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If you’re in senior management at a startup or a midsize tech company, you’re likely bored with and flummoxed by necessary but tedious back-office functions like HR, accounting, and legal. And there’s an even chance that those departments aren’t as effective as they could be. Take heart. Skills you have and processes you know can play roles outside R&D and product development.
When Gigaom Research surveyed senior execs at startups and smaller companies, they told us they’d much rather spend their time on activities where they could contribute the most value to their company. That meant core strategy and growth. In fact, only 14 percent were happy with how they spent their time. They felt back-office operations and maintaining the business distracted from growth.
Applying tech disciplines
Many senior execs at tech companies started in engineering or product development, where they soaked up the best practices illustrated in Eric Reis’ The Lean Startup like the minimum viable product and rapid iteration. In software development, agile techniques proved their effectiveness over the old waterfall, and DevOps drove home the discipline of integrating operations, development, and QA. In his latest report, Gigaom Research analyst Philip Sheldrake sketches out how to apply these tech management techniques to back-office functions, with the objective of making them more responsive to customer needs.
Sheldrake recommends the following:
- Human Resources should adopt concurrent testing techniques from agile development. Resume processing doesn’t have to be a linear process pass-along; rather it should exploit modern communication and collaboration techniques. Another Gigaom Research report suggests that most HR departments underuse social media communications, and might be more effective if they were managed by the CMO.
- Finance can be crippled by outmoded project cost analysis and ROI forecasting practices. Agile’s focus on time-to-market and flexible reaction to changing customer needs promotes radically different cost justification. ROI gets built in by design. Stock market techniques like real-options valuation play a role.
- Legal and Procurement should take lean manufacturing principles to heart. Think of those departments’ processes in the context of reducing waste in transport, inventory, waiting, and over-processing.
We did an analyst roundtable webinar on these topics as well.
Put the cloud to work
Similarly, it’s time to put the cloud to work on the back office. While many organizations are moving non-differentiating IT functions to the cloud, to date they’ve mostly focused on front-office functions like sales, customer service, and web presence. Leading-edge cloud adopters say they’re equally interested in moving significant back-office workloads onto cloud-based applications and services.