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Myriad Musings (An exploration of Shared Services)

 

Myriad Musings

(An exploration of Shared Services)

 

Copyright 2016 Amarpreet Bhamra

Published by Amarpreet Bhamra at Shakespir

 

 

 

Shakespir Edition License Notes

This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and did not purchase it, or it was not purchased for your enjoyment only, then please return to Shakespir.com or your favorite retailer and purchase your own copy. Thank you for respecting the hard work of this author.

 

 

 

 

Table of Contents

Acknowledgements

Preface

Testimonials

Chapter One: Make in India

Chapter Two: Redefining Financial Planning and Analysis (FP&A) Roles

Chapter Three: Outsourcing and careers – the changing equations

Chapter Four: Transforming the Transformations Structure in Finance and Accounting Shared Service Centers

Chapter Five: Ignore at Your Peril: Social Media’s Impact on Shared Services

Chapter Six: Modern Day Jobs, Shared Service Centers – and Boredom!

Chapter Seven: Data and its complexity in ERP Deployments

Chapter Eight: Data Oriented Leadership – Are Shared Services Centers Gearing Up?

Chapter Nine: Have You Considered A Centre of Excellence For Invoicing?

Chapter Ten: Emerging BRIC Nations: Shared Services Model May be Solution for Education

About the Author: Amarpreet Bhamra

Connect with Amarpreet Bhamra

 

 

 

Acknowledgements

I would dedicate this book to Minakshi Bhattacharyya (my wife) and Utsav Singh Bhamra (my son). I owe my voice to the blessings of my parents Dr. Surjan Singh Bhamra (my father) and Ravinder Kaur (my mother). I do reciprocate the warmth of my brother (Gurpinder Singh Bhamra) and his family.

I also want to acknowledge the support and warmth of all my friends and well-wishers in this endeavor. I also want to express gratitude to Shared Services Outsourcing Network for lending me space to publish some of these writings.

 

 

 

Preface

The incubation of shared services evolved in the early-1990s with a multitude of organizations that climbed on this bandwagon to reap the benefits of reduced costs and improve the service levels. Shared services set ups emerged first in the US followed by similar centers in Europe and later the model was extended to Asia and other parts of the globe. In today’s environment many organizations are leveraging shared services to deliver value add to their customers apart from the routine processing tasks.

This e-Book is a compilation of my articles on various facets of shared services. My idea of publishing this e-Book is to connect with a wider set of readers and inculcate awareness on shifts and trends which may re-define the artifacts of shared services.

The articles listed in this e-Book include topics like domestic shared services, process transformations, jobs, education, data and ERP, social media etc. The writings have been enriched by incorporating appropriate reference material where ever necessary. Hence the readers will gain from these insights and thereby enhance their knowledge on the above mentioned topics.

Writing this e-book has been a fascinating experience for me by accessing and learning from the global repositories of knowledge. Over the past ten months I have been trying to articulate the structure of this e-book including the selection of articles. In this e-book I have attempted to give voice to my niche moorings which may provoke my readers into further introspection.

 

 

Testimonials

Very few writers can blend like Amarpreet, the amazing insight into the Shared Services with authentic knowledge and experience of its internal processes to actually simplify the whole ecosystem of offshoring. This book is a must read that has the potential  to produce double digit growth in productivity of managers in the outsourcing industry as well as increase the understanding of many aspects of shared services centers. 

 

Amitabh Saxena, CEO, Anexas Europe

 

 

“Through this testimonial I wish to congratulate Amarpreet for compiling this excellent collection of articles on Shared Services into an e-book. I have known him for last 6 years and know him as a person who likes to share his ideas and experiences freely. He blogs articles regularly on various forums which are an interesting read. This e-book is a recommended read for anyone new to this industry and wanting to have quick insight especially into finance domain and evolution of Shared services industry in India. I wish him all the best in this noble venture of spreading education about Shared Services.”

 

Naresh Motiani, PEX Manager, Process Excellence, Maersk Global Shared Service Centres India Ltd

 

 

“A good read for the well-initiated. Watch out especially for Chapter 3.”

 

If you need a blurb about me: 

Arindam Mukherjee – Training Consultant, Author, and Geopolitical Observer

 

Chapter One: Make in India

[_ The World Bank has projected 7.5% rate of growth for the Indian economy in the current financial year. With a new government in place there is an emphasis on driving reforms to attract investments and propel economic growth. In line with this the “Make in India” initiative is being promoted in different global economic forums by the Indian political leadership. _]

Which begets a question – what about the prospects of shared services in India? Are Indian companies willing to consider shared services model to transform themselves into competitive units? Is there a possibility to invest in shared services and provide impetus for new jobs?

The first wave of outsourcing in India which extended till the onset of economic recession was largely dominated by outsourced service providers catering to voice and data entry transactions. In the second wave there has been an expansion in the shared services market catering to finance and accounting, manufacturing, bio technology and banking sectors of the global entities largely based in Bangalore, Chennai and Gurgaon.

As an emerging market there are many sectors in India where the potential of shared services lies untapped. In the current landscape only a few sectors like telecom and banking have experimented to outsource the work to domestic service providers. India’s services sector has been notching up steady growth rates over the past few years as compared to manufacturing and agriculture. The current contribution of India’s services sector to the GDP (Gross Domestic Product) stands at 65% (data sourced from  http://indiainbusiness.nic.in/) as per Investment and Technology Promotion Division, Government of India. Moreover sectors such as services, construction, drugs and pharmaceuticals, automobiles are witnessing high inflow of Foreign Direct Investment. On a similar note Gartner has stated IT spending in India is projected to total $73.3 billion in 2015, a 9.4 percent increase from the $67.1 billion forecast for 2014.

In this scenario the domestic market for shared service centres stands to grow by co-opting either the outsourced or the captive model. A critical input for the domestic shared services would be to evaluate the ongoing paradigm shift in outsourcing. With data analytics and automations expanding their footprints the Indian companies will need to reassess the existing shared services models. A report published in www.moneycontrol.com  in 2015 states that Indian CIOs are allocating 25% of the budget towards SMAC (Social, Mobility, Analytics and Cloud) technologies. Furthermore the dynamics of labour arbitrage may not be solely attractive in the Indian environment as per the conventional shared services approach.

