What is the back-office and why should I care?
The back office is the non-customer facing, operational areas of a company. These operational areas are typically organized into administrative functions, such as Finance and Accounting, HR, IT, and procurement, and customer support functions, such as account management, transaction/order processing, and industry specific functions such as insurance claims or loan operations.
The back-office has a direct impact on operational costs and customer experience. The more efficient your operations, the lower your costs will be. The faster and more accurately you process the requests of your customers, the higher their satisfaction and engagement.
We’ve written a guide that explains the difference between traditional and modern back offices, including the roles, industries, challenges and benefits of each.
How do I increase operational visibility and control?
Forming a clear picture of your entire back office operation can be challenging.
Walking around the office to visually collect data is no longer feasible with remote workers, social distancing, functional silos, disparate systems, and different processes.
You need a modern way of working so you can effectively manage the work and coach employees to maximize capacity and help them reach their full productivity potential.
Verint Operations Visualizer enables you to gain operational visibility and control. One component of the solution is Verint Application Visualizer, which captures employee application usage, identifying the applications employees use, when, and for how long. By categorizing applications as customer support or production related, and non-production related, you can quickly identify opportunities to redirect employee efforts so they are focused on the right activities.
Learn how a healthcare provider improved employee productivity by 16% with Application Visualizer, part of the Verint Desktop and Process Analytics solution.
How do I improve employee productivity and unleash hidden capacity?
Employee productivity is a sensitive subject. Leaders often lack real-time performance data and instead rely on subjective anecdotal discussions supported by a few metrics.
Tapping into your hidden capacity requires consistent tools, processes and real time visibility into performance trends and reports.
Verint Operations Visualizer includes role-specific scorecards, part of the Verint Performance Management™ solution so you can transform application analysis data into actionable performance metrics.
Employees can see how they are doing against key metrics, adjust their behaviors and attain their performance goals. Click here to learn the most common performance KPIs for back-office operations.
Learn how a digital financial services company improved employee productivity by 13%.
How can I speed turnaround times to meet my service level agreements (SLAs)?
Many back-offices lack a single, real time view into their work, even with a CRM or BPM system.
Are your managers leveraging Excel and email to try and bridge the gap between the work in the core systems, and all the work done manually or outside these systems?
This results in team members either doing only what is in front of them or are waiting for work to be given them. This approach obscures opportunities to maximize capacity and speed turnaround times.
Verint Work Manager enables you to manage workloads in real-time across teams, functions and systems. The solution automates collecting data from disparate systems for holistic visibility. The solution provides real-time, actionable dashboards that:
- Show all work volumes – new, backlog, completed and current work status
- Provide analytics to simplify management processes
- Track progress towards meeting SLA targets, ensuring exceptions don’t get lost
- Help identify bottlenecks and opportunities to streamline processes.
This insight enables managers to balance workloads across functions, ensuring employees are doing the right work, at the right time, in the most efficient way. Click here to discover the most common performance KPIs for workload and operational management.
Learn how Capita how improved turnaround times by almost 90% and increased their NPS score by 40 points.
How do I maximize resource capacity?
It’s great to have visibility into your operations in real-time, but what about the future? Accurately planning for your resource needs can help you ensure you cost effectively meet your demand without negatively impacting service levels.
Verint Back-Office Forecasting helps you build sophisticated supply and demand models that simulate future demands on volumes, service level agreements and resource capacity at the process level.
You can create capacity plans at the team and department level, set hiring plans or reskill employees so you can shift employees to meet changes in demand.
By creating accurate process level capacity plans you can maximize resource utilization and execute work at the right cost. Click here to learn common performance KPIs for capacity and strategic planning.
Learn how the UK’s National Health Services Business Services Authority Pensions was able identify 29% in hidden capacity by simulating and modeling future volumes, adherence to SLAs, and resource capacity.
How do I build a culture of operational excellence?
In many ways, technology is the easy part. Gaining buy-in and changing people’s ways of working is often the greater challenge.
Managers have been working instinctively, relying on their experience and anecdotal evidence to make decisions.
What Operations Visualizer and Work Manager uncover is hidden capacity that managers never realize existed. To capitalize on that potential, managers need a new way of working.
