Knowledge Management and Shared Services: Bridging the Vast Change in the Global Enterprise

The last half-decade has seen a rise in shared services centers and a more complex landscape involving hybrid and innovative business models in global services, including a move …

The last half-decade has seen a rise in shared services centers and a more complex landscape involving hybrid and innovative business models in global services, including a move from traditional “Lift & Shift” BPO to joint ventures and business structures of a more strategic nature for both customer and provider.

Nearshore Americas spoke with Shared Services veteran Esteban Carril to identify forthcoming trends in the BPO/Shared Services industry, with a specific eye towards the Americas. Now managing director for Latin America at consultancy Chazey Partners, Carril has a long career including as the Latin American shared services director for 3com, where he led the rollout of SAP across eight countries, and at EMC, where he led Latin American shared services.

Trend: Shared Services and BPO will continue to evolve to more hybrid and tiered models as companies move beyond cost-cutting to seeking added value from SSC centers and outside providers.

“Many SSOs have already standardized their processes and have largely capitalized labor arbitrage. This means that expectations that mature SSOs will deliver cost reductions as they have in the past are becoming more difficult to meet. They are constantly challenged to redefine their back office service delivery strategy to achieve more and this means that their focus should not only be cost and quality, but rather innovation,” says Carril.  “In this sense, some SSOs will be looking to expand their traditional scope of services to become ‘multifunctional organizations.’ They are currently moving beyond their traditional back office function-based, becoming strategic partners to the enterprise by delivering services that solve end-to-end business problems, and innovating to create overall business value.”

Trend: Shared Services operations will continue to migrate to the cloud, enabling unified platforms across national borders, and allowing operations to adopt a global “centers of excellence” approach taking advantages of talent wherever it may be located, and allowing almost real-time adaptation to shifting requirements, customer and market demands.

“BPO  will continue developing as a practical sourcing option for several mature Shared Service Centers that are willing to take further cost out or move up the value chain of service delivery by leveraging a third party to take on the already standardized processes. These types of services are expanding to include not only the typical transactional processes but also customer facing roles such as collections for example,” says Carril.

Trend: Enterprises are taking a “black-box” approach to ERP. Previously, companies went through the process of selecting an ERP software vendor and hiring consultants and integrators to retool the entire enterprise to conform to the chosen platform. While this will likely never completely go away, companies are now buying the business function, the result, more so than the technology. Platform selection and technology implementation is becoming a function of the SSC business unit, instead of the IT or even CIO function.

Says Carril: “The rapid advancement of technology has demanded organizations to look for BPO providers to take advantage of their investment in new technology, automating processes to reduce costs and improve service levels. This has created a big gap between teams working on process and technology changes through BPM or Process Management initiatives and the ultimate people in the organization who are impacted by those changes.

“Many of these organizations need to develop a comprehensive global knowledge management strategy in which data management is a value-added process and where the organization can use their BPO provider platform to organize, control, update and enhance company knowledge,” adds Carril.  “Knowledge Management is absolutely critical in today’s environment and it needs to be closely linked to the constant changes occurring in technology and processes and the people in the organizations who perform related roles. I think Shared Services is perfectly positioned to lead the knowledge management efforts and act as a link between the rapid changes taking place in technology and process and users who are expected to quickly absorb and execute those changes.”

Trend: Social media is changing the game for customer experience, whether outsourced or handled in-house. Companies are now faced with the tremendous challenge of developing native competency in these disruptive technologies—and non-consumer facing companies are no exception, or move quickly to vet and select a strategic partner with proven competency and demonstrated flexibility to adapt. This field won’t look anything like it does today 36 months down the road.

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“Social media has dramatically changed the game to truly listen to your customers more than even before. It enhances your traditional CRM by listening for and engaging with social media conversations, tracking new leads from a tweet or Facebook post and moving them into your sales funnel,” says Carril. “However, customers want to work with companies that they care about them and want to connect with real people so it is absolutely critical that you have a good platform for conducting social CRM and you have the right resources. Social media is an amazing opportunity to deliver great service but it is also a potential source of frustration if the organization is not prepared to solve problems.

“I would also suggest making sure to use social media as a two-way conversation channel with your customer and not just pushing information at them. This also means that companies should be monitoring periodically what customers are saying so they can quickly respond. Social media should be part of an integrated and centralized CRM strategy. Social media is not always the appropriate way to communicate to a customer and a clear contact management strategy will help company identify the key customer interactions and then determine the best way to channel their multiple requests (email, telephone, social media, etc),” adds Carril.

Trend: The migration of the nexus of BPO will continue to evolve. Traditionally it has followed first a trans-pacific pattern from the USA to India (or from Europe to India trans-Asia), and then a north-south route in the Americas, and a Western-Eastern nations pattern in Europe. As economies grow in nations that have served as low-cost providers in the past, these patterns are becoming more muddled. Political and quality-of-service considerations have seen more nearshoring as opposed to offshoring, and the previous clear delineation between provider economy and consumer economy is breaking down.

“Offshore centers (for both internal and external service providers) have been established in many lower cost locations around the globe.  Initially these were located in Central/Eastern Europe and India, but now also in many other regions and countries such as in Latin America, the Philippines, Indonesia, and China.  As the outsourcing model has developed many outsourcers have more recently themselves gone to a multi‐shore model with their own operations having some locations back ‘closer to the customer’ in Western Europe and the US, for example. The Latin American markets are still growing, though not as fast as Asia, and in somewhat patchy spurts. Companies see a lot of opportunities for expanding within the region, as well as globally. To do this, they’ll need to leverage a reliable and flexible service delivery framework. We are increasingly seeing signs that the market has recognized this. So while cost reduction through labor arbitrage is still the number one driver for offshoring operations, and probably will remain so for some time to come, what’s also emerging is a strong need to get closer to the customer,” says Carril.

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