INTERVIEW OF THE MONTH
INTERVIEW WITH Mr. Ramesh Ramakrishnan,
Global Business Services and Shared Services –
Director & Centre Head, Future Pipe Industries
How do you believe shared services of the future will look like? What will they deliver beyond providing a fixed portfolio of scale services?
Shared services is maturing: Large businesses are increasingly using shared services models to support a range of functions. As shared services mature and modernize into a new generation of integrated business services (IBS), evolving business models are creating more value for enterprises. With simultaneous growth in revenue, reduced operating expenditure, and streamlined management, shared services modernization will radically alter the corporate world. Four trends are driving shared services’ modernization as businesses shift their attention to operating models, process workows, and talent development. These trends are Integration, Governance, Digital, and Geography and Sourcing.
Optimization: The shift from simple to smart process execution (i.e., better services).
“Value-ization:” The shift from “contextual” service execution to “core” service support (i.e.new services).
Globalization: The shift from a local or regional service offering to a true global service offering and/or from offering single to multiple services (i.e., more services).
What are shared service organizations doing to deliver game changing performance from their shared services? Is there any change in terms of preparedness that you’re seeing now versus say five years back?
Five key areas where shared service organizations are continuing to invest in game changing delivery are as follows:
- Increased focus on predictive analysis
- Continued expansion of higher value services
- Multifunction integration and globalization
- A renewed focus on talent management
- Increased self-service and cloud solutions
In terms of preparedness; today’s shared service organizations are continuously applying standardised and automated services, where organizations can maintain a laser like focus on costs, while mining data for value. There is an ever-increasing use of advanced analytics to process data towards driving process improvement, reduce risk and reveal a new source of revenue for staleholders. In my opinion, there are 3 main areas where shared services are currently focussing on:
- Rethinking shared services beyond a focus on cost and reinventing the shared services center (and its people) as “value-drivers” by combining a new SMAC-driven imperative with today’s rote process work.
- Applying a hybrid approach to service architecture that fuses internal and external delivery with a reframed mandate that goes beyond the transactional core. Hybrid architectures accelerate the journey that shared services must take to transition from contextual to core work.
- Offering stakeholders corporate services aligned with value, aided by new throughput-based pricing models (rather than input-based pricing). This approach is being achieved by developing smarter partnerships with business process providers.
How do you believe digital has enabled shared service organizations to deliver improved business impact? Could you please detail with some examples?
In the traditional “low-cost” mindset, SSCs primarily support organizations’ cost-saving initiatives. Most organizations do this, for example, by centralizing business functions, standardizing processes, implementing a single ERP system, applying Lean/Six Sigma and offshoring.
The diagram below illustrates that by embracing these activities in the traditional way, value at first increases but then flattens. In other words, shared services developed with common methodologies will result in a commodity service. When new possibilities emerge via digital technologies, a new paradigm can arise to solve challenges and deliver value in a totally different way. Step changes in optimization, value-ization, and globalization are ongoing – and in many ways accelerating– as business becomes more technologically intensive and dependent.
To navigate these shifts, technological mastery is crucial. Rather than incrementally improving their services by just looking at single-point digital solutions (“doing” digital), SSCs need to take a more holistic view of digitization (“being” digital). For starters, this could mean digitally redefining of customer-centric end-to-end processes and, within these processes, identifying the repetitive, rules-based activities and readily available datasets at customer touchpoints.