With real-time performance data and Verint’s Principles of Operations Management methodology, you can create consistency in people, process and technology to drive the right productivity. This methodology helps you:
- Operationalization their technology investments
- Incorporate operational management best practices
- Establish a common language and the ability to set common goals
- Create a standard set of measures to ensure a consistent approach.
Learn how a UK energy company improved productivity by 30% and substantially reduced overtime leveraging the Principles of Operations Management.
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Glossary of Back-Office Operations Performance KPIs
Following is a list of common back-office operations performance KPIs. We’ve organized these into three categories:
- Employee and Team Productivity / Performance KPIs
- Workload and Operational Management KPIs
- Resource Capacity and Strategy Planning KPIs
Yet many of the KPIs are used in multiple ways. This list is in no way comprehensive, but intended to level-set our understanding or the key metrics that drive back-office operations performance.
Employee and Team Productivity / Performance KPIs
These are common KPIs that are measured at the employee and aggregate team level. Giving employees real-time visibility into these performance KPIs helps employees see their performance relative to their goals and subsequently self-adjust. While a number of KPIs could be leveraged, best practice is to keep it manageable, focused on driving employee engagement and motivating the desired behavior.
Activity Types:
- Administration Activity is the amount of time that is tracked in desktop analytics that relates to the time spent in applications that are organization applications, such as intranet sites, human resources, and work benefits.
- Communications Activity is the amount of time that is tracked in desktop analytics that relates to the time spent in applications used to communicate with customers and colleagues, such as email, chat, Teams, Slack, etc.
- Idle Time generically is defined as time spent waiting for work or otherwise not performing work-related tasks. Desktop Analytics solutions define idle time as periods of no desktop activity on a computer.
- Non-production Work is activity related to customers and/or the operations, either supporting operational improvements, maintaining operations, or compliance requirements. While it is work related, it is not contributing to the specific processing of a work item. General category for tools that support the business, but not directly related to the processing of work.
- Non-Work Activity is the amount of time that is tracked in desktop analytics that relates to the time spent in applications that are not related to work or the organization.
- Production Activity is the time that team members were focused in applications that relate directly to the processing of work. This is often captured via desktop analytics.
- Recorded or Actual Time is the time when employees provide their input as to when they were focusing on production or non-production work.
Adherence:
- Schedule Adherence Rate is a measurement of how well employees follow their detailed work schedule throughout the day. This level of adherence/compliance monitoring is required for organizations that have same day or hourly deadline goals that will be at risk with schedule deviations. For example, if there are urgent-level prescriptions that require attention a pharmacy tech within an hour, then this is an essential metric.
- Real-Time Adherence is the capability of identifying variances to scheduled time using desktop analytics or employee tracking. Alerts of non-compliance can facilitate/automate course correction in real time, subsequently improving Production Time Compliance and Schedule Adherence Rates.
Earned Hours is considered a fair means in which to quantify the employee contribution of work created for the organization. Earned hours is volume multiplied by standard handle time for each work type. For example, if Mary completed 12 work items that have a standard handle time of 5 minutes then Mary did 60 minutes worth of work. 60 minutes / 60 minutes = 1 hour. Thus Mary did 1 hours’ worth of work. Operations managers and applications will vary in defining and leveraging data relating to earned hours.
- Variation 1: An uplift factor is added to the Earned Hours calculation to reflect proficiency. For example if Mary is new, then it is expected it will take her 10% more time to do the work. The 5 minute time standard per item would be increased by 10%.
- Variation 2: Comparison of earned time without proficiency uplift to earned time with productivity uplift to create another view of how productivity someone is. The benefit of this is data driven details to quantify the value created by the employee if they were fully capable.
Error Free Rate or Quality Score is a % of work completed without errors vs. overall work completed. For example if the team processed 1000 items and 950 of those items came back without errors, then the error free rate is 95%. While this could be also articulated as an error rate of 5%, it is far more motivating to positioning the metric in positive terms.
Error Costs is the monetary cost of errors incurred vs the acceptable threshold as indicated by the organization. In some organizations, this is a critical condition for ongoing employment. For example, if the department goal is to keep cost underneath $50,000, they are seeking to ensure they are in compliance with staying under this ceiling.
