Digital transformation and ROI of technology investments: Managing the present or leading the future?

"Too many people still sit in silos in terms of their
data, governance, etc. Leveraging integration is where the true value will come from. And, in most organizations, shared services is the only place
where end-to-end processes meet."

Progress has no comfort zone – and with technology driving so many business models and operational leaders constantly being challenged to rethink their strategies, “discomfort” is something you're going to have to get comfortable with.

Increasing the speed and value of innovation whilst reducing Total Cost of Ownership and complexity of legacy technology landscapes are imperatives in today’s shared service models.

Faced with so many new technology options and the “hype” around digitalization, you will need to consider how durable and sustainable each investment decision is.

Tobias Sebastian Unger, Head Organizational Development and Strategic Projects at Siemens Shared Services, shared tips with delegates at the European Shared Services and Outsourcing Week 2017, recently.

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The first thing to consider, he reminded us, was "Where are you already invested?" – because leveraging the strengths of existing technology options already on hand first will avoid adding additional layers of complexity without cannibalizing past business cases.

From a technology perspective there are four key ingredients for the shared services automation journey:

1. the digital core/ERP system (systems of record)
2. interface technologies (like EDI or blockchain)
3. platform technologies (like BPM solutions or middle-layer platforms) and
4. automation/virtualization technologies (like RDA, RPA)
   
   

Additional technology investment decisions are most effective when you consider the ERP, interface, and platforms already in existence. Even with Robotic Process Automation – the “next big thing” on the technology agenda – landscape considerations matter, as RPA needs to integrate into the multi-layer automation strategy.

When it comes to RPA, the first consideration is whether to choose a “stand-alone” solution or an integrated one (that offers BPM and cognitive capabilities, for example). As BPM and platform providers are actively integrating “upstream” RPA and cognitive capabilities, the answer might lie in your existing technology vendor portfolio – already present.

The beauty and simplicity of RPA “stand-alone” solutions are that you can deploy “automation fixes” across the broader technology landscape without actually touching or changing the process or applications behind it.

In other words, it’s an investment in “digital labor arbitrage” rather than in IT-based process automation.

Some of the concerns, but also opportunities, that Tobias flagged include:

• great technologies need followers – he actively uses the “wisdom of the crowd” to fuel innovation
• in contrast to top-down driven “heavy IT automation”, RPA happens at the user level so you need to engage your people bottom-up to scale
• setting up an RPA Center of Excellence will help you scale fast and streamline the implementation
• despite all the technology innovations that serve as enablers for automation, your only multiplier remains your “people”
• being agile also means being willing to fail fast – the last thing you want is a long living project that fails anyway
• shared service are in a unique position to drive digitalization as that’s the place where a young and dynamic workforce of digital natives meets functional experts with domain knowledge
• when working out ROI, consider cost and value. Whilst cost is easily definable, most business cases will fail if value-add for customers (e.g.  quality, speed, insight) is not considered
  
  

Tobias ended by reinforcing the idea us that “digitalization is an enabler for shared services”. Across the organization, too many people still sit in silos in terms of their data, governance, etc. Leveraging integration is where the true value will come from.  And in most organizations, shared services is the only place where end-to-end processes meet.

“That makes us part of the solution, rather than part of the problem,” he says.

Also read: The "Gig-economy" – what are you doing about it?