Business operations are undergoing a sea change of disruption caused by many factors.

First, globalization has created markets and demand for almost all products purchased online and delivered by global systems to anywhere for anyone.

Second, labor skills and costs are now distributed around the world, so customer support and administrative activities are now performed by a qualified and educated workforce around the world.

Third, technology has advanced to a point where old traditions of business processes and management are being displaced by information and insights becoming available to owners in real time and on mobile devices. It’s changing the structure of how business organizes.

Back office operations are a bright example of how technology has changed to empower more effective business performance.

Historically, information delivery and financial reporting evolved, led by technology:

1960’s & 1970’s – Time of “Big Iron” – large mainframes used to process information.  Required cooling rooms and raised flooring to support process.

1980’s – Mini-computers evolved.  Smaller versions of “Big Iron” needed less space and used more flexible software written for the platform.

1990’s – Personal computers developed and early networks created, using internal wiring and low bandwidth connection to process data.

2000’s – Networks of personal computers developed, with smart devices to manage them “on-premise”, beginning the need for IT support staff.

2010’s – “Software as a Service“ (SAAS) processes developed to replace on-premise networks.

The stage is set for current business practices to move to SAAS based models as an advance in effectiveness and efficiency.

Benefits of this shift are:

1. Less To Manage – replacing networks equipment, internal applications, and IT staff reduce the management stress of ownership and let the company focus on core revenue activities.
2. Fewer Moving Parts – without diverse activities to manage, owners can focus on profitability drivers vs. administrative support activities.
3. Less Costly – as technology and outsourced processing replace internal equipment, licensing applications, network administration and IT staff, total costs of operation decline.
4. Virtual Access – SAAS based models use any browser connected device for input and output available anywhere, anytime by browser connected devices.

Why outsource this activity?

1. Use of experienced professionals that are trained and skilled at SAAS platform and its effective functions.
2. The consistency of services prevents worry and management of internal people turnover and retraining.
3. Insights developed to assist management in real time management decision.
4. Financial management discipline added to the management process.  Roles and duties of provider include periodic review and development of action plans for improvements added to recurring management activities.

In summary, the business world has changed for the better.  Companies embracing and integrating these changes will rise above their competitors and succeed in an ever-increasing competitive world.

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About The Author

Stephen Gross is a big picture thinker and connector, with 40 years of rich and diverse experience in the C.P.A., business consulting, and venture capital worlds. Steve was an early adopter and evangelist of cloud-based accounting, as well as the concept of a virtual C.F.O. or Controller as a method of outsourcing the position in small businesses and startups. Steve brings his extensive experience as an entrepreneur, board member, and business advisor to his role at TCFOS. Learn More About Steve…