From a sector-wise approach Indian companies may incubate shared services set ups in public utilities (e-services, municipal/civic bodies, power utilities etc.) real estate, retail, hospitals, pharmaceuticals/drugs, education, automobiles, legal, insurance, logistics/supply chain and travel. This will enable Indian companies including those with global footprints to benefit from process efficiencies and increase bandwidth on core tasks. The government of India has recently announced the first list of Smart Cities and allocated 1 lakh crore for its development. One of the key enablers for Smart Cities would be to build shared services including data hubs and IT infrastructure to provide standardized and real-time services to the citizens.

Another critical factor to promote domestic shared services would be the growing reach of mobile banking in the rural areas. An AT Kearney report titled “Rewriting India’s Shared Services Playbook” mentions that by enabling mobile banking services, more consumers can carry out bill payments and merchant transactions given high mobile penetration of 75 percent. However, this will require multiple mobile operators and financial services providers to come together to develop the mobile money market. The report elaborates that shared platform vendors can play a vital role in enabling services such as deployment of mobile banking platform, service provisioning, transaction clearance and reporting, and support activities through a shared services model.

From a geographical spread there is room for expansion of shared services in the Tier 2 cities including the eastern, north eastern and western parts of India. The government of India has recently earmarked Rs 493 crore for the BPO Promotion Scheme and a similar policy could be extended to domestic service providers for encouraging the growth of shared services. This incentive could also provide an impetus to developing talent pool and thereby increase options of employability for the youth. Furthermore service providers and Indian companies have an opportunity to build niche multi-lingual shared services given the fact that India is home to multiple languages. In this context a blended model of rural BPOs and shared services could be tested as a proof of concept.

There is proven evidence that a lot of organizations on a global level sharpened their competitiveness by leveraging shared services. Hence it is imperative for Indian companies to seed shared services in their own backyard and further expand their value proposition.   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chapter Two: Redefining Financial Planning and Analysis (FP&A) Roles

The emerging field of data analytics now tends to cast its shadow on FP&A roles. In simple terms FP&A is the process of compiling and analyzing financial strategy for an organization by evaluating financial trends.

 

FP&A roles involve sifting through large tracts of data stored in spreadsheets, ERP platforms, performance management systems, budgeting and forecasting tools. Based on the analysis the FP&A specialists provide intelligence and reports to the senior stakeholders on the financial aspects. A lot of FP&A roles have been outsourced either to third party or captive service providers by the parent organizations.

The existing landscape in these roles could be mapped as:

*
p<>{color:#000;}. Analyse larger volumes of data sets

*
p<>{color:#000;}. Unstructured data sets

*
p<>{color:#000;}. Time intensive & largely manual

*
p<>{color:#000;}. Rely on other tools/software to generate graphs

*
p<>{color:#000;}. Knowledge & decision based

*
p<>{color:#000;}. Absence of standard process in terms of collating & interpretation of data

In this context data analytics could add value by simplifying and standardizing the process of financial planning and analysis. Data scientists could interface the large and unstructured sets of financial data with new tools. The storage of existing data in multiple platforms could be harmonized by leveraging the capability of the cloud. Moreover the new tools could interpret data in real time and thereby shorten the access to financial information. This will enable a quicker forecasting of financial trends and with greater accuracy due to less dependency on manual and multiple sources of data.

By leveraging data analytics tools FP&A could gain better insights into the customer preferences. A report published in http://ww2.cfo.com (Finance Should Hurry to the Big Data Party by Mary C. Driscoll (senior research fellow at APQC), states that two-thirds of survey respondents are too buried in basic financial management duties rather than improving FP&A capabilities. The simplification of time intensive process of assimilating and cleansing data is likely to reduce costs and allow financial/business analysts to focus on the trends and analysis. Tasks like variance analysis, ad hoc reporting, preparation of balance sheets etc. stand to benefit by usage of data tools like hypercube and Hadoop which can extract data from multiple databases and generate faster and more efficient data sets.

The usage of data tools is likely to transform FP&A by improving the existing quality and visualization of data. This will provide better insights to dynamic changes in business environment and thereby enable business leader’s right and quick decisions. However there is a need to upskill FP&A personnel on Big Data and thus mitigate the current gap of supply of financial professionals armed with data analytics.

The early adoption of big data will benefit finance functions and organizations by providing predictive analytics on business trends. This will hasten a fundamental shift in terms of decision making and future investments thereby enabling firms to be competitive in a grid-locked internet economy.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chapter Three: Outsourcing and careers – the changing equations

The global landscape for outsourcing is undergoing changes and whipping strong undercurrents in the employees. As layoffs and restructuring become common place in social media networks the shadow of job insecurity looms on careers in outsourcing.

In the initial stage outsourcing emerged as a sunrise sector due to movement of jobs to low cost global destinations by global corporate entities. The managed stage established captive and third party service providers to provide employment ranging from data entry to customer support to financial and banking services back office support. Post that outsourcing has embraced near shoring, offshoring and insourcing leading to standardization of models.

The twin forces of weak global economic growth and emergence of technology influence the current stage of outsourcing. While productivity improvements have pushed up the margins for service providers they have led to dwindling of existing jobs. Moreover the advent of robotic process automation (in early stages of adoption) is leading to fewer jobs to be outsourced. A blog in Washington Post by Vivek Wadhwa, Fellow at Rock Center for Corporate Governance at Stanford University, states that the operating cost of some robots is now less than the salary of an average Chinese worker and that unlike human beings, robots don’t complain, join labor unions, or get distracted. The newer jobs being created (for example data analytics) demand a higher complexity of skills and business knowledge as compared to earlier jobs which could be handled by graduates. Furthermore the weak economic signals in a majority of global markets reflect a contraction in creation of new economic opportunities.

In this context the risk curve shows an upward trend with regards to stability in careers in outsourcing industry. As machines become smarter and more capable they are going to perform routine tasks with more precision when compared to human labor. This is sooner or later going to lead to a situation where a large part of global workforce in outsourcing will become redundant. As per McKinsey over a 100 million jobs are likely to disappear by 2025 while a Deloitte study carried out by with Carl Benedict Frey, of the Oxford Martin School, and Michael A Osborne, of the Department of Engineering Science, at the University of Oxford predicts that one-third (35%) of existing jobs in UK at risk of being replaced due to a combination of technology, automation and robotics. CP Gurnani, Chief at Tech Mahindra has recently stated in World Economic Forum in Davos (Jan 2015) that 10-15 percent of technology jobs will become obsolete every year.

