The Future of Shared Services
McKinsey & Company recently wrote an excellent piece advising shared services operations on how to prepare for a digital future. Having recently returned from a major shared services conference, we can say the premise of their article is right on point: Companies need to take things a step further from merely creating seamless digital interactions for their customers; They need to work on digitizing their back-office functions as well.
Why is digitizing a shared services organization so imperative?
What the Research Says
McKinsey research suggests that companies, by digitizing their shared services organizations, can achieve significant savings in both time and money. For example, up to 50% increases in efficiency in some back-office functions are possible with digitization.
As you might imagine, digitizing all the data that comprises back-office functions is a significant challenge for many organizations. McKinsey cites its own research for a deeper dive as to the reasons why this is the case:
“Our research suggests that shared services groups in most companies are not yet prepared for a full-scale shift to digital ways of working. In fact, less than a quarter of the companies in our research base have started to build the digital capabilities required to improve internal processes, interact with customers and partners more efficiently, and create innovative products and services.
Companies seeking to make such a transition face constraints relating to process and workflow, talent development, and operating models. There may be concerns about integrating legacy systems with newer digital technologies, for instance, or a shortage of the talent and skills required to undertake such a huge transformation program, as well as conflicting strategic priorities within the leadership team.”
Slow to Adopt New Automation Solutions
It’s also worth pointing out that many organizations have been slow to adopt automation solutions for back-office functions:
“Companies in most industries have similarly begun to explore the possibilities created by digital technologies—but they are still very much in the exploratory phase. Widespread adoption has not happened yet. Only about 22% of the shared services organizations in [McKinsey’s] research base are beginning to build capabilities in automation, freeing up employees to manage tasks that are critical for providing satisfying digital customer experiences while still keeping up with manual record-keeping tasks.”
Addressing the Changes to Process and Workflow
McKinsey and Company’s advice to addressing the changes to process and workflow challenges that many organizations face is as follows:
“Most immediately, shared services groups can work with IT and the business to designate specific areas in which to incorporate automation and point robotics into their existing manual workflows. A typical starting point would be for a joint team to systematically scan entire portfolios of back-office activities and processes and categorize them according to business purpose, system interdependencies, and level of manual intervention required. IT and shared services groups would then have a common perspective on which processes and activities can be fully automated, which should not be automated at all, and which would benefit from a hybrid approach.”
Robotics Process Automation
McKinsey and Company’s use of the term “robotics” above is noteworthy, because this is the new buzzword in the shared services space. At the aforementioned trade show, Robotics Process Automation (RPA) was mentioned several times. According to a recent research paper by Mary Lacity, a Curators’ Professor in the University of Missouri St. Louis College of Business, RPA “is being deployed in shared service organizations as the next transformation lever beyond centralization, standardization, optimization, relocation to low cost areas, and use of enabling technologies.
Although shared service organizations have long-deployed enabling technologies like standard ERP packages, self-service portals, and low-level automation tools like scripting and screen scraping, RPA is a new breed of software that allows enterprise-safe automation of processes.”
Essentially, RPA automates business processes that are repetitive, like data entry, but it is packaged as a more non-invasive, robust platform.
How We’re Making Progress
DataServ’s FinTech Software as a Service (SaaS) business process automation technology helped a large global manufacturer, which had a wide variety of business processes and redundant technologies to support, to lower transactional processing costs for both independent divisions and corporate departments when they decided to build a shared services center in Manila and relocate typical back office functions from across the globe to this location. Therefore, we can vouch for the benefits of automating and digitizing shared services functions that McKinsey and Company stated, but we can take an even deeper dive on these benefits given our experience.
In addition to the efficiency and financial benefits of digitizing shared-services functions, SaaS business process automation technology can:
- Adapt to local or regional regulations
- Address unique business processes
- Deliver solutions rapidly in collaboration with other businesses
We’re Here to Help
If you have questions on automating shared services functions and the benefits this can provide to your organization, please Contact Us. Our team will be glad to help you immediately.