While traditional shared services are effective in maximizing efficiency, they often fail to innovate or create value. The reason is three-fold:
Shared service centers default to cost-cutting because it’s easier to do.
Cost-containment has been the focus of shared service centers since their inception.
Cost-cutting often demands rigidity and discourages autonomy, which often impede change, growth and innovation.
Self-aware managers already know this, of course. In recent studies of nearly 300 leading companies and service center managers, we found that 73% of decision-makers believe their processes will need to be updated in theCode Halo™ economy to meet cost, agility and new market pressures over the next three years.
How will they do this? Depends on the maturity level of the service center. Nascent centers, for instance, will still find short-term gains with process improvement as usual. Mature centers and long-term gains, however, will require proficient use of SMAC technologies (social, mobile, analytics, cloud). That much we know.
Six Ways to Modernize Shared Services
Before detailing specific overhaul points, modern service centers must understand, if not reorganize themselves, to focus on three key areas: cost leadership (still important—what you’ve always done), harnessing technology (how can SMAC add value to your organization) and refocus on innovation (besides saving, how can the center contribute business value).
With that in mind, leading organizations can then move to the following:
Retrain employees with needed competencies in SMAC
Whether your workforce comprises primarily of digital natives or digital immigrants, SMAC investments always require new skills, such as data stewardship, pattern recognition, uncertainty modeling, data visualization, sophisticated tooling and dashboarding capabilities. Where social, mobile and cloud do most of the talking, analytics does most of the listening and learning.
Persuade stakeholders to add higher value processes services
Along with all operational changes, buy-in is required here. In fact, it was a top concern of the nearly 50 shared service organizations we surveyed recently, in addition to inconsistent process approaches and low levels of dedicated tools. The good news is analytics can help overcome both issues. (Our study found that companies that applied business analytics cumulatively received $750 billion in both savings and new revenue.)
Make millennial workers your guinea pigs
They use SMAC technologies more than most. And since millennials will soon account for the majority of employees within shared service centers, it only makes sense to start with them when piloting early programs and understanding how SMAC can impact your organization.
Focus on meaning-making over data collection
Ingesting the volume, variety and velocity of SMAC data is only the beginning. To mine needles from the haystack, you’ll need to dissect processes, spot anomalies and refresh your memory on causation versus correlation to become a true learning organization.
Move service work from context to core.
In addition to continuing to reduce operational expenses, the next-generation service center must contribute new ideas that increase revenues. This move from “context work” to “core work” will be vital to helping shared service leaders become value-drivers. And as with other recommendations on this list, SMAC is the key enabler.
Reinvent your commercial contracts
As shared services evolve to SMAC, so too must third-party commercial models. This is largely done with cloud-based output models rather than traditional input-based pricing. However, these “metered” contracts do require more pooled risk and shared responsibility. But they also let shared services leaders achieve greater vendor motivation, agility and productivity. A hybrid approach to process work that a mix of internal and external resources can further reduce the exposure to risk and ease the transition.
In recent years, several shared service centers have already seen their efficiency gains plateau without knowing how to shift to higher value processes. For these and others like them, we believe SMAC is the underlying answer in remaining relevant and adding to the bottom line beyond just savings. In our extensive research and reputable experience, SMAC is the future of process work.