The careers shaping in the future will demand that employees create new relationships with machines irrespective of nationalities. Futurists have stated that the traditional 40 hours per week and Full Time Employees (FTEs) models are likely to be rendered obsolete. Jen Cohen Crompton states in a SAP blog that newer skills including computational thinking, new media literacy, and design mind-set, virtual collaboration etc. will define the future of work. There will be shorter roles and employees will be expected to build interactions with machines. The mechanized and knowledge intensive job market will redefine designations and erode the existing corporate hierarchy leading to disruption in careers. A report in Economic Times (Jan 23 2015) states that HCL Technologies expects a drastic change in its employee structure over the next couple of years as automation, artificial intelligence (AI) and other disruptive technologies increasingly make low-level engineers doing repetitive manual tasks redundant.

Are workers prepared or thinking on these lines? A lot of the present workforce employed in outsourcing is content to execute routine tasks and secure monetary benefits. The impact of disruptive technologies evokes laughter and is interpreted as an alarmist theory at both middle and senior levels. Interestingly a Hackett study predicts that the migration of services to India and to other offshore locations such as China and Brazil will slow down after 2014 and stop entirely by 2022. To prepare for the future it is imperative to step outside the comfort zone and invest in newer and futuristic skills. CP Gurnani Chief at Tech Mahindra has further stated that if employees in their careers of 35 years don’t change their hats ten times, there is something wrong. He elaborates that you have to re-skill yourself and you have to know new technology processes and business and then openings will be available and it is for us to adopt. A prudent choice would then be to explore beyond the realm of stability and prevent stagnation in the futuristic machine age.

 

 

Chapter Four: Transforming the Transformations Structure in Finance and Accounting Shared Service Centers

Most finance and accounting Shared Services Organizations (SSO) have evolved over a period of time and are increasingly viewed – by their respective parent units – as a key partner to optimize processes. This has led to emergence of transformation or process excellence functions with a mandate to execute process efficiencies (FTE savings) by adopting improvement initiatives for lowering operating costs and passing on the accruing benefits to their respective parent units.

The morphing of SSOs from a linear model to a hybrid model combining SSO and BPO (business process outsourcing) as well as establishing centers in emerging low cost destinations like Eastern Europe, China, Philippines and Latin America represents a new phase in shared services’ evolution. Hence the SSO’s are shifting gears to expand their footprints in order to widen the scope of process transformations and enable process management.

However, there are some key points that lie beneath the banner of process transformations and that merit closer introspection.  

1. The first point relates to the[* structure of transformations teams *]within SSCs. The predictable patterns which exist are detailed below:

*
p<>{color:#000;}. transformations team as a sub-unit of service delivery

*
p<>{color:#000;}. stand-alone transformations teams with a separate Head

*
p<>{color:#000;}. transformations embedded in process excellence teams

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p<>{color:#000;}. local (reporting to shared service management) and central (reporting to management of parent unit) transformation teams

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p<>{color:#000;}. project based teams to deliver on process transformations

Some SSOs leverage a matrix structure while others may prefer to organize their transformation teams along the lines of a functional structure. How about evaluating transformations structures in the context of structural ambidexterity vs. contextual ambidexterity? The relevance of structure enabling the success of business level or corporate level strategy cannot be isolated while defining the transformations structure.

2. The second point relates to nomenclature used to denote transformations. Terms like “continuous improvement, process improvements, re-engineering, process excellence, process solutioning and change management” all get associated with the transformations umbrella, thereby undermining the subtle characteristics, mind-sets and skill sets which are inherent in these labels. They may fan high expectations internally and with stakeholders, but the resulting efforts could betray these high expectations.

3. The third point relates to the process of defining the agenda for transformations. The agenda is largely centered on a top-down approach and devised by the Head located either in the parent unit or within the shared services center. In some scenarios the agenda is frozen by the management board that is located in the corporate headquarters and handed over to the transformation function for execution in the shared services center. There is little evidence of a bottom-up approach by seeking inputs from customer-facing employees at the junior level and shaping the agenda. Also the culture of an IDEA generation and evaluation framework is loosely anchored within most shared services centers. John Kotter in “Why Transformation Efforts Fail” (Harvard Business Review) defines “forming a powerful guiding coalition” as one of the key steps in making transformation efforts successful. As a result most transformation projects are perceived as a silo driven approach by the employees and thereby lack the pull factor to anchor change in the shared services centers. Another critical aspect that has low importance is to conduct a study and evaluate the merits of outsourcing certain processes rather than incur investments by keeping it within the shared service centers.

4. The fourth point relates to the nature of the transformations. A majority of the transformation efforts are deeply rooted in upgrading the ERP platforms and integrating new functional modules. A proper evaluation needs to be conducted on the processes followed by standardization and then automation. Otherwise the desire to automate may lead to automation of existing waste in the respective processes and a poor return on investments. There are feeble attempts to “walk the talk” on wing-to-wing process improvements (instead of streamlining accounts payable there is merit in mapping the entire vendor invoice management work stream). The Gartner FAO Report (2011) has a note of caution on a trend that is fast catching up in most shared services centers today by investing in certain “bolt on tools like scanning systems, workflows, and portal views of databases to streamline and supplement existing ERP systems”. As per Gartner: shared services centers should not assume that these tools are “robust and have more than 18 months longevity.” The value propositions of transformations may further be increased by establishing and nurturing industry-specific relationships which is a missing link within existing transformations teams. The concepts of innovation and research labs are absent and hence limit the spread and connect of innovations. Also shared services centers need to factor the emergence of cloud based solutions and robotic automations (refer to “IT Robots may mean the end of Offshore Outsourcing”@www.cio.com) in their transformations journey.    

5. The fifth point relates to metrics for the transformation teams. Most of the metrics are governed by efficiency gains (decrease in headcount), improvement in turn time, and eliminating defects. There is negligible evidence of including benchmarking data to validate whether the transformation was good or bad. The pointers related to effectiveness of transformations (examples like penetration of automation, usage of new modules or systems by end users, NPV-net present value of transformational projects, outages on systems or new modules etc.) are yet to be rooted in the centers. Some modules or systems have in-built data quality modules and dashboards that provide meaningful intelligence however lack integration with overall success measures.    

6. The sixth point relates to talent within the transformations teams. Most shared services centers leverage a blend of internal talent including domain experts in accounts payables, order to cash and accounting to reporting, six sigma resources, project management professionals and subject matter experts to drive the transformations agenda. This could endanger the transformations teams to leverage external perspectives and fresh pair of eyes who may not be financial domain experts however possess rich experience in executing transformations in other industry segments. The role of “change agents” and “coaches”, who are critical components in the chain of deploying change, are often accorded low priority. Dan Morris (processexcellencenetwork) states that “key business transformation skills and knowledge that are critical in driving business change – the experience of actually transforming operations – are rare” in the context of business transformations, and tend to mirror the existing set-up within the transformations umbrella.  

