How Shared Service Organizations rethink their way of doing business

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Shared Service Organizations rethink their way of doing business – From transactional service provider to virtual, end-to-end delivery and value-added services

Technology is disruptively changing companies’ way of working in many ways. Shared Service Organizations (SSOs) are also facing the challenges of digitization and automation as well as changing customer demands in terms of flexibility and customized services. We have identified five major trends that make SSOs re-assess and re-adjust themselves going to their fundaments. Next to the automation of services, Shared Service Organizations (SSOs) are expanding their portfolio and re-design it towards value-added services. They re-think their operations on the way to virtual delivery while following a platform approach.Figure 1 - Five current trends in Shared ServicesFigure 1: Five current trends in Shared Services

Value-added services and customer orientation

The SSO service portfolio is no longer limited to transactional services, but will increasingly focus on value-adding, knowledge-driven and more complex tasks with higher quality demands.

As client requirements and expectations increase, solutions are needed to meet them. One straightforward solution might be more customized services, for example demand-based services and pay-per-use. In general, especially when setting up new services or adjusting services, more iterations with the client become mandatory. Channeling frequent feedback and reacting to changing demand remains a challenge for both service portfolio and operations.

Virtual Delivery Center (VDC)

Built on a holistic digital operating model as a framework, VDCs are a reliable measure of high SSO maturity as they fuel both high automation in operations and a truly digital product and service portfolio.

With VDCs, human and virtual delivery are leveraged via digital workflows that incorporate new technologies to meet the client’s service expectations in quality, speed and flexibility. VDCs benefit from various technologies ranging from ERP to BPM and Intelligent Automation. Beyond RPA, intelligent automation uses cognitive technologies like Natural Language Processing (NLP), intelligent data capturing and/or Natural Language Generation (NLG) to automate human-to-software interaction. This does not only allow to increase process and cost efficiency of the SSO’s operations (for example ticketing), but can completely change the quality and speed of delivery as well as customer interaction and experience for both back-office and front-office processes. Already today, high-tech call centers use chatbots as virtual assistants/call agents that can independently interact with customers. Further details for this topics can be found in our article Next Level Shared Services: Virtual Delivery Center.

In addition, new technology and infrastructure delivery models, such as Virtualization and Cloud, allow to use hardware more efficiently as well as flexibly utilize and access storage, networks, platforms and applications. Leveraging this technological innovations, SSCs can optimize the own IT performance and costs on the one hand and expand their service portfolio by “Anything As a Service” on the other. The offering of on-demand cloud solutions, e.g. via RPA as a Service can directly add value to the organization’s core business. In this case, the business and HQ functions can hand in manual tasks on-demand that could be automated. The SSO or an external RPA service provider, guided by clear rules and SLA’s, builds, runs and maintains the robots on a pay-per-use basis.

Rethink the way of operating

In the future, an SSC’s operating model needs to be more innovative, flexible and customer oriented. The digital operating model enables Shared Service Organizations to leverage new technologies and establish an efficient governance and delivery model to offer value-added, digital services. SSOs are maturing from pure transactional service providers to more complex, value-added services and also act as optimization and innovation drivers. The virtual delivery model based on AI, RPA & Co. already has a significant impact on the SSO’s operations – from steering and processes to the size and location of SSO facilities. As an example, technology enables remote delivery for human and virtual workforce, which leads to changes in the size and location of new SSC locations, requires new levels of flexibility and new governance models.
One of the key challenges arising from value-added services and digitization are the new requirements on HR strategy and staff’s qualification. Both need to correspond with the increased complexity of processes and services (e.g. from pure data processing to preparing complex reports and predictive analysis – more details in this article). The importance of strategic partnerships and flexible collaboration models increases. Both can be understood as a condition for further service evolution and measure to remain competitive. For example, new models include multi-sourcing strategies (multiple service providers for same service components) as well as hyperverticalization (service providers support in subvertical processes or process steps) and might further evolve e.g. towards the employment of freelancers.

Multi-tower / platform approach

Multi-tower shared services and hybrid sourcing models are persisting trends. Multi-tower SSCs are still the basis to build and expand SSOs on their way to becoming an integrated digital service entity, using one common operating platform to leverage “core” technologies. On the one hand, the platform approach allows a central steering framework and standardized setup for all service functions in all business areas, on the other hand, it enables a “plug and play” platform to quickly incorporate new business and services.

Focus shift from GBS to IBS – E2E services

SSOs that are organized in a multi-tower setting tend to move towards Global Business Services (GBS) with a central Business Process Management (BPM) to increase standardization and harmonization. The next level is then to maximize SSO delivery and efficiency potentials, striving for integrated business services (IBS), End-to-End (E2E) process perspective and virtual delivery. This requires SSOs to bear more responsibility for “own” end-to-end processes and delivery on the one hand side, whilst working even closer with retained organization process governance on the other side to ensure compliance and collaboration. In general, SSO’s customers can be better served when a clear responsibility split guarantees effective collaboration, monitoring and steering. By going E2E and delivering more value-added services in-depth, customer and process transparency will be the result. This helps identifying deeper process optimization and digitization potentials and finally fosters the development of new service offers as soon as a demand emerges.

Key Take-Aways:

  • Customer expectations and digitization encourage and foster value-added services
  • VDCs are the future of Shared Services
  • A future-ready digital operating model is a holistic framework organizing governance, processes, people and existing as well as new technologies
  • Platform approaches allow SSOs to scale their operations and add services to their portfolio
  • Evolution of SSOs shifts perspective to an E2E approach with integrated processes

This article was written in collaboration with my colleague Martin Edwards.

If you have any questions or want to discuss about Shared Services in more detail, please do not hesitate to contact the authors.

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