Back office DX refers to using the latest digital technology to transform back office operations. Through transformation, we will improve operational efficiency, reduce costs, improve productivity, and improve customer experience.
Even if it does not directly generate profits, the back office indirectly supports the front office. If you can streamline back office operations, you can expect benefits such as cost reduction and productivity improvement.
This is why “back office DX” is attracting attention.
In this column, we will introduce key points and examples of back-office DX initiatives.
table of contents
- What is back office DX?
- The importance of back office DX
- Challenges in the back office
- Key points of back office DX
- Back office DX success story
- summary
What is back office DX?
Back office DX refers to the transformation of back office operations such as human resources, general affairs, and legal affairs by utilizing the latest digital technology. In other words, it is an initiative that aims to improve operational efficiency, reduce costs, and create new value by utilizing data and digital technology.
Back-office operations involve many routine tasks and individualized business processes, and delays in digitalization have been an issue.
Through back-office DX, we aim to resolve issues faced by back-office operations and improve operational efficiency and productivity.
The importance of back office DX
As you know, business competition is intensifying worldwide, and the environment in which companies find themselves is becoming increasingly harsh. To maintain or increase competitiveness under these circumstances, it is necessary to increase the efficiency and productivity of the entire organization.
For example, automating tasks can reduce the risk of human error and reduce labor costs.
In addition, remote work has become popular due to the coronavirus pandemic, but it can be adapted if the back office is digitized. Since business can be carried out regardless of location, it becomes easier to expand globally.
Furthermore, if the back office is run efficiently, the quality of the front office will improve, which in turn can lead to an improved customer experience.
To survive in the increasingly intense competition, it is important to work on back office DX.
Challenges in the back office
Various factors impede efficiency and digitalization in back-office operations, such as labor shortages, the persistence of paper-based analog operations, and individualization of operations.
Compared to the front office, which directly generates profits, recruiting and expanding back office staff tends to be a lower priority. As a result, back offices are chronically understaffed.
Due to the lack of manpower, the manpower of each member is required, which increases the workload. This increases the likelihood of negative effects such as increased overtime pay and human error.
Additionally, when only a specific person in charge performs a specific task, tasks become individualized.
In addition, in back-office operations that involve a lot of document processing, there are still many cases in which analog work using paper and stamps continues, resulting in operational inefficiency.
Back-office DX can improve the inefficiency of such back-office operations.
To learn more about back-office challenges, check out the articles below.
Key points of back office DX
When tackling back office DX, keeping the following four points in mind will lead to success.
small start
Back-office operations are divided into multiple departments and cover a wide variety of areas, so it is difficult to convert all operations to DX at once. Therefore, we recommend starting small by tackling tasks (departments) with the highest priority.
Priorities should be determined by considering the importance of the business, the scope of impact, the effects of DX, cost-effectiveness, etc. For example, accounting and human resources are important operations that are directly connected to corporate management, and DX conversion can be expected to have a great effect, so they are given high priority.
Once the initial departmental or operational reforms are on track, we can gradually expand them while utilizing the feedback from successes and failures in our next initiatives, which is expected to minimize risks and maximize effects. can.
Utilization of the Ministry of Economy, Trade and Industry’s “DX Promotion Indicators”
In July 2019, the Ministry of Economy, Trade and Industry announced the “DX Promotion Index” as a tool to harmonize the perceptions of those involved in DX promotion, such as executives, business departments, DX departments, and IT departments.
This index was designed to objectively evaluate the progress of DX, and by using it, you can understand what issues are facing your company’s back office operations and what goals you want to achieve through DX. It is now possible to clarify what is happening.
There are three main ways to use the DX Promotion Indicators, depending on the phase of the initiative:
The first is as a tool for “shared awareness and enlightenment” that aims to share awareness among those involved in DX and stimulates discussion on future directions. The third part is used for continuous evaluation and progress management after the action is taken, to discuss what actions should be taken to achieve the goal and lead to actual action.
By using the “DX Promotion Indicators” as a guideline for back-office DX promotion, you can set appropriate goals and take effective actions to solve issues in your company’s back-office operations. Sho.
Cooperation with existing systems
When working on back-office DX, the newly introduced digital technology can be linked with existing systems to achieve benefits such as consistency and unified management of data, further improvement of operational efficiency, and stronger compliance. I can.
However, if the existing system is legacy or the cost of linkage is high, it is better not to force everything to link but to gradually strengthen the linkage or interpose an API in between. Sho.
Regular effectiveness measurement and improvement
As recommended in the aforementioned “DX Promotion Indicators,” after working on back-office DX, it is important to increase the maturity level of DX by regularly measuring and making improvements.
Technology and the business environment are constantly changing, so even once successful, continuous improvement is necessary. Additionally, new challenges may arise due to changes in business needs, regulations, market environments, etc. By continuing to improve, we can respond flexibly to these changes.
Effectiveness measurement and improvement are essential to ensure the success of back office DX. Regular measurement and improvement allow you to assess whether your project is meeting your goals and make necessary adjustments.
Back office DX success story
Lastly, we would like to introduce some examples of actual back-office DX initiatives that achieved results.
Significantly reduced the work time required for expense settlement for approximately 8,000 employees (Nitori Holdings Co., Ltd.)
Nitori Holdings Co., Ltd., which owns Nitori Co., Ltd., which operates a furniture retail business, and Shimachu, a major home improvement center, has had to fundamentally change its expense management method due to an increase in the number of employees associated with rapid business expansion. It is said.
