Shared services centers struggle to remain relevant
I enjoyed seeing many of you shared services, outsourcing, and transformation professionals at SSON’s SS&O Week. I remember in the 90s how shared services centers (SSCs) were the rage in corporate America. The opportunity for a company to eliminate redundant functions, people, and technology systems truly held its promise. Now fast-forward to today. SSCs are struggling to sustain their business value primarily due to operating the business on traditional cost-reduction models. To win, SSCs must deliver differentiated value in an agile and flexible way. How?
Organizations that adopt innovative approaches can begin to deliver value in a whole new way. Digital technologies and intelligent automation (IA) are changing how SSCs run core business functions. Our recent study reveals that IA can help companies reduce costs by 15%, while the rich insights surfaced by analyzing the data generated by automation can deliver revenue increases of 10%.
Consider three ways that SSCs are being reinvented to run better and run differently:
1. Optimization: Turning simple execution into intelligent automation
Most mature SSCs employ automation, such as invoice recognition and expense processing, but much manual work is still required. SSCs can go much further by adopting intelligent software that uses artificial intelligence and machine learning, also called IA.
IA augments and extends uniquely human capabilities with intelligent software to optimize process execution and deliver superior business results. Rather than replacing scripts, macros, and workflows, IA operates existing ones as virtual robots, mimicking human actions and interacting with multiple systems, just as a human would. For example, in an insurance claims process, IA can collect required documents and handle claims within defined boundaries, while an employee focuses only on the complex cases involving exceptions.
IA can spur huge improvements in not only cycle times and productivity but also revenue growth, as organizations can harvest the rich process data generated by IA initiatives. For more on this topic, see our white paper “The Robot and I: How New Digital Technologies Are Making Smart People and Businesses Smarter by Automating Rote Work.”
2. Value+: Shifting from contextual services to core service support
SSCs typically focus on contextual business functions, such as finance and HR, rather than core functions such as sales and R&D. Organizations can deliver greater value when they refocus their outputs on core functions, while simultaneously containing the costs associated with contextual processes that deliver little business differentiation. Once contextual work has been centralized, standardized, and automated, the SSC staff is free to focus on tasks that drive value.
Harvesting data is a key driver in this pursuit. Digital technologies offer ways to interpret data and create insights to offer these new services. Or, using smart knowledge-management systems with machine-learning capabilities, the SSC could automatically respond to service-desk tickets and incidents or prevent them from being registered by suggesting solutions based on experience.
3. Globalization: Moving from local to global shared services
SSCs must find ways to increase their service offerings, both geographically and functionally. Two tactics to consider are delivering added value through agility (e.g., faster implementations when changing or adding services) and creating a more uniform way of interacting with users. The more geographies and functions the SSC covers, the more value it can derive from the intelligence collected to support core services.
To enable a global portfolio, SSCs need to be able to adapt to different time zones, cultures, and user group sizes. Global collaboration and communication are essential. For example, social and mobile solutions bridge the gap between the SSC and all global users by introducing new ways to run processes end-to-end and exchange information across different business units spread across multiple geographies. Additionally, cloud solutions enable a scalable process architecture to help customers start small and grow, as well as customer-friendly pricing models that create cost transparency and flexibility.
In conclusion, as digital technologies and intelligent automation rapidly mature, we believe organizations must quickly adopt and master them. By doing so, SSCs can begin to compete aggressively, like the rage in the 90s, in this evolving digital economy.
Our latest whitepaper on How Digital Can Accelerate the Leap to Value and Added Differentiation provides more commentary on how shared services will survive the digital era.
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