A New SSO Model with Value at its Core: From a Pyramid to a Diamond
Rethinking Your Shared Services Operating Model
These days a lot is being said about the future of Work! We are seeing more and more reminders in our social media streams about the oncoming skills gap, the jobs displacements, fear of the unknown as well as the promise of exponential opportunities coming from the Fourth Industrial Revolution. This was also a key theme at Davos during the World Economic Forum 2019 Annual Meeting.
With traditional models of business being disrupted, there is a fair bit of concern on how the SSO ecosystem would develop and adapt to the fast-evolving market realities. Or even better, how we (leaders of SSO) can influence our organizations to chart a path to be an early adopter of the emerging trends, if not to be the pioneer. Let us explore this exciting path, starting with Value!
Value is at the Core
Value is at the core of all business! Every customer is paying the business for the perceived value from the product or service offered by the business. Similarly, value is the currency that buys SSOs a seat at the table to influence the C-suite in defining the strategic priorities.
So, let us try to understand value through the three layers of contribution an SSO can make in an enterprise:
- Utility Value is at a very basic level, where we ensure that the orders are booked, invoices are paid, queries are answered, cash is collected, books are closed and so on – the essential bread and butter of stable operations. The utility value expectation from an SSO is met when service level targets for volume, cycle time, quality, compliance, reporting, and customer satisfaction are being consistently delivered within cost targets. Highly efficient and stable operations focused on ‘Utility value’ builds trust on the SSO.
- Ease of Doing Business is when customers, business and functions start considering the SSO as an agile partner, able to adapt to the evolving business demands while handling disruptions seamlessly. Here processes run effectively, incorporating applicable industry best practices and maintaining a high level of business engagement with robust governance while providing real-time, decision-supporting insights to stakeholders and continually expanding the customer experience. SSOs start to contribute to P&L savings through process levers and process optimization beyond labor efficiency.
- The Wow Factor is when the SSO starts positively surprising business stakeholders with process innovations and lean digital solutions, thereby elevating the partnership to a strategic consultant level. Here the SSO is able to demonstrate expertise in cognitive automation, intuitive and sophisticated self-service offerings, data-science based business simulations, and overall becoming a champion for pioneering emerging business trends. The contribution level and budget funding of an SSO at this level can be similar to that of a classic R&D function.
The Wow factor stage emerges when the enterprise goes to the ‘SSO oracle’ to look into the crystal ball (of advanced data science) to make predictions on product mix, customer demand, channel health, and competitor behaviors. That may be a long stretch for many organizations that are currently at the stage of chasing the SSO oracle to predict when a highly escalated long overdue invoice will be finally paid!
While many of the modern digital solution providers and savvy consultants are marketing promises to swoop an organization straight into Wow factor mode, the mundane reality is quite different. Delivering spotlessly on service levels (Utility value) and having a track record of process enhancements (improving ease of doing business) is a prerequisite for reaching the Wow factor stage of engagement.
The Traditional SSO Pyramid
The traditional approach to SSO can be considered a pyramid model across the dimensions of Labor, Value and Business Engagement:
- Labor pyramid has historically been built with a focus on low-touch high-volume transactional work content. This resulted in a high concentration of low-cost resources engaged in transactional tasks at the bottom of the pyramid, with a modest number of next level roles/experts based on the scale of operations, the span of control and engagement needs.
- Value offered at the base of the pyramid was essentially at the utility level with occasional modest forays into improving ease of business with customer satisfaction, automation, higher-end reporting, and process improvement initiatives. Until recently, there were very few instances when SSOs truly contributed to the Wow factor, given that the focus has been on transactional work as the core.
- Business engagement has been to a very large extent with front offices and entry-level peers across the organization pyramid, primarily supporting how-to queries and operational issues handling. Engagement with mid-level management was mainly for monthly/quarterly reviews, escalations, and change initiatives. Very limited regular engagement happens with executive leaders at the top of the pyramid.
SSO Future: The Diamond Value model
Now think of flipping the value pyramid vertically and chiseling around the edges to reveal a Value Diamond, where:
- Business engagement expands at the mid-levels of the enterprise focused on tactical planning in the fields of sourcing strategies, product portfolio, financing models, market/customer insights and business simulations. Most of the low-level engagements have been streamlined to self-service and cognitive assistants. SSO has a permanent seat at the table for strategic and executive level dialogues.
- Value delivered is predominantly a mix of Ease of Business and Wow factor. Here, data-science based insights are helping functions to respond quickly to market trends, elevating their strategic contribution. Processes are profoundly optimized for agility, while transactional work is extensively automated and/or outsourced with minimal oversight requirement. SSO senior leadership is included in the enterprise-wide strategic decision-making process.
- Labor pool will have a significant proportion of future-focused skills such as innovative thinking, data science, higher-end process expertise, technology acumen, design thinking, robotics, influencing, and problem-solving. Low-end roles would be limited to compliance, supplier oversight, and legal requirements while at senior levels the higher levels of domain expertise and executive relationship building would be required.
In this model, the traditional IT function and SSO will blend together to form a digital service delivery backbone while functions are fully relieved of operations oversight and can be laser-focused on their core objectives.
Carving out a Diamond from the Pyramid
While it may sound like an ambitious task given the widely differing levels of maturity in today’s SSO industry, the fact is there are already many organizations naturally evolving to a Diamond Value model. A decade from now, not having a GBS at the Diamond Value level of maturity might be a major handicap for any large enterprise.
Steps involved towards building Diamond Value model are:
- Setting ideal state targets after deeply analyzing the current state across the 6 Dimensions of Process, Operations, Employee mix, Leadership, Data providers and Customers;
- Defining a value road map with C-Suite buy-in; covering tools, data, partners, methodology, governance, and business impact milestones;
- Reorganizing to bring IT and SSO within the same C-level structure with aligned objectives and technology ownership;
- Disciplined execution with an exceptional focus on moving up the value chain within a robust operations framework;
- Transparent delivery with a regular report on progress to senior stakeholders seeking incremental sponsorship;
- Fostering a Culture of Innovation to fully leverage and expand the current human capital;
- Investments in training and talent attraction to elevate to the required labor/skills mix;
- Shifting end-to-end process ownership, data ownership and accountability to SSO;
- Continually revisiting the delivery model and governance with progressive levels of automation, self-service, and outsourced delivery.
I consciously avoided discussing Artificial Intelligence, Machine Learning, Process Mining and Blockchain in this article as those technologies are mainly means to get to the Wow factor value described here.
Plus, I enjoyed the challenge of writing an article focused on the SSO future, without using those terms.