Gu Feng: Interpretation and prospect of data middle office, business middle office and management middle office

On June 6th, the "Information Technology-Driven Industry Financial Change" Summit Forum and the Press Conference of the Top Ten Information Technology Selection Results affecting Chinese accountants in 2021, jointly sponsored by Shanghai National Accounting Institute, ZTE Xinyun, Yuannian Technology, Inspur Group, Yonyou Group, Kingdee Group, etc., were successfully held at Shanghai National Accounting Institute.

In view of the five major information technologies selected by 188 experts that have the potential to affect Chinese accounting practitioners, the forum invited five guests to conduct in-depth analysis from the connotation of information technology, development trends, possible products, possible application scenarios, learning suggestions and other dimensions, and through forward-looking discussions, look forward to the way and scope of impact on accounting practitioners. In this regard, Gu Feng, an expert in this selection activity and vice president of Bailian Group, made an interpretation and introduction to the data middle office, business middle platform and management middle platform.

The concept of business middle office, technology middle office, research and development middle office, financial middle office and so on, all of which are derived from the foundation of data middle office, which comes from the Internet, especially the mobile Internet, and has gradually developed so far.

Looking back at the development history of the mobile Internet, we can find some basic lines, the first to apply Internet technology is the news media industry, such as Sina, NetEase. Later, it gradually developed into e-commerce, then to the financial and commercial retail sectors, and finally to the manufacturing sector. It can be seen that in the application of mobile Internet and digital technology, it is developing from the early short supply chain industry to the long supply chain industry. Supply chain or industry chain is very short industry chain, the time requirements for market response is not high, when the entire industry chain is applied digital technology, the original support for the background operation of the enterprise needs to adapt to the market response in time. When enterprises expand the industrial field, in the face of flexible and changeable markets, how to support enterprises in the face of the market by the traditional back-end organization and business processes is a problem raised by the development of the mobile Internet to enterprises.

The development of the Internet has narrowed the distance between people, and now many original B2B enterprises have gradually transformed to B2C, the most typical representative of the automotive industry, from dealer model to direct sales. In the process of transformation, due to the relative solidification of traditional organizational structures and processes, the stylized system cannot better support the C-end model, and the concept of middle office came into being.

The concept of the middle office is equivalent to the gearbox, the change of the market is a large wheel, the enterprise background is a small wheel, the big wheel and the small wheel are not snapped together, and the market is changing, the entire operation of these enterprises is a relatively fixed speed in the forward, how to do? The middle needs a middle platform, equivalent to a variable speed mechanism, according to your needs, according to the front-end needs to cooperate with you, connected to the enterprise back-end. The concept of middle office we are talking about is probably such a basic idea.

The middle office has the following basic characteristics: First, the rules must be unified and clearly defined. Second, the middle office provides modular packaging services. The third is to share common services of various departments. Fourth, once the middle office service is established, it can be repeated continuously. Fifth, the middle office service is not solidified, and can be continuously expanded and optimized with accumulation and continuous reuse.

The final development of the middle office is still the front desk to the background, the middle office is proposed because the traditional back office is relatively fixed, the flexibility is not enough, the use of the middle office to connect the front desk and the background. From the perspective of the final development direction, it must be the backstage and the middle office unified, and the enterprise operation will be restored to the front desk and the back office, but the future background can directly adapt to the development of the front desk. In the process of transformation and development of each enterprise, with the expansion of scale and enterprise organization, including the expansion of the market, the back office will rise to new heights.

The external situation has brought a very large impact on financial management in the construction of middle office, customer experience and market competition, rapid changes in business, products and services, and the services, data and analysis provided by finance itself need to be provided to users at the fastest speed. Today's finance is faced with massive amounts of data, including internal and external data, structured and unstructured data, and traditional finance only measures things that can be reflected in monetary form. However, today's analysis of enterprise management and development and decision-making, not only rely on data measured in currency, but should think about how to measure resources reflected in management reports, so that managers and decision-makers can make more scientific decisions based on data analysis. Enterprises have developed and grown to a certain scale, diversified operations, a variety of business models coexist, and finance needs to analyze each format, including profit composition, management costs, budget formulation, etc., to support business management. For enterprises managed across regions and across borders, how to reduce costs while maximizing the use of resources and support the development of enterprises in multiple regions is another financial challenge. In addition, enterprises need to evaluate the management efficiency, management analysis, rolling forecasting, and business processes of the enterprise based on financial analysis and data, so that decision-making can be better forward-looking.

The requirements for the construction of financial middle offices require great attention to the following points. First, the height, whether it is the construction of the financial middle office or the construction of other middle offices, it is necessary to have a unified strategic planning and pay attention to how to connect with the business and the outside world. The second is the intensity, the construction of financial middle office needs to break down departmental barriers and the original organizational system, reduce the management level, and develop towards flattening. The third is depth, and the construction of financial middle office needs a deeper ability to integrate industry and finance. A good financial middle office must have a deep understanding of the business of the enterprise, and the financial personnel, especially the financial personnel involved in the construction of the middle office, need to pay close attention to the business they are engaged in. Fourth, abstraction, the construction of financial middle office requires knowledge precipitation and comprehensive generalization ability, abstracting the commonality of various complicated businesses, and forming a common service. The middle office construction methodology is to simplify complex problems, standardize simple problems, standardize standard problems, and iterate on process problems.

In the past, the decision-making of enterprises was more based on experience, how to make decision-makers in enterprises have a basis for decision-making, how to make organizations based on massive data to enable organizations to develop better through the analysis of human behavior and the analysis of enterprise business, according to better logic or better procedures, and through the construction of financial middle offices, enterprises can develop better.

(This article is based on the audio recording of the speech at the "Information Technology-Driven Industry Financial Change" Summit Forum.) Source: Shanghai National Accounting Institute)