投行业务部分习惯性分为前台和后台，比如S&T，IBD等就属于前台部门，而OP、FC、Risk就属于典型的后台部门，于此对应的，在实现投行的IT系统时，我们也会有对应的前台（front office）和后台（back office）。但是除了这两者之外，我们还会在中间加上一个中台（middle office）。当然，很多公司会将中后台混为一谈，其实还是很有必要将两者划分清楚的。
今天看到几篇介绍middle office的文章，觉得不错，虽然作者不是针对特定行业进行讨论，但仍有一定的参考价值：
http://blogs.gartner.com/mark_mcdonald/2011/03/30/its-time-to-start-talking-about-the-middle-office/
It’s time to start talking about the ‘middle office’
by Mark P. McDonald | March 30, 2011 | 8 Comments
Many people think of a business as consisting of a front office, which markets, sells and serves customers and a back office that fulfills demand and handles operations. The dichotomy of front vs. back is the basis how we think of everything from compensation structures and rewards (front office) to information systems (back office) and the way we look at reducing organizational costs (primarily back office).
Front office processes are seen as highly competitive, information intensive and customer critical. They are often the sacred processes as changing them opens the company’s revenue stream to risk. They are managed and viewed in terms of their effectiveness, do they get the job done, rather than their efficiency.
Back office processes are highly structured, automated process intensive and need to be delivered with high reliability, low cost and little variance. These are the processes that guard the company’s EBITDA margin and since they do not generate revenue, they are relied upon and measured against their efficiencies.
However not every activity fits neatly into either front or back office processes. There are in just about every organization as set of middle office activities that go un-noticed but may be prove to be more important and either of end of the organization.
Mid-office processes are decision centric, semi-structured and require bringing experience and tacit information together to assess the situation make decisions and mobilize the organization. These processes are not formally recognized or even overtly managed, but they are critical because the decisions they produce and the actions that determine the company’s direction and cost structure.
The figure below highlights the distinctions between and examples of processes found in the front – middle and back office
Its time to pay attention to the middle office as the efficacy of its decisions and actions do more to determine a company’s potential more than we realize.
Mid office processes make decisions that set front office goals and bind back office processes. A poorly functioning mid office requires both the front and back to work harder than necessary to achieve their goals.
Too often we have thought of activities in the mid-office as either being the domain of management or knowledge work that cannot be readily monitored, measured or supported as past attempts have produced behaviors that were counter productive to the goal. Think of the call center person who hangs up to keep their average call time down.
The nature of the mid office is changing as new technologies like social media, mobility and dynamic intelligence make it possible to transform these processes in the same way that we have transformed the company from front to back. This is good news as most organization have squeezed significant cost and inefficiencies out of these activities and they need a new answer as doing the same old stuff – 10% is a sign of weak — almost brain dead -management.
So rather than saying how we can up the sales goals or cut the operations cost, Its time to talk a look at what goes on in the middle, the processes and activities that have to date escaped scrutiny largely because they do not fit into or need model of what happens at the front and back of the organization.
More to come,
Start improving performance by naming your mid office processes
http://blogs.gartner.com/mark_mcdonald/2011/06/12/start-improving-performance-by-naming-your-mid-office-processes/
Start improving performance by naming your mid office processes.
by Mark P. McDonald | June 12, 2011 | 2 Comments
Conventional wisdom thinks of a business as consisting of a front office, which markets, sells and serves customers and a back office that fulfills demand and handles operations. I wrote about this topic about a month ago in the following post: It’s time to start talking about the ‘middle office’
The dichotomy of front vs. back is the basis how we think of everything from compensation structures and rewards (front office) to information systems (back office) and the way we look at reducing organizational costs (primarily back office).
Mid-office processes are decision centric, semi-structured and require bringing experience and tacit information together to assess the situation make decisions and mobilize the organization. THey sit between the front and the back office as shown in the graphic below.
These processes are not formally recognized or even overtly managed, but they are critical because the decisions they produce and the actions that determine the company’s direction and cost structure. Think of pricing, resource allocation, strategy formulation, strategy execution, compensation and rewards, etc. All are semi-structured processes which highlights the following:
You cannot improve something that does not have a name .
Many mid office processes are poorly defined, the first step is to give them a name so you know where to focus your improvement efforts and identify leverage points to influence quality, cost and effectiveness.
- Pay particular attention to areas where you make decisions repeatedly or conduct knowledge based work, or think of things as handled by ad hoc teams.
- Take a hard look at processes deemed to be the domain of management, but have become the domain of committees or cross- functional processes. These are mid office processes that are handled calling a meeting or having a standing meeting.
- IT systems for information and reports can identify mid office processes from the perspective of highlighting people using systems in ways that they were never intended to work. Scanning a list of custom, ad hoc and repeated special reports is one way to identify these processes as these reports feed the type of semi-formal work found in the mid office.