7. Lastly, we need to shift gears on vision and leadership. A majority of improvement initiatives fail due to lack of focused and consistent leadership. There are internal turf wars between different functions to claim victory while implementing transformational initiatives. Hence there is need for a shared vision and collaboration to reap the benefits of process transformations. John Kotter in “Why Transformation Efforts Fail” (Harvard Business Review) reveals that the vision has to extend beyond mere numbers. Plus, the vision has to be influenced by the external environment; else it may dwarf into a tunnel vision and become redundant. Also, transformational leadership tends to ignore these golden learnings: 

*
p<>{color:#000;}. acknowledge the emotion and underplay the analysis

*
p<>{color:#000;}. build common practices related to the change, and

*
p<>{color:#000;}. prioritize education and awareness related to the change.

 

Summary

To usher a better climate for transformations and enable robust processes, transformational units need to pay heed to the above-mentioned points. This would serve to get rid of the blinders that currently limit shared services centers from transforming into mature business partners.  

 

Chapter Five: Ignore at Your Peril: Social Media’s Impact on Shared Service Centers

The concept of “viral” is quickly establishing itself as a new benchmark in the internet economy. “Gangman style” went viral on You Tube and became a rage, cutting across national boundaries. The jobsite Glassdoor provides online space for “anonymous” salaries, company reviews, interview questions, and more, all posted by employees and job seekers – and, sometimes, the companies themselves. A search on Payscale yields salary data that matches your company and your company’s positions, and includes 5 million current pay records. At the same time, Pinterest, riding on exponential growth over the past year, connects people all over the world based on “shared tastes and interests”.

The sprawling reach of social media is challenging brick and mortar business models, and organizations will need to start re-evaluating business rules as these are impacted and enabled by the online interface. Wikipedia quotes the total time spent on social media in the United States across personal computers and mobile devices as having increased by 37% from 2011-2012 (121 billion minutes in July 2012, compared to 88 billion minutes in July 2011). Moreover, functions like marketing, customer service (voice and non-voice), customer relationship development, human resources, and sales and finance (to a lesser degree) can no longer remain isolated from the explosion of real-time tweets. The same holds true for shared services centers (captive, outsourced and hybrid models) that cater to countless customer interactions interspersing the above-mentioned functions in the global market.

This context becomes relevant in evaluating whether shared services centers have a viable plan to handle the demands of social media. Could human resource functions be more transparent with existing and potential employees on salaries and perks? Are frontline managers equipped with skills to deal with nasty online posts on products and customer experience? Is there a business case for kicking off training programs on social media? How about re-skilling the present crop of business leaders, as well as grooming a new set of social media leaders?

To begin with, training programs in social media are the need of the hour considering the lightning-fast spread of online networks. The knowledge of online collaborative tools like weblogs, wikis, podcasts, blogs, Technocrati, TypePad, Twellow *]and [*Google Analytics may represent the procedural side of training. The behavioural side could comprise of sound written skills, creative design, presentation skills, emotional quotient, diversity, collaborative mind-set, sharp business strategic acumen, and cultural sensitivity. Furthermore, the curriculum within shared services centers may be well served by articulating guidelines for target audience and processes. Jean Meister, in Forbes, mentions that “social media training is quickly becoming mandatory for an ever-growing range of companies” including the likes of Dell, Intel, Unisys, PepsiCo, Adidas and Sprint. She further adds that companies like Unisys, Sprint and HP are creating social media training programs “to show employees how using social media can be a valuable business tool which can increase their performance and productivity”.

The focus now shifts to the human resource functions and how they could engage talent by partnering with social media. There are only a few shared services human resource teams who have started to leverage social media, and these efforts are largely confined to recruiting talent. However, to shift gears, social media must occupy a larger space within human resource policies pertaining to ethics, loyalty, media and communications. For example, Sprint has taken steps to establish specific social media guidelines, even if a thorough policy of employee conduct already exists. Next, online interactions and posts may be analysed to grasp the pulse of employees and provide input to future plans. The Social Media Report  (2012) published by Nielsen, states that 51% of people in age group of 25-34 use social networking in the office, more than any other age group. Human resource partners need to be made aware that details on salary and perks are easily accessible to existing and potential employees. Also, an internal debate on whether it’s better to adopt existing social media networks or build stand-alone online communities of users may offer some clarity on how to embrace social media. To borrow another reference from  Forbes, Gloria Burke, Director of Knowledge & Collaboration at Unisys, supports “social media training to create a team of advocates who are equipped to represent their employer online.” An example of how this can go wrong is a flashback to one of my earlier organizations, where the HR manager was on his feet to negate the fallout of a Facebook post by an employee highlighting the high-handedness of his manager.    

Hands-on-experience of social media, by managers and leaders, is likely to be beneficial when negotiating existing or potential outsourcing contracts. [Mike Wooden, Senior Vice President, Market Development, Business Process Solutions, ACS, states in *]Outsourcing Center[ that “outsourcing buyers are asking their suppliers for social media solutions to help them out, specifically in customer care”. *]Furthermore, the adoption of social media will enable an alternative listening channel to the voice of customer, minimize potential loopholes in risks and controls, and calm edgy supplier relationships. Paul Cole, SVP, Customer Operations Management, Capgemini, mentions that it is “critical for companies to monitor and engage with social media, identifying individual influencers and then engaging with them to deliver the most appropriate customer treatment and experience”.

The complexity builds as the spotlight turns on leadership . Most business leaders have online profiles, on LinkedIn and Facebook. These are largely utilized for personal issues, like birthdays, travel posts, hobbies etc. and rarely harnessed for business communication. The traditional role of business leaders has been to release carefully worded annual reports and to manage the expectations of shareholders, customers and employees. However, the growth of social media demands a new way of leading and raises the bar on being labelled effective leader. Ann Charles, CEO, Brandfog reveals that  “81% of respondents said that CEOs who engage in social media are better equipped to lead than their peers, and 82% were more likely to trust a company whose CEO is engaged in social media” (Brandfog CEO survey results). In this scenario, nimbleness, responsiveness, partnering with online communities, ethics, written communication and managing networks, will be differentiating traits. Leaders could quickly step in to avoid any dent on company values by leveraging social media. For example Richard Branson, CEO, Virgin Group uses social media to "relate to as many people as possible" and has “AskRichard” as an available outlet to answer questions on the company for the global community.

