to the so-called "outsourcing". This is also done to save time and effort for headquarters staff. Significant financial savings can also be achieved in this manner.

Back office and front office

Back office and front office have a lot in common. For a better understanding, it will not be superfluous to familiarize yourself with how the back office and front office interact with each other.

So, the front office is most often used to denote the departments that deal directly with clients and customers. Here, the interaction between the back office and the front office plays a special role, because the latter must have only fresh verified data, otherwise customers who receive inaccurate information can easily go to competitors.

Usually front offices can receive information directly from the back office, but this is not always the case, especially when it comes to large companies.

It is not uncommon for the concept of front office to be used as a contrast to the concept of back office. The fact is that some people understand the functions of the back office exclusively as providing support activities, however, the functions of the back office (as well as the front office) can be incomparably broader. In some cases, another term is used - middle office. It denotes divisions and departments that are busy checking and processing various transactions from customers.

The importance of back office in the financial market

As you know, on the financial markets there is nothing more than the mobilization of capital, as well as the provision of loans and the implementation of various exchange and monetary transactions + the placement of funds in the production of any product. It is the combination of supply and demand for funds of lenders and borrowers from different countries and states that forms what we call the financial market.

The back office plays a vital role in the functioning of the entire system of the world's financial markets.

Back office and capital market

The capital market is another field for the back office, because the capital market is one of the constituent parts of the financial market. It is on this market that the so-called "long money" circulates. Long money is cashthat circulate more than one calendar year. With such a long period, the need for a back office increases many times over. Also in the capital market there is (in some way) the redistribution of free money supply, as well as their investment in any profitable financial and economic assets.

It should be added that the forms of circulation of financial resources can be very different. In each case, the back office plays a role.

Summing up, we can note the high importance of the back office at modern market financial services... Unfortunately, in some countries, the importance of the back office is still underestimated, but this trend is gradually coming to naught, because it is quite obvious to any competent financier that the back office is a reliable tool for leveling various kinds of risks that can threaten financial well-being even a thriving company.