This is the first of a two-part series.

What a difference two decades make. When shared services centers (SCC) found their corporate footing in the ‘90s, they succeeded by creating economies of scale through the elimination of redundant functions, people and technology systems. Fast-forward to today’s hyper-competitive global business world, and SSCs cannot survive on cost reduction alone. To win, they must deliver differentiated value in an agile and flexible way.

Moving to this new approach is predicated on the ability to quickly embrace digital technologies such as social, mobile, analytics and cloud (the SMAC Stack), intelligent process automation (IPA) and Code Halos (making meaning from the digital data surrounding people, organizations and processes). Our recent study reveals that IPA 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%. 

In short, SSCs that continue with traditional approaches will continue to deliver commodity services. Organizations that adopt innovative approaches using digital technologies will begin to solve challenges and deliver value in a whole new way, resulting in a three-pronged paradigm shift to providing better services (optimization), new services (value-ization) and more services (globalization). 

Figure 1

Optimization: Turn Simple Execution into Intelligent Automation

Mature SSCs certainly 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 IPA. IPA 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, IPA 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, IPA can collect required documents and handle claims within defined boundaries, while an employee only focuses on the complex cases involving exceptions. 

IPA 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 IPA 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.”)

Meanwhile, SSCs can also employ the SMAC Stack to identify areas for process improvement. For instance, by analyzing historical process scenarios, SSCs can gain insights into throughput times, recurring steps and scenario variations. 

Here are just two ways digital technologies can help differentiate SSCs today: 

• Intelligent expense management software offered as a cloud solution: Using pattern recognition, this software can learn to deal with certain expenses, increasing the percentage of automatic processing. 

• Multi-lingual, interpretive voice response solutions: Virtual agents in call cen­ters, reservation centers and sales centers can automatically respond to phone calls, offering services in several languages on a 24x7 basis, and making employ­ees available for non-standard or complex cases.

Value-ization: Shifting Value from Contextual Service Execution 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 higher value, however, 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, 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. For example, through big data benchmarking, SSCs can compare business units to illustrate best practices and set the bar for under-performing units. Or, using smart knowledge manage­ment systems with machine learning capabilities, the SSC could automatically respond to service desk tickets/incidents or prevent them from being registered by suggesting solutions based on experience. 

Globalization: Moving From Local to Global Shared Services 

In order to offer a complete and scalable portfolio, SSCs must increase their service offerings, both geographically and functionally.  In addition to cost savings, doing so can deliver added value through agility (e.g., faster implementations when changing or adding services) and a more uniform way of interacting with users. Globalization boosts value-ization as well, because the more geographies and functions it covers, the more value an SSC 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; align shared services across multiple geog­raphies and functions; and enable global collaboration and communication. SMAC technologies are essential in all cases. For example, social and mobile solutions bridge the gap between the SSC organization and all global users by introducing new ways to run processes end-to-end and exchange information among different 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. 

As SMAC and IPA rapidly mature, we strongly believe organizations must quickly adopt and master them. By doing so, SSCs can begin to compete in the emerging Code Halo economy.

In part two, we’ll examine how one SSC overcame the digital, generational and cultural challenges to reinvent itself.

To learn more, read our white papers Shared Services: How Digital Can Accelerate the Leap to Value-Added Differentiation, and Evolving Shared Services from Cost-Killer to Value-Driver, or visit the Business Process Services or Intelligent Process Automation sections of our website.