The leadership challenge is further amplified for shared services centers and organizations located in multiple geographies, where the smooth interplay of effective communication and collaboration between senior leaders and managers is imperative to driving towards business goals. In this context, social media could be harnessed to reduce potential communication gaps and bond the global teams closer through a horizontal network of communication flows. Roland Deiser and Sylvain Newton state, in the Feb 2013 edition of McKinsey Quarterly, that organizational social-media literacy is fast becoming a source of competitive advantage. They elaborate further by providing the example of General Electric’s digital platform, GE Colab, designed by GE employees for GE employees to facilitate global teamwork and collaboration. Roland and Sylvain add that GE Colab combines the capabilities of Facebook, Twitter, and other social applications, allowing easy networking, information sharing, instant communication, advanced search, blogging, video blogs, and more.

There is also initial evidence available on how social media can influence the price of a company’s shares. A study conducted in 2012 by social media consultancy, Sociagility, mentions that “higher social media performance scores were associated with positive changes in share price.”  Moreover, social media tools have the potential to change the patterns of work executed within the organizations and empower the workforce. Don Tapscott, professor at the University of Toronto, in an interview with McKinsey, highlights that social tools will enable “collaborative decision management” and constitute the “new operating systems for the 21st-century enterprise”. Hence, shared services centers will be well-positioned by hosting a page on Facebook or LinkedIn to support new business conditions. Otherwise, they run the risk of remaining rooted in obsolete linear management models, while operating in a wired and transparent world.  

 

Chapter Six: Modern Day Jobs – Shared Service Centers and Boredom!

A common and informal refrain on modern day jobs, including those in Shared Services Centers, can be summed up in a single word: boredom. And yet, the present generation has more to gain from the choice of jobs available and global mobility compared to traditional jobs in a pre-global outsourcing world.

 Today’s workplaces are much-evolved vis-à-vis the traditional brick and mortar structures, yet there are increasingly complaints about how boring jobs are. Many organizations have made discreet attempts to eliminate boredom by increasing choices in dress code; introducing an element of FUN at work; Family Day; celebration of festivals; increased tolerance levels on personal computing devices and mobiles; replacing wooden furniture with bean bags; and providing laptops and flexible work arrangements. In addition, organizations are constantly on their toes trying to balance Gen Y and Gen X needs, and keep employees motivated and energetic.

And yet, these well-directed efforts can’t tide over an increasing boredom, which, within captive and outsourced Shared Services Centers, may be contributing to the migration of talent to jobs that are more challenging and fulfilling. In the past two decades there has been a heavy lifting and shifting of jobs from the developed world to global outsourcing destinations.  Many of these jobs were routine tasks. Furthermore, as the focus on standardization increased, jobs became increasingly “straight line”.

For example, to process an invoice, you need to execute a set of documented steps as per the global process blueprint. The count of invoices processed accurately determines your efficiency and accuracy. At the end of the month your cumulative data secures your pay check. Over a period of time this routine activity leads to boredom, hence there are increasingly few aspirants for transactional jobs in captive and outsourced shared service centers.

Another element that impacts engagement in the workplace is the automation of tasks.  Advances in technology are today replacing a large majority of outsourced tasks. In manufacturing and healthcare, robots have invaded the workplace and now perform routine tasks to precision, thereby standardizing the processes but also allowing less space for innovation. Angelo Kinicki, a management professor at Arizona State University’s W. P. Carey School of Business, in an article titled “Bored in the Office: Is It the New Productivity Killer?” claims: “It’s repetitiveness that’s the culprit.” Some corporate systems can routinize every task and interaction to the point of utter tedium, he warns.

A similar scenario is being replicated in Shared Services Centers, or business process outsourcing engagements, with increasing automation leading to jobs becoming more repetitive (an HfS study earlier this year states that 47% of BPO clients rate automation as an increasingly significant indicator in terms of emerging technology).  

In this context, the paradigm of outsourcing has also contributed to boredom. The starting point for outsourcing was to offshore routine tasks. But while outsourcing added more jobs and contributed to the economy of low cost nations it failed to induce innovation or add newer challenges to job content. As the nature of jobs became “flat”, employees started to exhibit signs of fatigue at the workplace. Over the years the outsourcing industry, hailed as a “sunrise sector” for talent, is now finding it difficult to rope in new talent. This scenario resonates in India where contact and shared services centers are increasingly viewed as less favourable job options by the younger generation. Sarosh Kuruvilla (Professor of Industrial Relations, Asian Studies and Public Affairs at Cornell University) and Aruna Ranganathan (Doctoral Candidate, Sloan School of Management) in a study titled “Globalization and Outsourcing: Confronting new Human Resource Challenges in India’s Business Process Outsourcing industry” (Industrial Relations Journal 2010) state that one of the reasons for high turnover in BPO is the nature of the work itself. They reference international research (Batt et al. 2006; Deery and Kinnie, 2004) around call center jobs being organized after a “tayloristic” fashion: highly repetitive, with tightly regulated lunch and restroom breaks, targeted numbers of calls to be made, and a very high degree of monitoring of employee activity. 

Post the 2009 recession, the new workplace and job market have only served to lengthen the shadow of boredom. On the one hand, layoffs have often forced displaced employees to pick up routine jobs (typically lesser paying). On the other hand, as jobs are outsourced, new employees are measured by performance indicators designed to reward routine task execution. The majority of SSC jobs, in spite of fancy titles and designations, are repetitive and lead to a less engaged workforce. For those in the higher rungs of management the frustration is masked, as jobs tend to pay more, thereby compensating for the lack of space for decision-making. Jenna Goudreau, in the above mentioned article, refers to Richard Chaifetz, a neuropsychologist and the CEO of ComPsych, who says that boredom may be commonly understood as not having enough to do, but is really about not being challenged enough. “So while employees may be busier than ever, they’re not necessarily doing more interesting work”, explains Chaifetz. 

The global economic slowdown post 2009 has further accelerated boredom. There have been fewer jobs created in the past five years and as a result employees have been left clinging to retained jobs. As the corporate world is struggling to survive, scope to alter existing job profiles has been drastically reduced. Employees are also becoming smarter and more careful: lengthy job descriptions posted on Intranet portals and are being carefully scrutinized. Furthermore, in Bangalore (India) we are witnessing the emergence of multiple start-ups in different sectors. An interesting blog post by Nathaniel Koloc in the Harvard Business Review, “What Job Candidates Really Want: Meaningful Work”, points out that employees crave purpose at work—an opportunity to provide meaning and fulfilment.

