Back office administration is the management of the departments of a business that do not interface with the public. The composition of a company's back office depends on its underlying industry but often includes administrative and clerical services, technology support and data management. Ordinarily, a company hires staff to manage its back office processes at its headquarters as an integrated part of its operations. A business can use a different management strategy and set up its back office operations at a remote location or outsource some or all of its back office needs to another company to save money.
Management analysis divides business operations into front and back office systems. The front office consists of all of the 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, mostly to the sales effort but also to manage staff and the resources needed to stay in business. Administrative support, accounts receivable and information technology are examples of departments that comprise a company's back office.
The different back office operations must be managed properly to ensure they continue to support the front office. Back office administration is the process of managing these operations so they achieve business goals and objectives. Typically, each back office department has its own manager, but the entirety of back office management can fall to a dedicated manager or even to the chief operating officer or other chief executive of a company. For example, a college might have a physical plant manager and janitorial services manager who both report to a vice president of operations.
Advancements in technology and the globalization of the labor markets has expanded the functional options for handling back office administration. Businesses can now choose to spin off back office operations to a remote location that has cheaper labor and resource inputs, either under its own management or by outsourcing all or part of the back office to a specialty company. Typically, this type of remote back office administration is located in developing countries. Handling back office administration in this way enables a company to achieve cost savings and a certain type of operational efficiency, since it no longer has to worry about business operations that are not part of the core processes of generating revenue.
