The Winning Card in Shared Services: Data Analytics

SSON News and Analysis
Posted: 07/09/2012

Data Analytics – The Next Stage of Shared Services Evolution and Maturity

Evolution of Shared Services

The Shared Services journey started in the late ‘80s and early ‘90s with organizations trying to centralize and consolidate transactional activities to help eliminate redundancies, standardize processes and reduce costs. IT, Finance and HR functions were early adopters of the Shared Services paradigm. Since then, Shared Services functions have been going through a significant evolution:

  • Service provider – Building the delivery capability and expertise in transactional process activities across various functions
  • Process ownership – Taking E2E ownership of the processes that are in-scope of shared services and driving process improvements to elevate process effectiveness
  • Value creation – Analyzing the structured transactional data that organizations own and the unstructured data from external sources to deliver actionable insights to business leaders, enabling them to make better decisions

Hewlett Packard (HP) has invested significantly over the last 15 years in building up its Shared Services' capability. Today, the company's Shared Services function is responsible for driving the transaction processing activities for different functions like Finance and Accounting, Supply Chain, Marketing, and Human Resources across the enterprise. These capabilities are deployed from 17 global centers across the world.

Shared Services functions being the sole guardian of various enterprise-wide transactions and processes, they are also the owners of the transaction data that gets created around our customers, suppliers, employees and channel partners. HP’s leadership team recognized very early the opportunity that exists to harness the power of the data being created within the enterprise and the role a Shared Services function can play to:

  • Gather and synthesize data
  • Analyze the historical data to understand patterns and trendsv
  • Predict future scenarios through advanced quantitative techniques
  • Create business insights that enable business leaders help drive revenue growth, mitigate risks and optimize costs.

HP identified the Data Analytics play early on and knew that it would help in elevating the positioning of Shared Services function from a cost minimization lever to a value creation lever. Thus the birth of HP Global Analytics took the form of a multi-functional analytics center that drives data-driven decision-making across sales, marketing, supply chain, finance and HR functions by leveraging structured and unstructured data.

Analytics driving value creation

HP established the Global Analytics group to help instutionalize the deployment of analytics across the enterprise to help business leaders make better decisions, faster. Over the last six years, the HP Global Analytics model has gained senior executive sponsorship and has been instrumental in elevating the maturity of Shared Services organizations in the enterprise.

HP Global analytics has developed end–to-end capabilities in the analytics domain (see Figure 1) to help business create value in terms of driving revenue growth, margin expansion, and cash flow improvement.

The core capabilities are in terms of:

  • Data acquisition and integration – to get a unified view of enterprise data
  • Querying and reporting – understand patterns/ trends from the historical data
  • Research and analysis – to understand the market/ competition to identify root cause
  • Advanced analytics – to predict future scenarios and optimize across various constraints

These core capabilities are being leveraged to deploy specific analytics solutions in the context of sales, marketing, supply chain, and customer service function.s HP Global Analytics is playing a critical role in helping businesses make key decisions such as:

  • Identify the attractive market opportunities and target the right customer segments within those markets with the right product at the right time
  • Optimize the marketing budget to help maximize ROI
  • Help design better products and enhance brand awareness, by analyzing unstructured data from social media, forums, blogs, call center to understand customer sentiments and perceptions
  • Price optimization for various bundled products/deals to maximize deal level profitability
  • Optimize sales force allocation and associated investments to improve productivity of associated sales reps
  • Improve customer satisfaction and experience by reducing product defects through early warning system for product failures by leveraging call center data and social media
  • Improve inventory optimization at various nodes in HP’s supply chain through network modeling and better demand forecasting

These applications of analytics solutions, using structured and unstructured data, have been creating very valuable insights that help HP business leaders make better decisions.

Organizations are typically at different levels of analytical maturity, depending on investments made in terms of top management commitment, people/talent, tools and data infrastructure. HP Global analytics established certain key Shared Services enablers that helped to elevate the analytics maturity across the enterprise:

  • Identified the analytics efforts that needs to be driven in a coordinated fashion across the company to enable better leverage
  • Developed common set of analytics capability in a central group to enable faster capability ramp-up
  • Established reusable tools/approach/methodology for deploying analytics solutions leading to better efficiencies and consistency
  • Developed a central talent pool of highly skilled analytics professionals
  • Established standard processes for best practice sharing and effective knowledge dissemination to enable a learning organization culture

Opportunity for Shared Services organizations in APJ region to drive the Data Analytics agenda

APJ has become an established hub for the Shared Services market, and today we see stabilized operations in the area of managing transactional processes. As the natural next stage of evolution, the organizations with E2E process ownership and awareness of available structured and unstructured information are ideally positioned to drive the Data Analytics agenda. This would help them in making the shift from business process and transactional, off-shoring services to more knowledge based, high-value services.

Talent availability in areas of quantitative discipline is quite strong in the APJ region. The educational system in countries like India and China is geared to provide intellectual brainpower. Globalization has also helped the talent in APJ get international exposure and access to business management and consultative domains. It gives us a workforce that not only has the ability to understand the business context but also possesses the necessary sophisticated quantitative analytical skills.

The economic environment offers opportunities for applying data analytics to businesses within the region itself, by enabling companies in the APJ region to make data driven business decisions and compete effectively in the marketplace. Countries like China, Indonesia, Vietnam, and India have large and buoyant domestic markets, and therefore are not so dependent on exports for growth. This robust growth in private consumption has caued this region to become a focal market for some of the world’s largest companies.

The Shared Services industry in APJ is already catering to certain key industry verticals, like Finance & Banking, Media & Entertainment, Hi-Tech, CPG-Retail, Healthcare, and Telecom. Most of these industry verticals are rich with data – both structured and un-structured. This enables the Shared Services providers to logically extend their capability in the analytics space and move up the food chain with respect to value-add and creating business impact.

As Shared Services providers make the transition to driving analytics efforts within an organization, there are few critical success factors that need to be kept in mind:

  • Build sponsorship with senior executives within stakeholder organizations to build strategic partnerships
  • Act as a reliable partner who has domain competency and the related business expertise
  • Hire scalable talent to understand the data available and how it can be analyzed to provide decision support to identified key executives in the organization
  • Invest in skills, technologies and tools that can help drive real time analytics
  • Offer breadth and depth of services spanning across reporting, research, predictive modeling
  • Develop customized solutions for stakeholders keeping the business context in mind
  • Build risk management capabilities to reassure clients that their data is in safe hands

The last, and possibly most important, factor is helping stakeholders develop the right mindset to work with Shared Services in an on-shore/off-shore model. To help the model succeed, it’s often incumbent on the service provider to forge the relationship with the on-shore partner. Managing expectations in terms of cultural differences and creating a culture of "partnership" rather than a role of a "service provider," can go a long way in building a successful relationship all around.

SSON News and Analysis
Posted: 07/09/2012

member

Join for Free

EVENTS OF INTEREST

United States
February 25 - 27, 2018
The Peninsula Manila, Makati City, Metro Manila, Philippines
March 18 - 21, 2018