Process versus Knowledge
The efficiency and effectiveness of shared services, whether captive or outsourced, is down to the ability to execute specific activities in a high quality, timely and cost-effective manner. Do efficiency and effectiveness come from an excellent process or in-depth knowledge of the subject? Is one more important than the other?
RPA (Robotic Process Automation) and AI (Artificial Intelligence) are high up on the #word hit list, and within the HR community, the debate continues regarding which jobs will be replaced by robots first. If you are a shared service centre leader, there is pressure from customers to say when (not if) investment will be made in these various technologies. When is robotics, AI and other process automation the right investment to make versus investing in human capital?
Shared service operations are very focused on the return from an investment; after all, the entire service centre primarily exists to reduce costs. What criteria would you use to determine whether investing in process automation has a higher return than investing in knowledge?
- Highly repeatable – are the steps in the process the same each time? No deviations, no exceptions? If the steps are the same each time, then this process is a top candidate for automation. And the opposite is true. If there is hardly any consistency regarding the actions needed to complete a process, then human knowledge and experience will be the more cost-effective method. Rarely are there business processes on the extreme and the level of standardisation will vary along a continuum. When assessing an investment, it is important that the assessment is factual and realistic on where that process sits on this continuum.
- The frequency of change – if the process is subject to a high rate of change then perhaps automation will not generate the appropriate ROI. For example, if the shared service is supporting the sales process for a product that has a shelf life of less than a month, maybe automation is not the best solution. Products similar to mobile phone plans, gym membership or similar that have a high rate of change automating the processes could cost more than having great humans who can quickly learn the new offerings.
- EQ versus IQ – does the process require a high level of sensitivity? The death in service process is an example of a time when high EQ is needed. The shared service centre should not want to use AI in this process as a high level of sensitivity is needed during this emotional time. Sometimes the ROI is not the only factor to consider when making decisions regarding automation versus the more human input.
- Rules – if the process has a set of rules or logic that can be followed (e.g. if this ... then do that ...) automation can generate a good return. If there are always exceptions to rules or interpretations needed then potentially humans, possibly supported by automation, might create a more cost-effective solution. Payroll is a good example, as in many cases payroll has a set of logic that can be followed and therefore automated. In some countries or circumstances, the rules are very complicated, and automation will not get the right amount to pay someone cost-effectively.
- People – the obvious factor. Is there sufficient quality and quantity of employees or potential employees for the shared service centre to create the appropriate ROI in humans or knowledge? Do you have the right people retention processes and activities to ensure that your investment in learning does not walk out the door? Are your training inventions fit for purpose to give the individuals the knowledge they need on day one and into the future as changes happen? If you were willing to spend several thousands of dollars to automate something are you willing to spend something with a similar ROI for training and rewarding the staff?
In the world of RPA and AI, the ability to automate and remove the “human factor” from a process is reducing in price. But are the processes in your shared service centre the right ones for investment? Or would you and your customers be better off with increased investment in knowledge or the human capital portion of the process?