“A pivot is a change in strategy without a change in vision”. Are we now approaching a pivotal point for shared-services and offshoring?
We are seeing a growing increase in the use of robotic automation in the office workplace.
For many countries the impact of globalisation has led to an increased focus on creating jobs at home rather than abroad.
It would be prudent for us to “hit the pause button” and consider where we go from here.
The quest for operational efficiency
Let’s be honest, the strategy over the last fifteen years has been a quest for greater and greater operational efficiency. Many Shared-Service Centres (SSCs) started life with one function; to support a single country or region.
As we became comfortable with the model, the scope expanded to include other functions.
Standardisation of processes and systems enabled us to support an increasingly diverse group of businesses across bigger and bigger geographies.
However, we didn’t just focus on increasing scope to capture economies of scale; we also tackled the underlying cost of SSCs operations.
We offshored shared-services to countries with lower labour costs, often engaging outsource providers to deliver part of the scope.
These trends appear to be continuing, on a global scale, as we now move to Global Business Services (GBS).
Deloitte’s 2015 Global Shared-Service Survey reported that 78% of SSCs now provide services to one or more continents and over 50% of the SSCs are based in emerging countries.
However, is it time for us to revisit this strategy?
The robots are coming
When I hear the word robot, I immediately picture R2D2 and CP30 from Star Wars or Honda’s ASIMO.
However, this term also covers software robots.
Software robots are loaded on a computer and are trained to mimic the human user. They are at the heart of the new world of Robotic Process Automation (RPA).
RPA is an emerging form of back-office processing technology which is looking at further automation of routine tasks.
These new automation technologies are not the only development. The impact of our quest for operational efficiency is also becoming very apparent.
Shifting political landscapes
Manufacturing is already in the media spotlight with statistics showing a loss of jobs to automation and overseas locations over the last decade.
There is now a renewed focus on creating manufacturing jobs at home rather than abroad, particularly for goods destined for the home market.
Is it only a matter of time before services come under the same level of scrutiny?
Our strategy of further migration of more service positions to GBS located outside the country could be met with opposition.
Time to hit the pause button
RPA offers us opportunities to automate more routine processes, including those in existing offshore and outsourced locations.
In the future, it will be possible for us to run automated applications for knowledge-based work (e.g. business analytics) in the location where the output is required, rather than consolidated in a GBS or moved offshore.
As in the case of manufacturing, further automation is unlikely to lead to re-shoring actual jobs.
However, it is possible that RPA will enable us to "repatriate" many processes from offshore locations into local data centres.
This will create some high-value jobs for skilled process designers in home locations.
As the political landscape shifts, new automation technologies offer potentially new and exciting business step-changes.
We are now at a pivotal point in our journey. We need to build these developments into our future shared-service, offshoring and outsourcing strategies.
Tim J. Roberts is an independent management consultant specialising in business transformation. Tim builds and delivers major transformation initiatives, focusing on the corporate functions (e.g. finance, procurement and IT), across industries as diverse as energy and aviation.
He constructs strategic business cases, designs target operating models, builds new organisations and helps develop team capabilities. He has successfully led several multi-year major ERP technology programs and is well versed in building Shared-Service Centres and the strategies for Business Process Outsourcing.