How Are New Digital Technologies Empowering Shared Services?

The power of Digital is all around us, but how far have you embedded it into your services? Whether you build it alone, or lean on outsourcing partners, your eye should be firmly on outputs. Digital business is a reality. Even the most traditional brick-and-mortar companies that missed the dot-com wave the first time around, are avidly surfing it now. But digital business is about a lot more than just a website and a social media presence. At its simplest, the digital evolution is about replacing labor-intensive activity with software-driven workflow. At it’s most complex, it is about redefining the business as a fluid, free-flowing, mobile-enabled, information-driven enterprise. And even though customer service is an obvious example of the value of digital engagement, similar automation can be deployed throughout the value chain, including HR and F&A services. While sales and marketing functions have been quick to react to the opportunities to develop more customer intimacy, business services need to follow. Proactive businesses that don’t want to be left behind are already investing in mobile apps that support shared services, pushing the self-serve agenda, leveraging analytics to include big data, and embracing SaaS for ease of use. Other "digital" solutions include OCR technology, e-invoicing, collaborative platforms, enterprise management systems, and workflow management solutions that have become so common in the workplace. The challenge, however, lies in getting decision makers – and that will include the executive board – to buy into the innovative and often disruptive technologies that drive internal processes. With the ROI for these not so obvious (you are not building a car, after all – you are supporting an evolving business) getting the resources you need is a challenge. The Digital ROI Dilemma In fact, the take-up for many of these new digital technologies has been surprisingly low, as Forrester Research's Andrew Bartels, discovered. In a post1 last year, he went as far as to claim that old methods of ROI were holding back the adoption of new technology. Measuring the ROI of new digital and disruptive technologies according to the old-fashioned standards of headcount reduction and operational cost just won’t cut it, he says. The argument against this is that digital solutions are not necessarily about doing more work, faster, and with fewer people; they are increasingly about digesting data analytics – broadly mined from the social and digital universe – and combining that with smarter ways of working. In other words, the digital enterprise is about improved performance and growth, in existing markets as well as new ones. Any evaluation of new digital solutions needs to take into account their impact on business performance. Much of this falls into the "intangibles" category, and so will require some innovative calculations. Who Drives Digital? One of the first questions companies will need to ask themselves is who is ultimately responsible for pushing the digital agenda? This goes beyond implementing mobile apps or scraping social media – it’s about how to develop a digitally enabled enterprise. McKinsey director Paul Willmott, in a recent online interview2, says that while some firms have created a Chief Digital Officer, others look to IT to drive the Digital agenda. Ultimately, though, he says you won’t advance unless you have the backing of the CEO. The single biggest challenge, according to Willmott, will be overcoming organizational silos based on functions and geographies, which will prevent the kind of collaboration that digital requires. Other hurdles relate to overcoming legacy systems which inevitably slow down an organization, and which are no match for some of the "digitally born" startups; and managing the "digital talent pool" across the enterprise. This talent is still unevenly distributed, with marketing and sales leading, but other functions showing only spotty competencies. The ability to attract, hire, retain, and apply these digital skills will differentiate the organizations that pull ahead, and will be most effectively managed through an enterprise-wide talent framework. Access to these skills translates into an ability to seamlessly integrate new digital technology, apps, data and services with company legacy systems. Having strong technical architecture skills will be a bonus, as integrating solutions will be important. Big Data Facing up to the opportunity presented by Big Data, with all that it entails, will be a key driver for the digital business. Companies that still rely on year-over-year statistics, as opposed to big data, will expose themselves to sub optimal models. Not taking part is not really an option, says Alessio Marinelli, Director of Analytics at Advanced Merchant Payments in Hong Kong, who cautions that there is real danger in being late to the party: Once your competition gains that lead it will be very difficult, if even possible, to catch up. Marinelli warns that, "While we have plenty of examples of companies who have experienced extraordinary growth as a direct result of combining internal data with relevant big data to identify a more profitable customer segment, for example, or growth markets – we can also see how the absence of a big data strategy is causing other companies to fall behind. With competition now global, and the playing field levelled, the danger of giving up a big data advantage to the competition is simply too great to ignore." Harnessing Digital Visualization The power of digital extends to reporting and, crucially, to communication. There have been a number of developments in the area of data visualization that play well into the need to communicate business intelligence across different stakeholder groups. David McCandless is a London-based guru who has reinvented what it means to present data through some interesting collaborations. "Designed data sends a stronger message" is his mantra. Designing data as McCandless does, in strong colors and proportionate to each data set’s value, means you can recognize patterns and relationships immediately, without needing to analyze the information. The