Productivity Rate is a fair measurement of employee contribution of work completed by understanding the employees’ total earned time versus the total time planned to be in production work or the total time recorded in production work by the employee. If 30 hours were planned or recorded by the employee for being in production work and the employee earned time is 25 hours, then 25/30 = 83% productivity score. Organizations should not expect 100% productivity rates for employees because of the human need for breaks, common interruptions, perhaps the need to answer a colleague’s question, etc.
Proficiency / Effectiveness Rate is understanding the employees total earned time versus the total time planned to be in production work or the total time spent in production applications. By examining how much time is spent in production applications and the value of the work completed we have a better understanding of their proficiency when in applications. This KPI helps managers identify best practices or coaching opportunities.
Production Time Compliance Rate is a measure to understand if employees are spending the time expected on production-related activity. It is typically calculated by looking at actual time spent in production (recorded or tracked by desktop analytics) / planned production time. This is a form of looking at overall adherence to expected time focusing on production work without having to dig into every moment of the day. For many back offices organizations, especially those not driven by same day or less deadlines, this form of adherence management drives the desired outcome to focus more on production time.
Service Level Achievement Rate – see definition under Workload and Operational Management KPIs.
Workload and Operational Management KPIs
These are common KPIs used to measure, manage and balance workloads across back-office functions to ensure service level goals are met as cost effectively as possible.
Activity Types: See list under Employee Productivity and Performance Goals.
Actual Handle Time is the time it is actually taking for team members to complete work. The source of actual handle time can come from many sources. It is utilized to compare against standard handle times to identify if teams are working to expectations and to support intraday management of team performance. Alternatively, this may be referred to as touch time, meaning this is the amount of time the employee was hands on processing the work.
Backlog is the buildup of uncompleted production work that has yet to be assigned to an employee to action or may be sitting in an employee work queue in an in-process state. Some organizations will include pended work as part of backlog and some will not.
Backlog Aging or Work Item Wait Time is a metric that is a real time indication of how long an unaddressed work items are at this moment waiting in queue ready to be actioned. In contrast, response time is a historical metric that is an indicator on how long wait time could be because it captures that items have been touched where work item wait time does not.
Deadline Goal is used to define the goal for each work item or end to end delivery (some practitioners differentiate by calling this a process resolution goal). It reflects that a work item needs to be complete by a specific date and time.
Duration is the entire time taken to complete an activity from the point in time the employee picked it up to the time that they completed it. This is different from Elapsed or Turnaround Time in that it does not include the time the prior to the employee first starting action on the work. For example, if Mary is working on a case and she starts the work today and then finishes at the same time tomorrow, the duration is one day. In contrast, the touch time may only be 10 minutes.
Earned Hours is considered a fair means in which to quantify the employee contribution of work created for the organization. See employee productivity and performance KPIs for definition.
Elapsed Time or Turnaround Time (TAT) is the total time it took to complete a work item from when it was received – this includes the time it was waiting for an employee to pick it up. This may be defined as a work item having been submitted to action as a task and the completion of the work item in that task. It may also be interpreted as the amount of time a work item has been submitted to action and all subsequent steps in the process until completion. For example, the TAT to complete underwriting on a specific mortgage is 2 days. This is often aggregated at a higher level to understand average TAT for the department to understand performance and opportunities for improvement.
Exception Items are items that were kicked out of straight through processing or automated work completion processes because of an anomaly, missing data, or other variation from the norm.
Pended Item is a work item that has received attention from an employee but is put in a state of pause because additional information is needed from a customer or another party to complete the work.
Process Resolution Goal or End to End Service Goal refers to the promise to the customer or stakeholder of the when they will receive their service or product based on the end-to-end process: from first contact or receipt of the work item in the back office, the work process itself, and final completion of the work item.
Production Work is each work item that must be processed and is tied to a customer deliverable. It is typically transactional, processing, or case related work. It is non-project work, or work that supports special initiatives. Examples include Mortgage Underwriting, Payment Processing, and Health Claim Processing. These all have fees that cover the cost of the work being performed.
Production Volumes are the number of items received/in process/completed. It is often measured at the per work task level, per person and often aggregated up to review individual and team performance.
Quality in the back office reflects the accuracy and adherence to the defined steps and processes to complete work. This can include not just the right work steps, but also leveraging the right supporting tools to complete the work. Quality may be managed proactively though sampling and evaluating, or using just in time solutions to provide guidance to employees while they are in processes of doing work. Often quality issues are tracked and weighted based on the impact the error had on operational costs and customer experience.
