Four Days in Berlin...

I’ve recently come back from SSON Shared Services & Outsourcing Woche in Berlin – an annual event that brings together some of the most active and successful service delivery leaders across Germany. I had been looking forward to a great opportunity to learn, first-hand, from other professionals about how to put my company’s situation and development in perspective, and understand what future trends may impact our goals and strategy. The Berlin conference is primarily focused on German participants and companies. Apart from the well-known consulting firms and some BPO providers, most participants came from large, often multinational enterprises headquartered in Germany. The first aspect that amazed me was the apparent lack of representation of German mid-sized companies, or Mittelstand, as we call it here, which is known as the backbone of the German economy. These companies generate more than 30% of German GDP and I am sure that many of them would qualify for outsourcing or establishing a captive SSC, even more so if they belong to the group of hidden champions with global businesses but who are only known within their industry. According to some of the experts I spoke to during the conference, the German Mittelstand is traditionally much more hesitant to outsource or offshore certain functions, although acceptance is growing. I could imagine if these companies were offered BPO within Germany that they might be more interested. The cost advantage might well be small, or even non-existent, but the access to specialist know how might be worth it. Another surprise for me was the fact that even large, well-known German companies were still mainly in the planning phase regarding SSC and outsourcing. I almost automatically assumed that all of the sizeable companies had embarked on an outsourcing / shared services journey decades back. It was interesting to hear that being a late mover is not necessarily a disadvantage, though. Yes, there could have been achievements like cost savings, efficiency, quality improvements had these companies started years back. However, they are evidently benefiting from the learning curve of other mature companies and don’t have to repeat the same mistakes. As our world is changing so fast, constantly generating new technologically driven opportunities to automate and simplify, the advantage of labor arbitrage is declining. Thinking about my former company: if they had to decide today on location and organizational setup, the decision might have been a completely different one. [inlinead] Another group of companies – you might say the stars of the scene – started their SSCs or BPO decades ago and are very advanced and mature, with large, stable and sometimes hybrid multi-tower SSCs across the world. For this group, other aspects are currently in focus: Some of them are making a conscious marketing effort to shift their image from that of cost centre to contributor to bottom line success. Creating value by adding new, additional service elements that were initially not considered to be within the capability and skill-set of an SSC entity, is a new goal. I think that marketing matters a lot – I experienced this myself – but it needs to be based on credibility and that only comes from delivering on what was promised to internal customers. Last but not least, I realized how many companies are still working on process improvement – and not only those driven by IT changes. It surprised me that for so many SSCs, process is still a very current topic. Some of them may have built SSCs in a hurry, forced by cost pressures, and thus lifting and shifting processes never mind how bad and diverse they were. They are now in the phase of standardizing and simplifying. Based on my own experience, your SSC processes may be in good shape, however, up- or downstream there is often room for improvement. But it requires skills and resource to improve on the end-to-end process. In some companies, ownership for end-to-end process management and improvement was assigned to the SSC, trusting their capability and experience. The company I used to work for even offered process and quality improvement as an SSC service stream to the entire company. As in previous years, I really enjoyed my days at the SSON conference. I am convinced that we will see more and more functions being provided by specialized entities, be it through BPO or captive SSCs. So there is a lot more going to happen – stay curious! Editor's Note: Rita Thies will be writing a regular column for SSON, based on her experience in developing and building a global SSO, and shifting work from country activities into the global framework. She subsequently took on a quality and process role within the new GBS. It’s given her a lot to talk about…

Four Days in Berlin...

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