Shared services and why they're going digital
Over the past decade, shared services have slowly but surely emerged as an integral part of most Fortune 500 companies. They have taken a strong foothold in the business landscape because of their myriad advantages. Shared services organizations (SSOs) specialize in providing technical and administrative support in finance, human resources, and IT functions. They consolidate multiple processes in groups and centralize activities to reduce redundancies.
Companies have taken immense measures to digitalize their business front-ends to provide seamless customer service. By taking the next step of digitalizing backend operations through digital shared services, they can expand efficiently, achieve significant time savings, and avoid outsourcing. The benefits of shared services can be truly unlocked by embracing social, mobile, analytics, cloud, and intelligent process automation technologies.
Advantages of shared services
As shared services organizations are uniquely positioned in the backend of a company, they can help:
- identify digital strategies
- rectify front-end customer interactions
- boost internal productivity
Digitalization of shared services can further help:
- acquire valuable capabilities
- identify new online products and trends
- utilize analytics models to improve business planning
- leverage social media to boost the parent company's responsiveness to its customers
- create a phased procedure to promote online purchases
- assure efficiencies across the company through automated procedures and workflows
How to select the ideal shared services model?
- Establish a shared services vision
The transformation process of any shared services organization begins with the leadership buy-in followed by finding associates and resources with the relevant skillset for change management. Leadership should prioritize objectives, create guiding principles, and define the scope of services.
- Maintaining the leadership buy-in
The involvement of senior staff in crafting the vision and their active participation in taking crucial decisions throughout the transformation makes the process simpler and more efficient. In addition, a system to evaluate the customer satisfaction of internal and external stakeholders will help maintain the leadership buy-in.
- Bringing together the right team
Establish a reliable governance model and decision-making committee to coordinate with stakeholders and prevent irresponsible decisions. Provide a system dedicated to issue escalation and fast-tracked resolution. Once a governance model is decided, assemble a team based on the defined roles and responsibilities. Approach an external resource if the currently available options are not up to standard.
- Showcasing the results
The project team should be able to illustrate the outcomes of the new model on paper using a well-constructed business portfolio. It should encompass the recurring and one-time expenses, qualitative and quantitative benefits, and the areas most impacted by the parameters of the new shared services model.
Business portfolio development can be an elaborate process, but it helps formulate an achievable implementation plan and recognize improvements for the next transformation.
- Change management and communication plan
Functional employees must revise their methods to adapt to the changing perspective of the organization and the individual. The process of change management makes its presence felt when it is integrated with the project management plan. This enables the change management to be oriented along the lines of the management schedule and its milestones.
Change management should incorporate a constructive communication platform to inform (and take feedback from) leadership and stakeholders on the status of the project, expected changes, and future requirements.
Each step is integral, and it is noteworthy to consider the implications of each step as one flows into the other.
Scope of shared services
Shared services were first introduced as a strategy to optimize operating costs and deliver better customer service – through centralized control over processes and utilization of the benefits of economies of scale.
They also remove the need for outsourcing basic business tasks while increasing the quality of services. This also safeguards the technical expertise and domain knowledge of the organization, eliminating the threat of intellectual property theft.
Whether to embrace shared services is a major strategic decision – it should be able to outperform existing outsourcing alternatives. The payback period on the investments could be around 3 - 4 years and depends on factors such as location, implemented shared service model, and existing outsourcing alternatives.
Digitalization of shared service models
The next substantial leap for shared services companies is to provide digitalized solutions to enhance the back-end functionality of the organization leading to savings in time and cost. By integrating automation, AI, data analytics, and other digital technologies into their operations, shared-services organizations can enhance the existing system and processes globally.
The existing solutions can process only simple transactions; they are inadequate in a digital world that requires timely, more frequent, and increasingly complex customer and vendor interactions. Organizations with an existing shared services model can overcome this problem by emphasizing less on simple manual tasks and concentrating their efforts on formulating and implementing efficient and customer-friendly service options.
Instead of hiring inexpensive, entry-level employees, bringing in experts in point robotics, data analytics, and agile software development helps develop more creative solutions. New services can be delivered seamlessly when operations and IT groups collaborate closely to establish, test, and deliver them. Global Business Services (GBS) combines operational excellence models with best-in-class practices to make informed decisions and enrich internal and external customer relations.
In conclusion, aligning the shared services model with your organizational objectives can generate help generate favorable outcomes. Careful planning and execution are essential for the next transformation. Although the process of adopting the suitable shared services model can be tedious and time-consuming, the results are worth the effort.