5 Ways to Improve Back Office Operational Efficiency
November 11, 2019
While bold marketing campaigns get a lot of attention, back office functions that are just as important – planning, inventory management, supply-chain management, logistics, settlements, regulatory compliance, accounting, etc. – receive a lot less fanfare. That doesn’t mean they aren’t important. These functions must be well executed for a business to be successful, and improving operational efficiency is a key driver for increasing profits in challenging markets.
In a digital world it is increasingly important to take business and process improvements across your business value and supply chains. In fact, according to the Harvard Business Review, businesses in one sector that converted traditional back offices into automated systems, “often generate an improvement of more than 50 percent in productivity and customer service.”
So, how do you improve operational efficiency?
1. Connect your entire supply chain to gain end-to-end visibility. Decisions are often made with partial information because the decision makers only have visibility into certain systems. This can create a disconnect and drive inefficiency. Imagine planning shipments without knowing inventory levels or creating invoices without knowing the status of shipments. Only with a clear understanding – end to end – can you improve efficiency and avoid mistakes. With today’s modern technology, data siloes just don’t make sense.
2. Use real-time data to make smarter decisions based on current information. Waiting for end-of-day reporting makes sense for scheduled meetings, but when making decisions about logistics, inventory management, planning, etc., you will make better decisions with real-time data. Why use yesterday’s information about inventory to schedule shipments when you can query a system right now and get immediate insight into inventory throughout your value chain?
3. Automate everything you can to improve efficiency and accuracy. Use computers to collect and integrate information faster, without the risk of human error. Imagine how efficient billing can be if you automatically track costs throughout the entire supply chain and automatically generate and distribute invoices for customers, suppliers and vendors.
4. Use advanced analytics (AI, machine learning, etc.) to analyze all available data. Advanced analytics provides the power to evaluate real-time information quickly and run simulations in real time to evaluate potential outcomes. By evaluating so much information quickly you can make informed choices in real time, ensuring better inventory management, production scheduling, shipping choices, and more.
5. Integrate with data and systems whenever and wherever possible. Open APIs make integrating with external data and systems easy, so take advantage where you can and create your own connectors if necessary. Eka’s Digital Commodity Management Platform connects to everything from AccuWeather, ICE and Bloomberg to Salesforce, SAP, and Oracle – not to mention integrations with trade repositories to ensure regulatory compliance (including EMIR, CFTC, MiFiD, ICE, and MAR).
Commodity trading companies can significantly increase profits by improving back office efficiency. Working faster, minimizing errors, and improving coordination between departments ensure the business runs more profitably. Modern technology is the key to driving this efficiency, you just need to take advantage of it.
Mary DeFilippe spends her days creating engaging content – blogs, white papers, articles, and more – that helps readers better understand new technology. She can frequently be found walking around the office listening to heavy metal music while pondering ideas for her next blog.