- Identify the major decisions that influence organizational performance, particularly the ones reached via committee or that happen periodically but not regularly.
- Identify the processes involved in making these decisions the resulting impact on organizational performance. Processes where there is not a clear connection are candidates for reform or removal as they are no longer needed or may have outlived their useful life.
These steps give shape to work found in the mid-office by looking at its decisions, information and direction. Create a list and do not worry too much if it looks like a mixed bag of committee’s, special task force, exceptions, loose bits and odds and ends. The work in the mid-office is semi-structured so its natural that it would be difficult to cleanly define these activities.
The key criteria for things being on the list include:
- It is work that you do, even if you do not do it on a regular basis.
- It is work that matters, the decisions, actions or agreements made have an impact on the business, its customers, products, people, suppliers etc.
- It is work that people will remember, you may have to say ‘do you remember when we …” but once introduced people acknowledge the work.
Applying these three criteria will help you focus the list on work that you do, that has meaning and that people can identify. Push things that do not meet these criteria down the list for latter consideration and you now have an outline of the work that happens in the mid office.
Related materials:
Financial Times: Time for a new concept – the Mid office by Paul Taylor
http://blogs.gartner.com/mark_mcdonald/2011/06/19/the-strategic-importance-of-mid-office-processes/
The strategic importance of mid-office processes
by Mark P. McDonald | June 19, 2011 | 2 Comments
The term mid-office refers the collection of semi-structured activities, processes and decisions that exist between your formal front and back office processes. These are the processes and activities that shape your value proposition, operating efficiency and business effectiveness. While mid-office processes can be difficult to name and define, that does not mean that they are not strategic to the enterprise.
Strategic importance rests of a few well-defined principles based on work by Porter, Barney, Teece and others. Simply put a strategic resource is something that is:
- Valued by customers and markets
- Unique to your organization
- Cannot be readily copied by others
- Cannot be replaced by other resources (e.g. substitution)
- Limited availability of substitutes or alternatives
- Provides a basis for differentiating your organization in the market
These criteria form the basis for designating something a strategic – as a basis for competitive or comparative advantage.
The issue is that many organizations front and back office processes no longer meet these criteria. The drive for greater efficiency, increasing globalization, creating ‘ecosystems of companies, advances in communications and technology, and the adoption of global process standards (ISO etc.) have caused a convergence in both the back office and front office as these activities become very similar if not the same.
Increasing similarities across organizations in the front and back office do not mean that these processes are not longer important. No they are operationally critical. But they are no longer as strategic as they once were when they were unique to the organization, not easily copied or replaced, etc.
Executives need to find new sources of strategic advantage based on resources that cannot be readily copied, hired in via a sourcing relationship and the like. Those resources can be found in the space between their front and back office operations – the mid office.
Mid office processes are well positioned to create strategic advantage. These processes are the ones that make decisions concerning the structure, operation, and future of the front and back office. Mid office processes include: product development, strategy formulation, corporate development, pricing, marketing, resource and budgeting, etc. These processes form the dynamic capabilities that change the nature of what happens in the front and back office.
Mid office activities have several characteristics that make them difficult to standardize and therefore difficult to substitute, copy or replace across companies, creating a basis for strategic advantage. They do this by putting people at the center and levering their skills, experiences, knowledge and interests to drive performance.
These characteristics revolve around the role of individuals and their skills relative to their contribution to success of mid office processes.
- Outcomes that are based on individual and group decisions that emerge from how they view the situation rather than applying predefined or automated rules. This makes it difficult to standardize the work in the mid office and therefore difficult to copy.
- Decisions resting on judgment and understanding which places their performance in the hands of the knowledge, skills and abilities of people rather than processes, technology or other systems. These processes are only as effective as the skills of the people involved. Skilled knowledge workers now become a source of strategic advantage.
- Behavioral in their execution as success requires deploying these decisions in the market, among customers and across the company by changing their behavior making change management more than communications and compliance.
- Adaptive due to their semi-structured nature giving mid-office activities a degree of fluidity that can handle changes in market and organizational conditions. Mid office processes have just enough structure to create credible decisions without being so structured to be incapable of evolving to meet new challenges.
Contrast these characteristics with the role of people, knowledge, information and insight in front and back office processes that have undergone major automation and standardization transformations.
Most are familiar with the continued automation, standardization and sourcing of back office processes which have translated unique capabilities into commodity services. Predictability, process and scale are critical factors in the back office based on people performing as a resource input in the process.
A similar transformation is underway at the front of the company. Sales force effectiveness, online stores, channel rationalization and the like have brought stability and similarity to the front office. Call center standardization, sales compliance programs and brand compliance at any cost are symptoms of the operationalization of the front office.
Recognizing the mid-office recognizes a new source of strategic advantage based on the most unique resource in the world – your people, their experience and their knowledge. While people may be standardized through process and compliance at the front and back of your company, they find their strategic role in determining how the organization changes and faces the future. The work found in the mid office.
