Csaba Szende, a Business Services Delivery practitioner, here offers his perspective of what the future looks like for Shared Services.
SSON welcomes contributions from practitioners around the world on how they are working through current – and future – challenges. Please email Barbara Hodge.
I think that there’s no doubt that our life will be different and the new normal will be THE normal.
First, I believe we need to understand what the Future of Work is, and how it will recalibrate our Shared Services World. We need to focus on what would presumably be new ways of working at the BSS, BSC, GBS, SSC etc. – you name it – centers.
Actually, we may think that Future of Work and the impact on the workforce is new, given Artificial Intelligence and Robotic Process Automation, but this whole jigsaw is actually a couple of hundred years old. There have always been new inventions on the horizon. What is different nowadays is the speed and what they have in common: these inventions always had some kind of flavor of skepticisms or even fear around them.
The bottom line: Yeah,the perception of the impact is losing jobs.
However, the truth is that modern studies have noted there’s often a positive relationship between new technology and increasing employment. Just look at Amazon and the number of robots they use and the number of employees that are constantly increasing.
Let’s watch out as by 2030 the odds are – according to a McKinsey related interview – that around 16% of the jobs (ALL jobs, not only SSC) could be automated with a nice slice of that growing by time.
What do we mean by that? Jobs that involve a lot of data gathering or processing and certain physical occupations are likelihood going to melt away. The relatively complex occupations, and activities to automate, like jobs which require judgment, empathy, creativity those occupations are likelihood going to grow. Certainly it drives another angle which is a shift of occupations and the necessity to learn new skills to work along with the machines.
Zoom in: The transition itself won’t be easy and as business leaders we need to prepare for that!
You may say: that’s all very nice but what about the pandemic and the SSC industry?
Let me cherry pick some interesting SSON figures from their latest international study:
- 90% of the SSC world has concerns about the impact of COVID 19 on their operations - not a surprise for you I assume.
- 93% though reported that they lost less than 25% of their capacity which is pretty good.
- 75% said that they are hitting the agreed SLAs which is also nice.
- 67% asked staff to work from home (although 95% of the BCP solutions are WFH)
- 29% reported that BCP-wise their connectivity or security environment is not sufficient.
READ MORE: Download your copy of SSON's COVID-19 report here.
Bottom line of the impact that we may see as a key take-away: accelerate automation (robots do not get sick) and accelerate the future of work.
Some SSOs say at this stage that they won’t be doing anything to change. We will see! Let’s concentrate on the key areas to watch out for in the future:
Automation and Digitization costs a lot of money, budget-budget-budget – but it needs to be done so money needs to be allocated. In my view the main bottlenecks are still the non-standard processes and their maturity level. To scale this automation will be the 1000-dollar question to answer as only 20% of SSCs say that there’s been a significant improvement and performance gained. We only understand what we measur4e – and if I recall correctly, Hackett says that GBSs are not really measuring the level of automation correctly (more than 50% do nothing in this field). However 72% of SSCs think that their workforce is ready for “people + robotics” while AI, aka Digital Workforce, is already among the top services provided by SSCs. You may also see the following question floating around the Internet: Which one of the three options below has the biggest impact on digitization of your organization? CEO, CFO, COVID? [I leave the answer to you.]
Nationalism may arise in location strategy - not a short term one, but offshore may become nearshore or even onshore in the future to keep the activity and the control closer. Just look at the number of centers and watch out for (Central East) Europe and APAC. An interesting chess game might emerge.
Scope increase - as HQ employees are more expensive, the SSCs I believe will show their true value, especially in pandemic times. In a nutshell: Cost will matter and it would mean more “muscle” (value add activities) to the SSCs through more strategic roles landing in our garden. There’s some more to go for a perfect BMI index as 42% of SSCs still have 75% transactional activities and only 1% says that they are totally knowledge centers…. a BIG way to go.
Reorganization - not just the SSC but the SSC as part of a global organization: BCP-wise, process / system and decision making-wise it will likely need to be done differently in the future. Also transactional jobs aka “fat” may even stay in the countries for a certain extent and not migrate at all.
Virtual SSC models - one of my ultimate favorites, which has been in the air since “lights out” SSCs started to build up from nowhere. Well if you could do these jobs from anywhere in the world then you may not need huge office rents but a true digital SSC tribe with correct IT infrastructure, new ways of working and another level of management? Cost-wise this will be no question and the talent pool may became indefinite.
I’d like to highlight that during these times the people aspect is still the most valuable. It’s not an accident that SSCs are saying that this element is on the top of their list as a key challenge and focus area (skills, knowledge recruitment and retention). The majority of the SSCs are working to solve this formula; currently, only 2% of the SSCs are developed and are ready now to crack this.
In closing, please do not forget that humans with their new digital skillset, hand in hand with the machines, will drive the businesses that will bond and be safe and sound.
The journey has accelerated: Are you ready?