From low productivity levels to diminishing motivation and engagement to increasing levels of frustration … boredom at work is likely to impact the operations of shared services centers in the coming years. Rose Hoare in an article titled, “Is workplace boredom the new stress?” quotes Sandi Mann (senior psychology lecturer at the University of Central Lancashire, England) who says boredom is the second most commonly hidden workplace emotion, after anger, and who believes modern workplaces are becoming more boring. Despite this, Mann says there’s little awareness. While shared services centers do measure annual employee engagement (via surveys) they do not include any specific indicator related to content or nature of job. As a result, the overall engagement aggregate score fails to provide specific pointers on boredom and job dissatisfaction.

Angelo Kinicki says that workplace boredom can strike anyone from low-level service workers to well-paid corporate executives. The impact on shared services could slow down activity with turnover increasing as employees aspire for growth beyond their traditional boundaries. Furthermore, a Deloitte Global Shared Services Centers study conducted in 2013 mentions that shared services centers attribute a significant increase in people related challenges, including maintaining strong morale, in the next three years.

With focus on increasing profitability by enabling cost transformations, in ever-shorter time spans, the evolution of modern day jobs will be an ongoing journey. As the workforce cedes ground to machines and automation, to yield lower costs, modern day jobs will be less dictated by conventional skills and allowed less space for creativity and experimentation. On the contrary, the repetitiveness of shared services center tasks will have already delivered a certain level of efficiency and contributed to overall profitability. Hence the option will be to choose between: a) Do I need a job to survive? Or b) could I tide over boredom in my current job? 

There is no middle path in this context to allow space for creativity or experimentation and risk the financial applecart. It’s something all shared services leaders should be factoring into their recruiting and retention strategies.

 

Chapter Seven: Data and its Complexity in ERP Deployments

A large-scale implementation of any Enterprise Resource Planning (ERP) systems like SAP or Oracle is prone to risks due to the inherent complexity. Of late, there has been a surge amongst Finance and Accounting (F&A) shared services to deploy ERPs and realize process efficiencies. So what should you know about this?

 The process of deployment is complex and its success depends on numerous factors. In this article, the focus is on embedding the right set of data during the transition to ERP in the F&A shared services environment. A lot of existing data within the shared services currently resides on legacy systems or in-house applications. The migration of data is a cumbersome process and is fraught with many risks which later impact the return of investment (ROI) on the ERP.

As a first step, the shared services needs to map the landscape of existing applications, clearly detailing their features, servers and the type of data residing in them. For example: If the invoices are being currently uploaded into an in-house tool these need to be clearly documented. There is tremendous merit in creating process maps/flowcharts, which explain the process of upload. These documents will be handy to the ERP experts later on, by enabling easy transfer of data and act as a reference guide.

Another vital factor is the prevalence of desktop applications or macros in the shared services, which interface with large tracts of data sets stored in spreadsheets. A lot of processes in F&A depend on these macros to process financial transactions real-time. In this context, many finance processes lack the right level of documentation pertaining to the creation and deployment of these macros. This increases the risk, as there could be a potential loss of data while migrating to the ERP. Furthermore, it does not provide clarity to ERP experts as to which macros could be decommissioned or are suitable to interface with the ERP. As a result, a lot of time is invested to secure these details and conduct multiple pilots – thereby extending the timeline for deployment. Plus, the lack of detailing is a potential high risk going forward as the intrusion of any unwanted macro could impair the data sets or warehouse in the ERP.

 

The right level of data to be migrated in the ERP is of paramount importance. The F&A shared service centers should prioritize cleaning up the pending backlogs in terms of unpaid invoices or posting of receivables in their existing systems. A clean transfer of data to the ERP is a qualitative input in the books of accounts post migration to the ERP. To enable this, shared services centers should educate their employees and vendors to clear ageing items within the specified timelines.

A recent example pertains to a project executed in my previous organization to clear the posting of accounts receivables in a legacy system at a global level, and thereby secure right data in the forthcoming deployment of SAP. The shared services was able to leverage the services of process excellence or transformation teams to conduct periodic checks to secure the accuracy of the data. The same discipline could be extended to the onshore finance teams to avoid complexity in the future state.

To prevent any leakages, the F&A shared service centers should create a data governance framework with the right level of process and security controls. These controls should govern the data sets largely categorized as process, employee and vendor, and thereby store the appropriate data in the ERP. The process of data validation in the legacy system, as per defined business rules, is mandatory. For example, if the payment terms stand at 60 days then the same target should be embedded in the ERP.

The creation of a team of specialized resources having functional knowledge on legacy and ERP systems further lessens data complexity. In the context of staggered ERP transition, where both legacy and ERP systems co-exist, this knowledge base will wipe any disruptions in terms of data feeds.

 

Summary

The implementation of a new ERP system is a time- and cost-intensive process, so, understanding of the value of feeding the right level of data will avoid potential delays to deployment, and save money. For the ERP system to be easily accepted by the end users and vendors, data complexity must be evaluated and addressed during the migration.

Clean data will further provide additional benefits by harmonizing the finance processes and deliver customer delight.

 

Chapter Eight: Data Oriented Leadership – Are Shared Service Centers Gearing Up?

A change ahead

[_Big Data and analytics are rapidly gaining in currency across many organizations, including shared services centres.  This transformation will require some realignment in existing structures. _]

While the data models will enable predictive intelligence it will demand a newer skill set including leadership to fully exploit the benefits of data analytics for organizational progress. An IBM Analytics study dated October 29 2013 and titled: IBM Analytics Study Reveals Big Data Equals Big Payoff reveals that one-third of respondents cited the lack of skills to analyse and interpret data into relevant business actions as the top business challenge impeding better value analytics within their organizations. Interestingly, a majority of the shared services centres mirror this fact and are yet to formulate a plan to overcome this challenge.

To begin with, the larger adjustments or the balancing act will be evident at the cultural level for leaders. Big data will challenge leaders to make decisions based on facts and in real-time. Any procrastination or stone walling is likely to be detrimental and may impact customers. At the same time there will be less space for instinctive or impulsive/intuitive decisions. The situation will demand that leaders understand the methodology behind the data and then act on the predictive intelligence. Tom Clancy, Vice President of EMC Education Services in an article titled EMC Tackles Big Data, Cloud Skills Gap among IT Business Leaders (April 23, 2013) says, “There aren’t just skill gaps among technologists, they also exist at the business leader and manager level.”

