Back-office functions are the behind-the-scenes administration tasks that are usually invisible to the public. They do not tend to get the attention they deserve from elected officials, given that the benefits cannot be easily seen and communicated in the same way as, for example, investment in physical spaces or the excitement of a new initiative.

Officers outside of finance and corporate services, and elected officials, can underestimate how a well-run and integrated back office can be a key enabler to reduce costs, expand local government’s ability to collect, use and analyze data, and enhance customer satisfaction.

Putting the back office front-and-center

Traditionally, the local organization has been designed from a departmental perspective, creating silos and inefficient manual efforts. Organizations have attempted to resolve this through their focus on the front end, digitalizing customer transactions and customer requests – but without innovating back-office systems that deliver the true benefits of front-office changes. This approach simply creates more pressure and demand on the middle and back office to respond to increased ‘electronic’ communication via manual processes.

Forrester research on behalf of KPMG shows that on the topic of ‘seamless interactions,’ just over half (56 percent) of organizations believe their services are integrated within and across departments and the wider ecosystem. Forrester notes that organizations that are better able to execute on objectives spanning the front, middle and back offices are 1.5 times more likely to successfully harness data, advanced analytics and actionable insights with a real-time understanding of the customer and the business to shape integrated business decisions.1

A well-designed back office can help drive true customer centricity, reduce costs and employee manual effort, improve the ability to perform more value-adding activities and analysis, and improve the employee value proposition by enabling them to do more meaningful work. It can also increase the capacity of councils to invest in more meaningful initiatives and reinvest back into the community.

The design of the back office in today’s digital environment should be service-oriented for customer centricity, and its processes and systems should enable rapid, reliable, secure delivery on those objectives. Adopting best practices that are common in other organizations, such as for payroll or accounts payable, and tailoring specific processes that can help make a key difference for efficiency, should be encouraged. Improvement in the back office may, however, be limited without simultaneously investing in the right technology tools and systems, such as chatbots, automated processing and data integration.

Bringing diverse systems together

For back offices to become better at analyzing data, new connections and processes are needed. Linking data on customers can help enhance personalized service and identity management, as outlined in other sections. It can be a challenging task, with some organizations managing multiple records on the same customer – all on separate siloed systems.2

Some core back-office systems, for example finance, asset management and property management, should be capable of connecting to each other. Line-of-business systems will be needed where core systems cannot provide the necessary functionality for effective service delivery, but these should be integrated into the core system to help drive the benefits of a connected enterprise. A holistic, organization-wide approach is therefore crucial for seamless customer-centric service.

An integrated ecosystem creates an opportunity to transform core processes, increase efficiency and productivity, and realize the benefits of robust, real-time data on service and performance. Forging strong middle-office links with front- and back-office processes should will be particularly important in delivering appropriate customer-centric service.

A back office that draws on a range of linked data can make predictions that enhance service. For example, the ability to combine customer demographic data, asset quality or maintenance data, and demand or usage data, can provide valuable insights into the placement of future facilities or where budgets should be prioritized to meet evolving public needs.

In the UK, for example, service-sharing platform oneSource, developed for the London boroughs of Havering, Newham and Bexley, is generating significant back-office savings by reducing management costs and work duplication, while driving efficiency gains by re-engineering traditional processes. It can provide support to HR, finance, payroll, legal, facilities management and IT operations.

A further option is to establish a skills platform of specialists accessible to a subscribing local government, helping the sector to attract talented staff, reducing competition between individual organizations, reducing costs and managing peaks and troughs of activity. Such sharing at present typically involves neighboring areas but can equally work for groups of organizations across a region, state, country or even internationally.

Specialists no longer need to work on-site, and greater use could be made of freelancers carrying out specific tasks. There are challenges to overcome, including prescriptive employment agreements, opposition from unions, and economic development policies that promote local employment, but there is a strong business case for local authorities to make more use of remote expertise.

Key takeaways

  • Local government back-office services should become more customer-centric and outcome-focused
  • Data can help back offices become proactive rather than reactive, treating service departments as customers and helping them solve problems.
  • Sharing expertise, whether through organizations or skills platforms, can help local governments meet the costs of improving back offices. Councils should educate and challenge their unions, update their workforce and employment policies, and build a strong business case for the local benefits of employing remote expertise.


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1 A commissioned study conducted by Forrester Consulting on behalf of KPMG, November 2020
2 A commissioned study conducted by Forrester Consulting on behalf of KPMG, November 2020