Analytics and automation dominate shared services technology has been saved
Analytics and automation dominate shared services technology
Results of 11th biennial Global Shared Services Survey
January 20, 2020
A blog post by Brad Podraza, managing director, Deloitte Consulting LLP and Alec Kasuya, senior manager, Deloitte Consulting LLP
Advanced digital technologies are—and will continue to be—critical for shared services operations. A strong 90 percent of respondents to Deloitte's biennial 2019 Global Shared Services Survey agree or strongly agree that increasing digital capabilities is fundamental to achieving SSC objectives. Automation and analytics are playing a crucial role in delivering the next wave of value for shared services centers (SSCs), and as we move into the next decade, SSCs are set to evolve in ways we haven't seen before.
Global Shared Services Survey key findings
Increasingly, SSCs are shifting from being a "provider of what they ask for" to a generator of business value, especially as they play more of a role in strategic and interactive-heavy areas like customer service, sales and marketing support, and procurement. The overall findings fall into four major categories:
- Digital adoption: Global business services (GBS) organizations are adopting digital rapidly (cloud, robotics, or single-instance ERP solutions have been implemented by more than 85 percent of respondents). They get it—this is a way to position themselves as catalysts for enterprise-wide digital transformation.
- GBS organizational structure: As organizations scale up, GBS organizations and GPO implementations become more prevalent, and the largest organizations overwhelmingly leverage GBS operating models (70 percent for companies with >$25B in revenue)
- Cost efficiency: GBS organizations are increasingly expected to provide higher values at lower cost. Hence, cost-efficient measures like automation are top priority for GBS strategy and investments.
- Location strategy: The largest global companies surveyed are driving delivery through mature markets—in India, Poland, the Philippines, Malaysia, and Costa Rica—while implementation of on/near-shore models (closer proximity to HQ) are a notable part of companies' location strategy.
In summary, we're seeing companies make big investments in SSCs. More SSCs are putting stock in automation and analytics, and we're seeing organizations use automation to reduce or eliminate transactional work. Ultimately, the data shows the realization of two predictions made in the 2017 Global Shared Services Survey report: knowledge-based processes are the growing function of SSCs and they'll do it with the help of automation and analytics.
The state of analytics within shared services
In the earlier 2017 report, we concluded that "knowledge-based processes were on the rise." Analytics continue to play a central role in SSC's and GBS organization's business strategies. But how exactly are SSCs using analytics in 2019? Around 61 percent of SCCs we surveyed perform at least three of these six analytics processes:
- Provide requested reports to the enterprise (72 percent).
- Analyze historical data to discover trends (61 percent).
- Use robotics/process automation data to advance decision-making (54 percent).
- Gather and aggregate enterprise data (52 percent).
- Develop and deliver business insights to help enterprise leaders run the business (51 percent).
- Perform predictive analytics and /or optimization (35 percent).
As expected, global SSCs are more likely to use data analytics to gather and aggregate enterprise data (59 percent) as compared to regional SSCs (35 percent). Scale in data matters.
The state of automation within shared services
In 2017, when commenting on where digital technology adoption within shared services centers was heading, we heralded, "Here come the robots." The 2019 report confirms: For most SSCs, robotic process automation (RPA) has moved from being nice-to-have to a must-have. Since 2017, the number of companies that have implemented at least one end-to-end process automation has increased nearly eight-fold, with 63 percent of companies today having automated one or more end-to-end process (for companies with revenue greater than $15B, that rises to 75 percent), compared to only eight percent in 2017.
What's more, 88 percent of respondents say they plan to increase their use of robotics in the next 3-5 years, and most SSCs (53 percent) are planning to increase the use of robotics significantly.
What impact is automation having and expected to have? Around 47 percent of survey respondents reported achieving 10 percent or more in cost savings. In terms of productivity, 47 percent anticipate achieving 20 percent or more productivity increase from future RPA investments. Additionally, nearly two-thirds of respondents expect future investments in RPA to reduce or eliminate business process outsourcing and/or offshore SSCs.
Digital technologies and the decade ahead: What's next?
Today, only 16 percent and 11 percent of respondents indicate leveraging artificial intelligence (AI) and cognitive technologies, respectively, within their SSCs. We can expect that SSCs will increasingly harness these technologies to enable them to move even faster with greater precision, to pinpoint truths that improve decision-making, and to create more beneficial customer and stakeholder experiences. All this will help further position shared services as a true driver of enterprise value.
To learn more about the state of Global Shared Services Centers, download the 11th biennial edition of the report.
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