The existing and largely generalist leadership roles in shared services centres are likely to wither away. Fred Balboni, Global Leader and Partner, Business Analytics and Optimization, IBM Global Business Services in the IBM Analytics Study states that, “in order to unlock the value of data, organizations need to identify different C-suite champions to get fully behind the use of analytics. Emerging roles like the Chief Data Officer and the Chief Analytics Officer are helping companies build an enterprise-wide data strategy to gain competitive advantage.” 

In the new environment, specialists will have the upper hand as leaders must be comfortable wearing multiple hats – functional, technical, data analytical, business, domain expert – to arrive at a decision. Furthermore, leaders must be well versed in the pros and cons of data decision models and toolkits to interpret the intelligence of big data. With increasing co-option of big data mathematicians, statisticians, and data scientists are likely to corner a larger space in the leadership layer.

The walls of bureaucracy in shared services centres are likely to crumble as data becomes accessible to the larger organization. This will lead to a shift in power equations due to diminishing space for political manoeuvres. The unwritten rule associated with current leadership in shared service centres is that of an individual heading a larger team with weightier designations. In the new equation, a data worker or analyst could equally be powerful with his/her knowledge and expertise of data intelligence.  At another level this will erode the importance given to designations in current shared service set-ups. 

The current approach to engaging with vendors and stakeholders by leaders in shared services centres may undergo a change. As flow of data will be seamless there will be a real time engagement between leaders, vendors and customers rather than the monthly/quarterly visits. Business metrics are likely to be revised often as data models could predict the shortfalls. For example, in finance and accounting, data analytics has the predictive real-time ability to highlight the customers who are likely to default on timely payments after analysing existing data for the accounts receivables process. Hence the leadership for accounts receivables process may have to revisit their targets on outstanding receivables and optimisation of working capital.

Furthermore, leaders may have to be on their toes as a combination of data tools and business intelligence will enable future insights into fraud, spend and procurement analytics. Similarly, data analytics will enable foresight and visualisation into cost per FTE, net margins, transfer pricing etc., thereby challenging leaders to react quickly to business targets. Plus, data modelling will equip leaders with knowledge on workforce analytics, like role based dashboards and predictive models, and thereby shape future business strategy.

To begin with there is skeletal evidence of data analytics teams or specialists residing in shared services centres. In case of a status quo this will limit the identification and grooming of talent for future roles in data analytics. Gartner has stated that by 2015 big data demand will reach 4.4 million jobs at a global level while an Info world article dated May 5, 2014 stated that demand for big data skills are on the rise, including Python and general cloud skills. Hence the future workforce must have a basic understanding and visibility into the big data landscape to perform their tasks. 

Finally, at the leadership level, shared services centres continue to invest in either Master’s in Business Administration; graduates in humanities, sciences, and commerce; or with specialized certifications like black belts, CIMA, chartered accountants etc. However, the changing skill set will demand investments in profiles like statisticians, machine learning, artificial intelligence, modelling, forecasting, social media etc. Shared services centres could benefit by preferring doctorates or post doctorates in these disciplines at the leadership level. EMC is trying to address the gap by offering two courses: Cloud and ITaaS for Business Transformation and Data Science, and Big Data Analytics for Business Transformation. Each comes in a 90-minute version for executives and a one-day course for business leaders, and offers a deeper dive.

The effective use of big data is possible when leadership has the knowledge to evaluate the dimensions of the data. From my perspective, shared services centres are key and valuable repositories of process data for many large global organisations. To unleash new and incredible growth opportunities, shared services centres could exploit this data by leveraging big data tools. A data driven leadership is shaping up as a powerful intervention in management practices going forward. And the sponsorship to undertake this decisive step rests in cultivating a data oriented leadership in shared service centres.

 

Chapter Nine: Have You Considered A Center of Excellence for Invoicing?

Invoices are a critical factor in any finance and accounting (F&A) set-up on a global level, where the smooth functioning of accounts payable and accounts receivables processes requires there to be minimal concerns with invoicing.

There are multiple delivery models (process based, hybrid, region based etc.) adopted by F&A shared services centres and outsourcing providers to service their respective clients. A lot of effort is invested by senior leadership and stakeholders to devise and implement these models. Yet frequent process outages continue to haunt these models impacting service delivery.

In my professional experience the initial analysis hints at underlying issues with invoicing, either from the payable or the receivable perspective. Which begs the question: How about creating a Centre of Excellence (CoE) on invoicing?

To begin with it makes sense to map the type of invoices associated with the respective industry vertical. For example, there will be a difference in invoices generated for professional service firms compared to logistics and shipping companies. On top of that, analysis should be conducted to identify and eliminate any duplication of invoice types. This is likely to benefit the downstream processes when work is migrated to F&A shared service centres. 

[*“Defect free invoices have a bearing on spend analytics in procurement, which leads to robust data analysis.” *]

The next step should be adoption of invoicing technology. A majority of onshore finance teams in different countries still abide by paper invoices. This is more pronounced in Africa, Asia, the United States, Latin America, the Middle East and Asia-Pacific, as there are legal regulations to be complied with. Yet these countries could draw inspiration from the European Union, which has mandated electronic invoicing for countries within its borders. According to a recent study by the E-Invoicing Platform, $1.2 trillion dollars is owed to businesses by other businesses at any given time, in the United States. Many payment delays can be linked to the fact that a majority of companies today still process their invoices on paper.

Technology solutions reduce processing time and free up cash flow, thereby helping the economy overall. There are a whole range of substantial underlying benefits – like cost savings, a greener environment, elimination of errors, better utilisation of time and stronger cash flows as a result of embracing technology. For example, while it takes 17 days to process the average invoice, e-invoicing reduces the entire process to an average of three days.

An element of visual management needs to be incorporated in the invoicing Centre of Excellence. Creating dashboards on invoice generated, paid, and outstanding will provide the transparency that is otherwise missing. In this context, the concept of vendor portals needs to be replicated and extended to the customer side. Doing so would reduce the tedious efforts currently invested to locate and clear outstanding invoices.

How to Set Up an Invoice Centre of Excellence

From a process perspective, you should centralise the COE to avoid multiple hand-offs. The COE should include expertise in terms of talent from country finance teams along with resources from the shared services/outsourcing service providers. A strong control mechanism should be deployed to minimise any risks. For example, there should be zero deviations in refusing to accept requests to amend invoices (under invoice or over invoice). To drive this process through the enterprise will require strong endorsement and sponsorship from executive leadership. The invoicing team should also collaborate closely with the accounts payable and accounts receivable processes. Plus, the set up should aim to standardise the invoice lifecycle and thereby minimise opportunities for client complaints.