design does the analyzing for you. What is key is not to present data stand-alone, as we are used to, but "in context". For shared services, this means charts that interact based on relationships and cause and effect; it means identifying root cause through a momentary glimpse of a chart; or it means recognizing trends in the second it takes your mind to process what the eye has seen. Harnessing digital opportunities for communications internally, with stakeholders, is a strong lever for getting buy-in for your services and solutions. [eventpdf] How Are New Digital Technologies Empowering Shared Services? "Digital" is powerful lever to enhance service delivery. From sourcing platforms to e-catalogs and integrated vendor portals, digital is providing collaborative, flexible access points to shared services information. The ability of shared services organizations to leverage this technology, though, defines the their place on the "digital maturity" curve. CapGemini3 segments the market into three stages, based on how new digital technologies are integrated: Newbies: new focus on automation through OCR, e-document management, etc. Arrived: focusing on optimization through digital workflows, mobile software as a service, real-time reporting, and cash collection tools The Future: advanced focus on new services like data analytics and servicing clients through Web portals and CRM tools In a more general assessment, digital impacts services delivery by reducing costs and errors; enabling compliance; providing better service and thereby improving customer satisfaction; creating a more user friendly work environment; delivering fast and accurate business insights; and making it easier to leverage new technology. The Federal Government was quick to jump on the digital bandwagon, in 20124, when the Office of Management and Budget (OMB) laid out an ambitious plan to institutionalize and standardize the mobile evolution: In its Digital Management Strategy, the administration set 29 different goals for agencies with deadlines for each, including the creation of a FedRAMP for mobile effort and a new innovation center run by the General Services Administration. "Learning from the previous transition of moving information and services online, we now have an opportunity to break free from the inefficient, costly, and fragmented practices of the past, build a sound governance structure for digital services, and do mobile ‘right' from the beginning," OMB stated. Steven VanRoekel, Federal Chief Information Officer,said OMB will lead an effort to develop a government-wide bring-your-own-device (BYOD) policy.Through the Digital Strategy Innovation Center, which will be run by the General Services Administration, agencies will have an application development platform, a mobile device management platform and a consistent way to apply analytics to websites and online resources. "Part of this is getting these communities together not only to work together collaboratively across the different audiences, but focus on a cross-governmental approach to the things we are doing," VanRoekel said. "We tend to have centers of excellence in small places around the government. We'll have some agency doing great work analyzing security around devices. We'll have one agency doing a great job with bring-your-own-device. We'll have one agency focusing on an application delivery model for mobile. The goal here is to have a strategy, have a set of permissions, to work across government to get the government to be more consistent. Let's take those best practices and scale them laterally versus just in the agencies in which they exist." "Digital IQ" The most significant differentiator for digital businesses will be the ability to view digital as an enterprise capability, rather than centralized in one function. More fundamentally, what will ultimately differentiate a digitally powered enterprise is integrating new technology solutions right at the core of operations – not as bolt-ons. This ability to understand, value, and weave technology throughout the enterprise is what consultancy PWC describes as a company’s "Digital IQ"5. The firm’s research has shown that companies with strong Digital IQ scores were 2.2 times more likely to be top performers in revenue growth, profitability, and innovation. PWC suggests the drivers for Digital IQ include CEO sponsorship, strong CIO/CMO relationships, and an "outside-in" approach to leveraging external innovations for internal processes. This ability to adopt new innovations from outside the firm is a crucial issue, and far outweighs any improvements driven by internal brainstorming or workshops. You could, perhaps, just follow the money: Last year saw the highest level of venture capital Internet investment since 2001 [$11 billion in funding]. Of this, software deals accounted for 37%.6 Summary With all the monies flowing into innovative software developers, organizations will have their pick of solutions. What will drive their decisions, ultimately, will be the capability and culture that defines their enterprise. Adopting new solutions requires strong leadership, agility, and the mandate to push them through. While technology choices are broad, whether an organization will opt for robotic process automation, cloud solutions, mobile capabilities, or data analytics will depend to a large extent on its ability to embed these solutions across the business. [Note: if you liked this article, please use the buttons on the left side of the screen to share it across your LinkedIn groups. Thank you for being part of SSON's community - Barbara Hodge] References 1. Old ROI Methods Are Holding Back the Adoption of New Technology(https://blogs.forrester.com/andrew_bartels/13-10-31-old_roi_methods_are_holding_back_the_adoption_of_new_technology) 2. The Digital Enterprise, Interview with Peter Willmott, Director, McKinsey 3. Shared Services Centers: The Next Generation, 2013, CapGemini 4. OMB Unveils Ambitious Digital, Mobile Strategy(2012) 5. The Five Behaviors that Accelerate Value from Digital Investments, 6th Annual Digital IQ Survey, 2014 6. PWC/NVCA MoneyTree report based on Thomson Reuters data.

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