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This article was contributed by Ed King, founder and CEO of Openprise.
We’re all familiar with the concept of the front office and back office. The front office typically consists of customer-facing functions like sales, marketing and customer success, while the back office consists of human resources, legal and finance.
The middle office is an established concept in the financial services industry that consists of operational teams handling risk management and the IT needs of the front office. Empowered by the explosion of software-as-a-service (SaaS) solutions, high-growth venture-backed technology companies have created their version of the middle office.
I’ve noticed the companies that scale successfully often have a high-performing middle office, so it’s worth understanding how it works. This article will examine what makes a successful middle office for a high-growth technology company.
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The many faces of the middle office
The technology industry’s version of the middle office had a humble beginning as marketing operations and sales operations. Marketing operations started with the adoption of SaaS marketing automation platforms like Marketo and Eloqua, while sales operations started as system support for SaaS CRMs like Salesforce. Both of these ops teams emerged as a result of being early SaaS adopters.
SaaS made it possible for each line of business to procure, deploy and run its own technology stack. These ops teams support the front office with people, processes, data and the technology required for go-to-market needs. In recent years, these ops teams have grown more sophisticated and now handle data management, process automation, integration and analytics.
The adoption of middle office capabilities has expanded to other departments, and we’re starting to see the emergence of customer ops, people ops and finance ops. The pioneering marketing ops and sales ops are now transforming into a more integrated unit known as the Revenue Ops or RevOps team responsible for delivering visibility and improving efficiencies across the revenue process, driving revenue predictability, and ultimately achieving revenue growth. If you consider that sales is revenue-generating, and finance is revenue recognition, RevOps, then, is revenue enabling. This team is the face of the technology industry’s middle office.
Why do you need a middle office?
Those unfamiliar with ops teams — including RevOps teams — may question the need for a middle office. Isn’t that what IT’s for? While the middle office increasingly performs IT-like functions while actively adopting best practices—like establishing a Project Management Office (PMO) — the reason we need it is that it fulfills a business need that’s proven challenging for IT to deliver effectively.
Keeping the go-to-market machinery of the front office running requires many processes be executed daily, including but not limited to:
- Adding new leads into the CRM.
- Routing leads to the right sales rep.
- Handling channel deal registrations.
- Ingesting channel sales data.
- Managing orders.
- Handling sales team personnel changes.
These processes combine automation and manual tasks, and often require human decision making. Most importantly, when these processes stop working, the business stops generating revenue. Increasingly it’s the RevOps team from the middle office that owns these processes and maintains responsibility for “keeping the lights on.”
The front office of a fast-growing technology company is a messy and fast-changing environment where the go-to-market strategy and execution can change as much as three times a quarter. To cope with this, the best marketing and sales teams adopt an agile execution mentality, where they embrace experimentation and learning from failures—where ideas are validated quickly and opportunities explored before the competition gets there first.
The middle office also needs to build processes, data, and technology fast—based on highly uncertain input, then iterate it with the business users in an agile manner. Within this context, the only constant is change, and from my experience, you usually have only 20% of the required input you need to execute.
Use data to provide insight
Every go-to-market team wants to get a leg up on their competition. These days that means using data to get insights. For example, they may use attribution analysis to understand which marketing campaigns and sales plays produce the best results, or score accounts and contacts to ensure the sales team invests in the buyers most likely to convert or determine the buyer’s journey patterns that nurture a tire kicker into a hand raiser.
Today the front office is inundated with multiple new data sources and technologies that can provide a business with an unfair advantage, while on the flip side, it can waste valuable resources, and sometimes cause analysis paralysis.
The best middle office teams effectively leverage data and technology to deliver high value to their go-to-market teams.
Critical capabilities for the middle office
Given the middle office’s charter and challenges, it has to operate very differently from IT. However, it needs to partner with IT to get the infrastructure support it requires, while shielding IT from the day-to-day business gyrations and uncertainties that it’s not designed to handle. A world-class middle office team should have the following organizational capabilities.
An agile mindset
IT takes three to six months to do a project and every change goes through a change management process that can further lengthen the time to a workable solution. To enable the business effectively, the middle office needs to operate at 10x that speed.
It should adopt the agile development methodology that product teams have long embraced, to develop a minimum viable product (MVP) or prototypes quickly, enabling the go-to-market team to test and provide feedback to enable rapid development of the next iteration of the solution.
While it’s vital to build for the future and no one wants to throw away work, the fact is: many of the initiatives the middle office is asked to support are transitory in nature. Even for long-term projects, the initial design and ideas often have significant gaps, so plan to deliver a solution that works today while building with an eye on the future, and be ready to tweak it.
Ability to build safely and securely
It’s hard to be agile if the only options available to the middle office are duct-taping together point solutions or custom coding. Both options are too rigid and fragile to keep up with the changes in a high-growth company. While, yes, you can code anything, custom code is difficult to maintain and change.
The optimal technology platform provides a sort of “innovation sandbox” to the middle office so they can not only build quickly, but safely too, and without interfering with shared data and infrastructure, or running the risk of ruining the system of record, while also meeting all security and compliance mandates.
No-code and low-code
To enable agility, the middle office needs no-code and low-code platforms that make it easy to build and iterate solutions quickly and transform ideas into execution. Middle office team members are usually technically savvy but aren’t programmers, so they need easy-to-use technologies that offer extensive flexibility.
Create scale with automation and self-service
Besides the ability to move fast and keep up with the business, the middle office needs to build scale into the business, which means three things:
- Automation: Automation is key for a business to achieve scale. Automation can add speed, efficiency, and repeatability to most go-to-market processes. And, as more businesses build out their middle office, it will make the already tight job market even tighter. Making the most out of the team members you have and keeping job satisfaction high requires automating repetitive work that requires no human input.
- Self-service: Automation is hot and people love to talk about it, but you can never eliminate humans completely from most business processes. So if you focus exclusively on automation, you’ll still be unable to achieve scalability because the inefficiencies of human tasks and interactions become the bottleneck. Enabling self-service is a critical part of achieving scalability because it helps to maximize the speed and efficiency of human tasks. Whether it’s enabling a field marketer to instantly load a list of leads scanned at a tradeshow, or enabling a sales rep to quickly build a list of invitees for a lunch-and-learn event—if the middle office can easily create self-service solutions, it can create scalability by democratizing safe and compliant access to data, remove the operations team from doing gatekeeper tasks, and improve business user efficiency.
- Enable the mass: Scalability is not just about speed and feed. It’s also about how many people within the organization can create and maintain the automation and self-service capabilities discussed above. If only three people in IT are capable of doing that, they become the bottleneck to achieving scalability. But if 30 people from the middle office can create and maintain these automations and self-service solutions without an engineering degree, then we’ve achieved true organizational scalability.
The way forward
The middle office may not be a sexy idea, but most essential things in life are not. The people, processes, and technology that enable us to move efficiently through our everyday lives are often transparent to us, especially when done well. SaaS has created a fundamental gap between the need of the business to move fast, be agile, and react to uncertainty vs. what the IT team is able to provide. The middle office is a critical team that bridges this gap and gives a fast-growing business the ability to execute its ever-shifting go-to-market strategy. As technology and data continue to evolve faster than ever, no company can remain competitive and achieve scalable go-to-market without building out a world-class middle office.
Ed King is founder and CEO of Openprise.
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