Resource Activity is the amount of time that is tracked in desktop analytics that relates to applications that support the execution of work processes.
Response Time is the average time elapsed from submission of the work item until the first touch is produced.
Rework is the work that is returned due to errors or insufficient information.
Service Level Achievement (SLA) refers to the commitment (i.e., Service Goal) that has been made between the organization and customer or stakeholder on how long it will take for a specific work type to be processed.
Shrinkage represents the activities that take up employees’ time where they are not working on production work. Software solutions and capacity models will account for formalize shrinkage activities – such as illness, vacation, meetings, training, and projects to account for capacity planning.
Standard Handle Time is used to support productivity and resource planning calculations, it is a fixed value that is used to convey how much time a piece of work should take to complete. This is sometimes referred to as an average handle time or reasonable expected time. The value of a standard handle time is that it allows a baseline in which to compare the actual handle time rate to and thus identify if adjustments are needed to improve planning, performance, or processes. Standard Handle Time will have a reasonable uplift to accommodate for expected shrinkage.
Throughput or Work Items Completed Volume are the number of work items that that an employee has finished within a given period of time. For example, 12 work items were completed in the last hour or the team averages completing 12 work items per hour.
Turnaround Time (TAT) – see Elapsed Time.
Utilization is how efficiently the back office team is using its resources. It could also be defined as how well skills of employees are being utilized by the organization.
Work Item is a piece of work that needs to be processed. A work item may only need to go through one work task/step when received from a customer or it may go through a multiple steps performed by various employees.
Work Task/Step is one point in processing the work that is typically done by one employee.
Work Process is a collection of work tasks/steps that are completed by multiple employees in order to complete the work.
Work Item Aging is the quantity of time work has been awaiting completion by the employee/team/organization, either overall or at a specific step along the way towards overall resolution. It can also be the overall age of work at point in time completed. This may include or not include backlog ageing depending on the approach taken by operations managers and software applications
Work Items Arrived Volume are the number of new work items received by the department within a specified period of time. This is often used to help with demanded planning and forecasting.
Work Items Abandoned Volume are the number of work items that that an employee started but have not finished, and likely were put back into in the queue to be completed by someone else, or the item is put in pending and then forgotten.
Resource Capacity and Strategic Planning KPIs
These are KPIs that relate to strategic decision making by the organization that relate to capacity strategic planning or improvement efforts in the organization.
Attrition or Turnover Rate represents the portion of employees that leave your company each year
Automation Rate represents the number of automated processes divided by the total number of processes. This is a metric tracked as part of state of the business reporting to help organizations understand progress with their automation initiatives. It is a KPI that should also be presented with value of automation data. For example, there may be 100 processes automated but only 10 of those processes will create 90% of the cost savings. Most strategic leaders will manually track this to ensure the right conclusions and decisions are made with these data points.
Expected Hours is used for generating resource requirements, it is considered a fair means in which to estimate how much employee time will be needed to complete the work. Calculated similar to earned hours, however for a different use case. A simple example, there are 2,000 payments that need to be processed. Each payment standard handle time is 3 minutes. 2,000 x 3 minutes = 6,000 minutes / 60 minutes = 100 hours’ worth of work that needs to be completed.
Forecasted Volumes are calculations by work type, process and function based on historical volumes and performance and anticipated trends.
Time to Productivity or Time to Proficiency represents how long it takes for an average new hire to be fully trained and productive – 30/60/90 days. This is usually measured in weeks or months.
Utilization Factor is an adjustment made in planning to account for the fact employees are human, not robots, and will not be 100% efficient. It is typically used as an uplift factor in capacity planning. Some operations managers and applications called a proficiency factor, and they may even include shrinkage data as part of the overall utilization factor.
Employee Satisfaction Scores represent an employee’s satisfaction with his/her job and willingness to recommend his/her organization as a place to work.
Process Resolution Goal or End to End Service Goal – see definition under Workload and Operational Management KPIs.
Productivity Rate – see definition under Employee Productivity and Performance KPIs.
Service Level Achievement Rate – see definition under Workload and Operational Management KPIs.
Shrinkage – see definition under Workload and Operational Management KPIs.
Standard Handle Time – see definition under Workload and Operational Management KPIs.