The Sharing Economy and Lessons for Shared Services

These days it's difficult to find a start-up company that isn't somehow associated with "the sharing economy" or "collaborative consumption." Simply browse the latest venture capital headlines, and companies like Uber, AirBnB, Zipcar, Boatbound, Rent the Runway, and others will sort to the top. One man’s trash is another man’s treasure. Not being one to ignore a disruptive business trend, I recently spent some time working with a start-up company called Lonely Crates (full disclosure, I am now an investor). Lonely Crates facilitates the re-use of premium shipping crates used by museums, art galleries, and private collectors. They do this with the sole purpose of reducing the environmental impact of the art handling industry. The funny thing is that before Lonely Crates started, most organizations were paying to dispose of literally millions of these crates every year. This was because organizations didn’t have the storage space and "traditional thinking" suggested that the crates were trash. It was just something they had always done. As part of my due diligence I spent quite a bit of time researching the sharing economy. Not surprisingly, there were a variety of important lessons that I discovered, or in many instances re-discovered, that are highly relevant to the shared services community. With the hope of inspiring new sources of value for shared services teams, I've highlighted some insights and examples below. 1. Dust off that old IP Companies accumulate a lot of assets such as trademarks, patents, or other types of intellectual property or "know how" that may not be fully utilized. Don't let these assets sit on the shelf collecting dust. Adopting a model to license or share these assets, similar to what Henry Chesbrough proposed in his 2003 book entitled "Open Innovation", can create new revenue streams and strategic allies to help grow your business. This might be as simple as designating someone within the organization with the task of exploring new sources of revenue from forgotten or overlooked assets. 2. Consider new sources of scale The next time you're reviewing a project or an organizational budget take some time to explore opportunities that take advantage of bigger sources of scale. Open source software platforms, re-useable code from solutions like Github, and cloud hosting from companies like Amazon Web Services or Rackspace may enable your teams to build a better product or process, at a much lower cost, in a much shorter period of time. The scale, robustness, and continuous innovation that many of these platforms wield likely surpass any "home grown" capability. And since they're shared, the costs are typically very low. 3. Share and share alike One cost driver for many businesses is supply chain logistics. There are a variety of different techniques that allow businesses to maximize the use of shared shipping assets. This might include back hauling, LTL (less than truck-load) sharing agreements, or partnerships between shipping companies where local consumer delivery is managed by the US Post Office to reduce rates. This idea extends to "knowledge based" resources, too. Instead of relying solely on "home grown" training content, many companies can benefit by instantly leveraging pre-existing training solutions on websites like uDemy, Coursera, or Lynda. Additionally, many of these sites allow thought leaders to publish training for a fee to the user base. Similar to other IP, this provides companies with an opportunity to create revenue from knowledge assets that were primarily viewed as a necessary expense. Imagine turning a learning and training cost center into a source of revenue! 4. Turn trash into cash Another potential source of cash is monetizing waste streams. Just like in the Lonely Crates example previously mentioned, somewhere, your company is probably paying big bucks to have waste or other scrap materials removed. If managed appropriately, this source of cost can actually be transformed into revenue. Cardboard, metal, wood, organics, or other waste-streams are all possible sources of revenue. They can also provide the added benefit of improving overall sustainability of the business. 5. The workforce outside your walls In the sharing economy, anyone can potentially contribute to your business. For example, mobile apps like Gigwalk and Fieldagent enable businesses to assign tasks to qualified candidates with via a mobile phone. This is compelling because it empowers businesses to execute localized tasks across broad geographies with minimal costs. While crowdsourced tasks initially dealt with basic activities like surveys, in-store audits, or competitive intelligence gathering, they are now expanding to include more complex tasks like photography, installation, and customer service. The trend can also extend to innovation. This opportunity was summed up well by Bill Joy, one of the co-founders of Sun Microsystems, when he said, "No matter who you are, most of the smartest people work for someone else." With this in mind,companies like Innocentive, Kaggle, and Spigit have designed platforms to help companies tap into the expertise of people outside your company to solve wicked problems. Summary These 5 lessons are just a starting point to begin exploring what’s possible. What’s most exciting is that shared services organizations are perfectly positioned to be thought leaders in this space. The sharing economy is simply an extension of what shared services organizations have been doing for years. So please join in the discussion. As a source of additional inspiration for others it would be great to hear real-life examples of how you have applied principles from the sharing economy to create more value for your organization. [eventpdf]

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