Many organisations are relentlessly focusing on achieving cost reductions from shared services, but struggling to unlock strategic value to help their businesses thrive. Only 21% are seeing benefits in areas such as organisational flexibility and scale, compared with 62% in reduced operating costs.
Following on our research, The 50:50 gamble: winning the shared services bet, outlining the secrets of the best shared services organisations, we interviewed 40 shared services leaders to understand how the industry is evolving.
Today's volatile environment is pushing established companies to rethink their business models to become more dynamic – and able to quickly respond to external changes whilst remaining efficient and profitable. Shared services functions are challenged to take a more strategic partnership role with the business and equip them to deal with this uncertainty.
Those that understand the importance of the balance between delivering cost and business value, and how technology plays a key role in delivering it, will become strategic partners that steer their businesses within this fast-changing, volatile environment.
Scope keeps expanding:
Companies are slowly expanding the scope of their shared services – with HR, finance and IT services still being the main areas. But we see more front-end functions being actively added – most notably, analytics and customer services.
Functional shared services still dominate:
Many companies are still operating silo functional shared services as opposed to multi-functional or global business services – still streamlining and reducing costs functionally, rather than considering the wider benefits from cross-functional integration.
Insourcing is on a rise:
The previous balance between insourcing and outsourcing seems to be shifting towards insourcing. Respondents mention the need to rebalance the all outsourcing approach as it's struggling to deliver the flexibility and quality required by businesses.
A flexible shared services organisation is required:
With a more fluid environment, organisations need to be more dynamic to quickly react to the changing demands. Shared services need to support this – 'increased organisational flexibility and scale' is ranked second to 'reduced operating costs' as most important objectives.
Customer experience of shared services faces 'Uberisation':
Customers of shared services are becoming more demanding – they want information and query resolution in real time. This mimics the service they receive from the likes of Amazon and Uber. Shared services still need to improve on internal customer satisfaction.