Over the past few years, we have witnessed the evolution of India from being a preferred low-cost service outsourcing destination to one where cost-arbitrage no longer figures as the key selling point. Recently the Chairman of Wipro, Rishad Premji, in an interview outlined how large global players come to India not for its low cost, but to access the large seemingly inexhaustible pool of top tier tech talent. With the Indian IT industry, contributing 8% of the country’s GDP, rising from less than 1% around 30 years ago, the need to better understand and leverage our talent dynamics is critical.

‍

‍

The Automation Conundrum

Automation has been long touted as a key evolutionary trend in the story of outsourcing in India. Shared service centres, both captive and third-party, have particularly embraced RPA technologies with open arms. Given the cost, productivity, and efficiency benefits of RPA it’s easy to see why RPA has caught the attention of shared services professionals.The biggest drawback has been the lack of significant success stories to speak of from the Shared Services world. The primary reason for this is a lack of long-term vision while driving automation story. This siloed automation, often does not scale up to deliver long-term, strategic benefits. RPA is still highly relevant and offers significant value potential but needs to evolve beyond silos and embrace complex business rules and human-based decision-making.

‍

‍

Innovation and Value-addition

The key to this puzzle lies in innovation and value-addition beyond just efficiency improvement and workforce reduction. Automation was touted as innovation, but of late the realization is that automation by itself is not and does not drive innovation. The usage of digital solutions, risk assessment, customer needs and expectations have all changed post-COVID 19. The emphasis today has shifted more towards agility, reprioritizing initiatives, and continuous value delivery. Simply stated, automation needs to evolve towards improving governance and overcoming roadblocks. One of the opportunities being explored is combining automation with human interaction. This will ensure the ability to define different performance and success metrics for different processes, locations, and functions across an organization.

‍

‍

The future is intelligent and digital

Hyperautomation, which embraces multiple technologies such as AI, ML and RPA, is one of the much sought-after technologies today amongst GBS and SSC operators. The advantage of Hyperautomation is that it can ensure that automation always delivers a customer experience. Customer experience will be the key result of all transformation initiatives. Increased usage of tools such as self-service portals and chatbots will ensure a capability to stay ahead of the competition (in the third-party world) and ensure continued value creation (in the captive world). Hyperautomation in conjunction with process mining tools will ensure that the organization is always aware of the process and its evolving dynamics. This will offer tools and opportunities to always drive continuous improvement. Process mining will open a new paradigm of hidden scenarios and trends within the processes being managed. New technologies like blockchain will be embraced by organizations increasingly to ensure transparency and improve risk management.

‍

‍

Value Creation will hold the key

Shared Service Centres have already shown the ability to drive efficiencies from a cost and operational perspective. The next lever to unlock potential would be value creation. Value creation is the ability of the organization to deliver value to the client / parent beyond low-cost transaction processing. The ability of the SSC to move beyond the back office into the realm of decision making and organization-wide change enablement is what will hold the key.

‍

Enable decision-making: Analytics has been embraced by many organizations and SSC across the board. The fact that the SSC sees data from all functions in an organization provides the opportunity to offer holistic organization-wide solutions that drive impact. SSCs were a business case to reduce cost from the back-office of the organization. The time has come for the SSCs to help reduce cost across the organization. This would mean acting as an internal consulting organization to help identify opportunities for continuous optimization.

‍

Change enablement: The oft used phrase Digital Transformation will become the focal point of the SSCs role. Given the visibility that the SSC has across the organization, digital transformation and improvement of processes and functions using tools and technologies needs to be driven by the shared service organization. The availability of data and qualified resources will ensure that the SSC can deploy resources and the required skillsets, provided they are given sufficient authority and opportunity to drive such change.

‍

On the whole the next phase in the evolution of Shared Services will be driven by digital and value-creation as the two main pillars. It will be up to the organizations using them to leverage this emerging trend and ride the wave. Ensuring that the organization is prepared to face eventualities and threats to business models, such as the COVID-19 pandemic, will depend on agility of the organization to embrace change.