Three Ways Shared-Service Organizations Can Go Digital

February 24, 2016

By Peter Scott - Enterprise Cloud Contributor

Shared-service organizations, those organizations that provide technical and administrative support in areas common to all areas of a business, are ripe for digital transformation.

Research by McKinsey & Company suggests that those firms that digitize their shared-service organizations can reap substantial savings both in terms of time and money. They reckon that some back-office functions can be streamlined by as much as 50 percent with digitization if they incorporate more automation, virtualization, advanced analytics and other digital technologies into operations.

There’s plenty of room for digitizing shared-service organizations, too; less than 25 percent of shared-service organizations are building digital capabilities in their back-office, and only 22 percent have capabilities in automation, according to McKinsey. Only 15 percent of shared-service organizations are building social media skills and learning to integrate data from multiple channels, and only 20 percent have invested in streamlining internal operations through analytics.

Three Ways Shared-Service Orgs Must Evolve

One reason that more shared service organizations have not digitized fully is that the typical shared-service organization skews heavily toward process-minded employees. So the first step is shared-service organizations changing to a talent development model.

The traditional model is a pyramid structure where a small set of leaders manage a much larger group of processing agents who have lower-level skills. This must change to where expertise is built along specific processes and small teams of technology and user-experience experts to work together.

A second way that shared-service organizations must evolve is through changes to process and workflow. Shared-service organizations should work with IT to discover specific areas where automation can improve manual workflows. These organizations need to let technology work for them more.

Third, shared-service organizations must make changes to their operating model. They must invest in building capabilities that will allow for continual business-model renewal such as using technologies such as ServiceNow’s (News - Alert) service delivery platform-as-a-service. Consultancies such as Integrhythm can help shared-service organizations adopt and deploy these technologies across business units.

With less than a quarter of shared-service organizations taking advantage of digital technologies, there’s much room for growth. This is good news for firms looking to reduce costs and improve performance.

Edited by Maurice Nagle