With the previous expense settlement system, all expense settlements manually entered by applicants had to be visually checked by superiors or the accounting department. Various rules were imposed to prevent fraud and violations, as well as to ensure equality, making the checking process complicated, and the company had approximately 8,000 employees. Also, due to manual input, there are many errors in payment. The remand rate was reportedly over 10%.
Therefore, to improve convenience for employees and strengthen governance using digital technology, we introduced “SAP Concur Solutions” including “Concur Expense”, an expense settlement and management cloud.
Reduce the input burden by linking data with corporate cards and QR code payments, automating regulation checks, and utilizing expense management templates within the group, including Shimachu Co., Ltd., which newly joined the group in 2020. He is said to have promoted standardization of operations.
As a result, we achieved a reduction in work time of approximately 46,000 hours (estimated value) per year.
The company’s efforts were awarded the “Cloud Adoption – SAP Concur” category at the SAP Japan Customer Award 2022.
Improve operational efficiency using Kintone as a base system and improve the quantity and quality of communication with customers (Solon Co., Ltd.)
Solon Co., Ltd., which operates a real estate business in Saga Prefecture, has been promoting the use of IT since 2011 to improve the quality of its services through efficient business reforms. Following this trend, we also worked on DX, developed a business management system using Kintone, a cloud service for building business applications, and improved the quantity and quality of communication with customers.
Furthermore, this system has succeeded in streamlining not only internal operations such as back office operations but also communication with customers (sellers) and other real estate companies.
In the beginning, the company’s DX staff did not have on-site experience, so they were unable to understand the work content, flow, problems, etc. When systemizing, the requirements should be unified, but the execution content differed depending on the project, or departments were confused. It is said that the system could not be built because many parts of the business flow were not one-way.
However, we introduced consulting from an escort support company to promote human resource development, and the general manager who knows the field within the company and the DX Promotion Division thoroughly discussed “what we want to do” and clarified the requirements for improvement. That’s how I got through this.
Specifically, business management across multiple departments can now be completed on the Kintone app, making it easier to check progress, and things that were previously dispersed across multiple tools and analog management are now integrated into Kintone. It is said to have achieved results such as reducing costs and improving ease of use and management, automating the calculation of various performance figures creating URLs to save property data, and shortening administrative work time.
The company’s efforts were also selected as an excellent example of the Ministry of Economy, Trade and Industry’s DX Selection 2023.
Automating expense checks reduces the number of refunds by approximately 70% (Pentel Co., Ltd.)
Pentel Co., Ltd., a major stationery manufacturer founded in 1946, was having issues with expense settlement.
This is because the company’s expense checks are complicated; for example, even if you take one per diem, even if you visit the same place if you leave in the afternoon, it will be cut in half, and if you pay for the meals yourself, it will be cut in half. If there is no money, 1,000 yen will be deducted, and if you come back to the office after 8:00 pm, 1,000 yen will be added. After checking, if there is an error, the request will be returned, but the number of such requests is large, reaching 50 per month.
In response to this current situation, not only accountants but also employees who make applications have requested improvements.
Therefore, we introduced an imforce/expense settlement solution on the common system platform intra-mart. With the implementation of the allowance navigation function, the corresponding allowance can now be calculated by selecting options according to the text on the navigation screen without having to do manual calculations, and the number of returned cases has been reduced to one-third compared to before.
Achieved real-time processing of back-office operations that used to take several weeks (Aeon Ibis Co., Ltd.)
Aeon Ibis Co., Ltd., which handles the development, maintenance, operation, and consulting of IT infrastructure and systems for over 300 companies in Japan and overseas, also provides integrated services such as shared services for human resources and accounting.
The company has been using intra-mart for a long time to quickly respond to human resource information management, human resource development, mergers, and company spin-offs among the back office operations used by more than 350,000 employees across the Aeon Group. We have decided to update the version.
In the Aeon Group, which has many business types, it is difficult to standardize all operations, and there were also problems with the system to meet the unique requirements of each company. We chose to take advantage of the strengths of intra-mart, which has flexibility and expandability that can be expanded to
Approximately 40 improvement items were completed in just 8 months by the user department and vendors working together. It is said that this has led to not only improved operational efficiency and reduced manpower hours but also data aggregation and expanded data utilization.
By building the “New Human Resources Integrated System,” for example, it is now possible to check in real-time the aggregation and aggregation of personnel evaluations for each store, including part-time workers, which used to take several weeks. Realization has been achieved.
The efficiency of back office operations with RPA Reduces approximately 1,500 hours of routine work per year (Nakano Construction Co., Ltd.)
Nakano Construction Co., Ltd. is a construction company with a 100-year history in Saga and Fukuoka prefectures. At the company, mainly in the civil engineering division, we have introduced and utilized one-man surveying equipment, electronic blackboards for organizing and sharing construction photos, i-Construction, and remote viewing using web cameras and network cameras.
As a back office DX, we introduced RPA at the management headquarters and automated 90% of invoice entry work. As a result, we succeeded in reducing routine work by approximately 1,500 hours per year, which is approximately 30% of back office work.
Furthermore, in-house RPA study sessions are now held regularly by employees with the skills they have acquired, and they have been able to create an environment where they can learn independently.
summary
By realizing back office DX, we can reduce costs and man-hours, adapt to flexible work styles, and help solve the “2025 cliff” problem. Success will help maintain and strengthen competitiveness in an increasingly competitive business environment.
However, DX cannot be achieved overnight and must be approached from a long-term perspective. Based on your company’s situation, make a reasonable plan and execute it.
DX requires cooperation from management and back office personnel.
For DX to be successful, understanding and cooperation from management and back office personnel is essential. Explain the purpose and benefits of DX and promote it while gaining cooperation.