Trends Shaping Shared Services Transformation in 2022
Shared Services have been an evolving service delivery operating model for the past few decades as large businesses across the globe are increasingly using shared services models to support a variety of functions. However, the current ongoing pandemic has challenged the conventional set-up of shared services and forced SSC and GBS professionals to adapt and re-think how it is set up and operates, whilst also leveraging the many benefits from having such a model in place during a time of crisis. With increasing revenue, reduction in operating expenditure, and streamlined management, shared services modernization will radically alter the corporate world. Let us look at some of the key trends driving shared services’ transformation as businesses shift their attention to operating models, process workflows and talent development.
- Value Generation from Breaking the Functional Silos
- Unified Governance through Global Shared Services
- Shared Services Digitization
- KPIs monitoring in real-time.
- Predictive Analysis
- Process Standardization
- Visualization of how processes contribute to business outcomes.
Delivering high-value services throughout the enterprise in a consistent and in an economical manner through an integrated business services model is key for enterprises. While SSC/GBS model has helped enterprises tremendously in scaling up, real value for the organization is generated via breaking the functional silos and enabling less internal complexity as a result of that. The larger the organization, the more likely it is for operational or reporting errors to cause major problems due to a lack of alignment between core systems and business process changes that have occurred. SSC enterprises today are focused on improving customer outcomes and achieving operational efficiency savings by integrating processes end-to-end including source-to-pay, order-to-cash, and record-to-report. Most of these processes are being integrated with monitor performance tools that help optimize processes and enable SSCsin to deliver significant value to the enterprise. For example, one of the most matured shared services functions is finance, which is provided through an integrated, centralized global model for many organizations. Finance as an integrated service is transparent and enables finance leaders to monitor working capital throughout the system. This data not only enables management to make better strategic decisions but also eases transactional activities throughout the organization.
As integration increases for business functions, enterprises progress towards developing governance models through global shared services because it improves the proximity of businesses, reduces time zone dependencies, and increases the scale of operations. This helps the company to achieve economies of scale, standardize processes, build expertise and focus on the core business. Governance dictates both the strategic as well as operational aspects of a business. Strategic governance addresses service, investments, scope, and price while operational governance covers day-to-day items related to processes, technology, and people.
Digital technologies are transforming all business functions from SCM and HR to Finance and customer experience, and more. While Robotic Process Automation reduces costs by automating routine, manual tasks, cloud-based IT environments enable end-to-end integration of operations. Those integrated processes provide data to analytics, and analytics drive better decision-making, more efficient operations, and increased enterprise performance through high-value business insights. Artificial intelligence tools help manage customer experience and control supplier management to create improved and efficient service. Digital transformation is essential in the journey to next-generation shared services. It will marry operations and technology to create innovative, seamless service lines on a global scale. Let us look at some of the digital transformation technologies that are revolutionizing shared services.
To remove bottlenecks and automate optimization, enterprises must embrace digital transformation. Enterprises need to find ways to break down information silos and allow the free flow of information. Digital tools offer a solution to this problem. Digital tools also help the workforce, by freeing them of repetitive, mundane tasks that plague their overall productivity and help them engage in value-added tasks. Process mining tools help in analyzing event logs and other available data to build up a graphic representation of your workflows, which assists in locating process bottlenecks and highlighting duplicated areas of work.
Some of the key capabilities of a process mining tool are:
Process mining, therefore, acts as the keystone to enterprise digital transformation initiatives. It provides important information needed to make sound business decisions. Through process mining tools, enterprises can visualize the impact on businesses when they run through the scenarios of changing the process. Enterprises subsequently can make improvements in their existing processes and know what returns to expect from their investments. Process mining tools should be the foundation upon which all future investment and transformation projects should be based.
Robotic Process Automation
Shared Services have always focused on delivering cheaper, faster, and better services to the enterprises they serve. However, while cost-efficiency continues to be an important strategic imperative, there is more pressure than ever for SSCs to digitally transform the operations they are charged with, and create new services and business value, not just cut costs.
SSCs stand to benefit immensely from RPA as it improves efficiency, reduces costs and increases ROI. This allows organizations to shift their workforce to higher-value tasks, as RPA takes care of low-value repetitive tasks. Most SSCs and GBS are still in the early phases of shared services automation, primarily using unattended robots, with little to no functionality or intelligence, to improve several back-office tasks. However, as RPA has increased its capabilities – through embedded and Artificial Intelligence, SSCs would be able to perform more cognitive-heavy tasks automatically while keeping human employees in the loop.
Shared services organizations can leverage predictive analytics using data from multiple departments and perform cross-functional analytics that can deliver unique operational insights. In a recent global survey, 61% of respondents said that the data analytics in their organizations was still ‘basic’, while 27% said they had sufficiently competent analytics. Only 8% had capabilities for complex event processing and neural networks. Enterprises today are increasingly looking towards predictive analytics to manage uncertainties and make swift and sound decisions.
AI will increasingly be adopted by enterprises worldwide for business transformation with newer capabilities of AI already being used by some organizations like facial recognition and natural language processing (NLP). For global business services organizations, AI can mean automation beyond RPA. Using cognitive AI and analytics, organizations can use unstructured data and handle complex marketing, finance, accounting, and customer service processes with automation.
Breaking functional silos, unified governance and digital transformation are some of the trends powering the future of shared services. These factors will help businesses to improve the experience for their internal stakeholders as well as customers. Shared services should therefore look to increase their responsiveness to growth and take advantage of future business models.