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Current trends in changing SSC /GBS operating models

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Current trends in changing SSC /GBS operating models
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Mariusz Szałaj

Modern business services sector has been developing in Poland for over 20 years. During this time, our country has become one of the most important places for the centralization of business support functions, not only on a European scale, but also globally. The U.S. branch of Deloitte, in its “Global Shared Services 2019 Survey Report”, identified Poland as the second best center for locating SSCs in the world after India. This is a bit too optimistic a statement, because the growth dynamics of the sector in our country is clearly slowing down, but indeed Poland is still a major player in this market.

According to the ABSL report “Modern business services sector in Poland 2019”, in Q1 2019 there were 1.4 thousand BPO, SSC /GBS, IT, R&D service centers operating in Poland, 66% of which were foreign entities. Total employment amounted to 307 thousand people, which is a 10% increase compared to Q1 2018. These numbers strongly emphasize how important the modern business services sector has become for the Polish economy.

Over the years, shared service centers have evolved from simple Shared Service Centers created mainly due to salary arbitrage and covering single services within an organization, through multifunctional Global Business Services creating added value for companies, to units of strategic importance in business structures, not only providing integrated services on a global scale, but also leading in the area of end-to-end process optimization and business transformation.

What does the future hold for us?

According to Deloitte’s “Global Shared Services 2019 Survey Report,” the three primary changes respondents intend to make in their companies in 3-5 years are:

  • Robotics
  • Continuous improvement process
  • Digitization

These answers come as somewhat of a surprise, given that all three of these buzzwords have been known and promoted in the sector for years. Simply put - there is nothing new here, nothing revealing. Digitalization and continuous improvement are the absolute foundation of an effective shared service center. And the relatively latest of these trends, namely robotics, has been present at every industry conference for at least 4 years. Anyway, the same report says that already 63% of surveyed companies have at least 1 process automated.

Robotization of business processes

The term robotization may suggest very modern solutions based on complex technologies. It is associated with futuristic visions of robots taking over human work. Meanwhile, robotization is nothing else than process automation. And of course it can be based on complex algorithms, cover entire processes (end-to-end) and contain elements of artificial intelligence and machine learning. But it can also be quite simple and aimed at automating smaller tasks or activities in order to increase work efficiency and eliminate human error without generating the need for large investments. Robotic Process Automation (RPA), Robotic Desktop Automation (RDA) or Cognitive Intelligence (CI) - there are many possibilities, the most important thing is to choose the right ones for your organization. Therefore, before deciding to enter robotics, it is necessary to conduct an audit of business processes and assess their current state (AS-IS). It may turn out that only some optimization or standardization of processes before the implementation of robots will allow to achieve the appropriate effect of scale and ensure return on investment.

Competencies and talents

Looking for trends and clues as to what the modern business services sector may look like in the future, let’s now look at the aspect of employees’ competencies. According to the PWC report “Business Services Trends for 2025” the key skills will be primarily analytical (40% of responses) and the so-called data crunching (23%). At the same time 80% of respondents emphasized the need to invest in soft skills. In view of the growing importance of technology in business, the most important will still be the communication and creativity of employees and teamwork. However, the methods of acquiring competences from the market will be new. Going back to the previously quoted Deloitte report “Global Shared Services 2019 Survey Report”, we learn that shared services centers will use the crowdsourcing method when searching for competencies. It is a process by which an organization outsources tasks traditionally performed by employees to an unidentified, usually very broad group of people. Crowdsourcing allows all Internet users to participate in tasks previously reserved for a narrow group of specialists. It is worth remembering this phrase, as it appeared for the first time in this type of industry reports.

Cyber Security

Cybersecurity is another important factor that undeniably needs to be considered when planning to build, optimize operations or expand an SSC. According to 69% of the CEOs of financial institutions surveyed by PWC for the “PwC Financial Services Technology 2020 and Beyond” report, cyber threats will be a major risk for their companies. The global reach, universality and accessibility of cyberspace makes it increasingly vulnerable and susceptible to various types of cyber attacks. A.P. Møller-Maersk, which was forced to replace more than 4,000 servers and 45,000 computers after the NonPetya attack, can serve as an example and a warning to all. The entire operation cost Maersk between 250 and 300 million dollars and had a significant impact on the company’s stock price.

Summary

Operational models of shared services centers continue to evolve, and business transformation has become a permanent feature of the SSC / GBS organization’s management agenda. New technologies offer opportunities that not long ago we could only dream about. To take advantage of them, you need to prepare well - set a clear goal, acquire appropriate competencies, structure processes, secure infrastructure and data. And watch carefully what’s new each day - the ability to adapt to changes and take advantage of the benefits of the digital world may determine your success or failure.