Answer # 2

            The consolidation and centralization of the back office functions such as logistics, warehousing, purchasing and all the other related information functions at the Spanish Institute of Small Retailers would bring significant cost savings and impressive efficiencies (LLC, 2013). However, it would not be easy for INEPT to create a back office function by adding back office employees. This is because the gap between the front office and the back office operations will first need to be bridged since both operations are of different environments (EY, 2014). First of all, we will identify a number of advantages for the implementation of the proposal for creating a centralized back office operation at INEPT.


            The advantages that would be realized by INEPT after the implementation of the centralized back office operations would be as follows:

Shared Service Centers: The shared service centers would be created after centralization of the back office operations and this would help INEPT to provide the non strategic roles such as payroll and accounting to the entire organization.

Quality of Service: The expectations of the customers are met with more depth and once these functions would be centralized, then the organization would become agile and it can then freely grow without worrying for the expenses of extension or re-invention of back office functions.

Better Customer Experience: When the centralized back office operations would be created and then connected with the front office operations, then all the employees would get multiple locations access to all types of the real time information. This would enable INEPT to decrease the handling and the processing time and improve the rate of customer problem resolution.

 Process Expertise: Many operations are essential for small businesses to operate but they do not have a direct impact on productivity such as billing functions, payroll, warehousing etc. Therefore, when INEPT creates its centralized back office function, it can outsource it to the industry experts. This will eliminate the compliance worries of the company and also economies of scale.


            The barriers for the implementation of this proposal would be many. Most important are listed below:

  • First of all, the back office operations usually deals with the routine and the manual work tasks and it does not require any contact with customers. Work Item is the primary product; therefore, specific people with such skills would need to be hired.
  • The back office employees have different types of tasks, which require different periods to complete the work. However, it might be difficult to estimate the amount of required working hours or number of employees to be hired. If these are not correctly determined in advance, then backlogs would occur when the staff would be overloaded with more work at the end of the months.
  • If INEPT does not introduce software solutions in the back office operations, then there are high chances of underestimating the inter-departmental impact of these operations on the entire organization.
  • Finally, since INEPT is a business focusing on small retailers only. Therefore, it might not be feasible and economical for the organization to outsource its back office operations. However, this could then have additional burden on the company and deviate its attention from the core functions at INEPT................
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