Accelerating digitalization of shared services, IT News, ET CIO
By Altaf Patel

The pandemic brought in by Covid-19 has had a massive transformation on our socio-economic ecosystem. One such transformation is the ‘forced’ digital acceleration that businesses have to rapidly adopt and adapt, to better engage with their customers, colleagues, and their stakeholder ecosystem in order to survive and compete. Digitalization now allows businesses to transform fast and pivot quickly to new circumstances, resulting not only in creating a transformative impact, but also provide the necessary resilience.

Ripple effect of digitalization across sectors

Digitalization has become a big enabler to remove the friction across the value chain and this has resulted in the unprecedented level of reduction in physical human interaction (driven mainly bythe pandemic crisis). Digital technology companies have seen their valuation grow by 5 to 10 times in a very short span. Zoom, one of the leaders in modern enterprise video communication, witnessed its share price jump from $66 in Dec ‘19 (pre-covid) to $433 in Feb ‘21.

This is not surprising when a recent survey conducted by HFS (with 400 global executives) stated that 60% of the global workforce will continue to remain remote or hybrid in future, given the advent of video conferencing as one of the key enablers for communication across remote workers. As witnessed in other industries, digitalization is expected to create a similar transformative impact in the Business Services landscape. Let us look at the opportunities to drive digitalization within the domain of Business Services.

Digitalization paving the way for newer opportunities in Business Services

Business Services were traditionally carved out as a piecemeal process offshoring/outsourcing to resource centres – further divided by function, country, transactions etc. resulting in a larger cost arbitrage (mainly a cost driver). Subsequently, we noticed the evolution of Business Services into domain specialized functions (Finance, HR, BPOs and more), through a more efficient, professional and service-driven mindset leading to better conversion of SLAs. The continued focus on these drivers in today’s Business Service operations has led to these parameters being considered as ‘Business As Usual’. Now, there is a rising expectation of a value-driven approach in Business Services.

Business Services run a vast portfolio of services and are in a powerful position to see how the entire organisation operates (even with a piecemeal lens). For example, one of the leading Global Business Services in India operates on about 8 of the 10 service model processes of its parent company. With the power of knowledge of services/processes it runs, it can now do more with the data and systems on which these processes operate.

In addition to managing several services that it takes care of, Business Services also interacts with key value stakeholders – customers, colleagues, suppliers etc. and are thus better placed to understand the friction points and experience that these stakeholders have. Overall, this knowledge of process, data, systems and stakeholder interactions brings massive power and differentiation opportunities for Business Services to create value through digitalization initiatives.

Let’s look at a few areas of opportunities to drive digitalization:

  • Automation CoEs are now increasingly incubated and developed in Business Services (not in the head office): COVID has forced the acceleration of adopting tools such as Robotics Process Automation, Intelligent Workflows, Vision-based Automation etc. Automations are now enabling us to rethink existing workforce dynamics, define net-new skills of the future and to orient the workforce towards value-added activities. In a recent survey conducted by The Shared Services & Outsourcing Network (SSON), 62% of global executives identified digital automation as one of the strategic investments that will help to survive and succeed in the post COVID era.
  • Analytics CoEs are now becoming more prevalent capabilities in Business Services: This enables Business Services to take on a number of strategic problem statements and leverage the data to produce insights and solutions with AI/ML applications. In the same SSON survey, about 60% of executives have shown the preference to leverage analytics to guide customer engagement and to solve pressing business problems.
  • Great opportunity in the application of disruptive technologies for quicker rollouts and for disruptive ROIs:Business Services possess deep domain and process knowledge. They arethus the right team in spotting problems, identifying solutions and change-managing solutions by working with different parts of an organization to deliver the ROI. Business Services are very well placed to identify strategic problem statements by bringing cross-functional teams, both from internal and external ecosystems.
  • Business Services can also tap into the innovation eco-system around the world, given the geographically diverse presence of their global centres. For instance, we are seeing examples of Business Services setting up start-up accelerator programmes in Bangalore to be able to test, trial and scale disruptive solutions at pace.

Demand for cultural shift to embrace digitalization in Business Services

It is not easy to bring a cultural shift within Business Services overnight, to be able to tap into the unlocked value. For that to happen, we need to focus on the below:

  1. Clear Digitalization strategy: This needs a top-down strategic push into the organization and hence needs to strategy for the entire organization to play a role in it. Role of Digitalization cannot just be owned by one team, this needs to be enterprise-wide mandate across all levels. Risks of not doing this will be few tinkered PoCs and trials with little appetite or investments to scale. This needs to be a CEO/COO driven strategy, right from the top for it to be effective.
  2. Develop an integrated organization: Developing end-to-end knowledge of processes, value chains, journeys with a clear design thinking lens of the impact on customers, colleagues etc. should be at the heart of the Business Services strategy. Integrated organizations will help develop integrated untapped solutions.
  3. Invest in developing talent and leadership: It is important to continue to nurture and develop new skills. Business services of the future are expected to be able to adopt strategic agility on top of VUCA corporate changes. Imbibing human-centred design skills will provide a big advantage in improving customer experience.
  4. Harness the power of data: We need to look at data with a fresh approach that resides beyond the organisational silos. Business Services must also think beyond the regular scenarios of housing and storing data centrally to a scenario where data can be easily united, refined and combined to dynamically test scenarios and hypothesis.
  5. Create an innovation culture: Identify and build internal expertise to test, trial and scale the solutions with a balance of partnering with external vendors and internal IT teams on a regular basis. Teams will get it wrong at times (losing investments and not delivering the required results) but it can equally create 5 to 10 times the advantage which could develop capability and build a competitive advantage.

The author is Director Business Transformation, Tesco Business Services.

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