Benefits

A streamlined invoice process has a beneficial impact on how ERP systems and platforms function, as well, especially where there is an ongoing deployment of ERP across the organisation. If the invoices are clean, the ERP will be more effective post deployment. For example, accurate invoices will lead to higher match rates on the receivables and enable timely payment to vendors on the payables. So the organisation stands to reap a better return on investment (ROI) on the implementation of the ERP system.

Furthermore, defect free invoices have a bearing on spend analytics in procurement, thereby resulting in robust data analysis.

By establishing a dedicated Centre of Excellence for invoices, the focus on metrics associated with invoice lifecycle will be accentuated. While most F&A shared services centres measure accuracy and timeliness, measures like cost per invoice, turnaround time for invoice lifecycle, ageing of invoices, percentage of invoices not paid right first time, etc., will benefit the larger organisation. The adoption of these metrics will likely generate additional cost savings.

A big advantage is the higher rate of customer satisfaction that will accrue on both the customer and vendor side. A better quality of invoices is likely to contribute to healthy and safe books of accounts. The finance and accounting landscape will be spared multiple follow-ups and rework, thereby allocating existing bandwidth to more strategic deliverables.

Summary

As big data and technology re-define the contours of finance and accounting, a Centre of Expertise for invoices will further streamline the source of financial transactions.

 

Chapter Ten: Emerging BRIC Nations: Shared Service Center May be Solution for Education

The BRIC (Brazil, Russia, Indiaand[ ][*_China_]) nations are widely touted, across various reports, as the emerging economic powerhouses for the world economy in the next decade. The BRIC countries comprise more than 2.8 billion people or 40 percent of the world’s population, cover more than a quarter of the world’s land area over three continents, and account for more than 25 percent of global GDP. Moreover a _][_Goldman Sachs report[_ states that the BRIC economies are likely to reach over half the size of the G6 (US, UK, Japan, Germany, France and Canada) by 2025[*. *]China and India are expected to become the first and third largest economies by 2050, with Brazil and Russia capturing the fifth and sixth spot (Goldman Sachs report).These are enormous numbers, the impact of which simply cannot be ignored._]

Within the BRIC nations the steady economic growth of India and China has been aided by the expansion of the middle class and rising consumption levels. However to sustain the economic growth trajectory both India and China need to increase spending on key social indicators like education and healthcare.  

The education sector is significant, as it shapes talent and influences human capital, which further contributes to the quality of economic output. A few past and current trends within the Indian educational sector are detailed below:

*
p<>{color:#000;}. growth of private schools (largely English speaking) in urban centers catering to the middle-class

*
p<>{color:#000;}. expansion of private schools with international syllabi (IGSCE) including facilities like air-conditioned classrooms, doctor-on-duty, nutrition experts etc. 

*
p<>{color:#000;}. evidence of schemes like Education For All Movement (Sarva Shiksha Abhiyaan) to open new schools in areas without them and to expand existing school infrastructures and maintenance

*
p<>{color:#000;}. growth of private institutes offering job-oriented vocational courses in metropolitan centers and emerging urban centers

*
p<>{color:#000;}. emergence of private universities as per University Grants Commission

*
p<>{color:#000;}. establishment of universities by conglomerates like Wipro and HCL 

*
p<>{color:#000;}. emergence of chain of pre-schools by corporates (Alpha Kids by Camlin Group)

*
p<>{color:#000;}. potential plan by reputed universities like Harvard and Yale to have Indian footprints (Foreign Education Bill) 

*
p<>{color:#000;}. emergence of multi campus model like Birla Institute of Technology and Science and Amity

*
p<>{color:#000;}. increasing collaboration by educational units with foreign universities  

*
p<>{color:#000;}. evidence of investments in education by private equity like Tutor Vista and FIITJEE

I believe that the education sector across all developing or emerging economies would do well to leverage shared services, as they expand their scope and are under pressure to deliver the kind of multi-skilled workforce demanded by multinationals setting up operations in these countries.

To support a viable shared services business proposition in education you need to consider the following:

*
p<>{color:#000;}. the set-up of the educational centers is characterized by core functions (represented by teaching and administration) and non-core functions (represented by transport, legal, banks, library, student services and finance). Both the core and non-core activities are housed internally and tend to increase operating costs.

*
p<>{color:#000;}. a majority of the finance departments transact admission fees, asset costs and petty expenses manually. All educational units execute financial transactions like payroll, deposit of fees, maintenance funds, vendor payments and taxation by cheques with banks. They fall short of a single interface to enable visibility and transparency of data, thereby incurring potential financial risks. Some key financial tasks like budgetary planning, working capital, cash flow management and financial planning are subject to individual interpretations.

*
p<>{color:#000;}. student records are documented in multiple spreadsheets in computers or stored in paper files. As a result retention and retrieval of data is largely manual and cumbersome due to absence of a consolidated database.

*
p<>{color:#000;}. there is a constant inflow and outflow of faculty and the entire talent chain operates manually. The counsellor’s time is largely invested in short listing, follow up on interview schedules and manual storage of candidates profiles.

*
p<>{color:#000;}. there are only a handful of educational units that have invested in trained manpower to manage their technical side. Furthermore, many educational centers are engaged in upgrades of computer labs and information technology systems.

*
p<>{color:#000;}. administrative tasks are largely people dependent and are subject to variations across the different campuses. The management of facilities and transport is lacking in standard procedures.

 

Comparing statistics on the educational sector across all BRIC nations:

table<>. <>. |<>.
p<>{color:#000;}.   |<>.
p<>{color:#000;}.  BRAZIL | <>. |<>.
p<>{color:#000;}.  

|<>. p<>{color:#000;}. A Compounded Annual Growth Rate (CAGR) of 5.5% during 2010-2013 is forecasted for higher education (free-press-release-com)

The aim is to raise enrolments from the current 900,000 to 1, 5-million by 2030 which  will lead to an increase in the higher education from 16% to 23% by 2030 (bdlive.co.za)

The Brazilian Social Services for Industry (SESI) are  investing R$1.5 billion (US$750 million) to create 23 new Innovation Institutes designed to support business innovation and research (us-brazil.org)

As for public expenditure in education as a percentage of GDP, Brazil also recorded a considerable increase from 3.9% in 1995 to 4.5% in 2005 (OECD Directorate for Education-2008)

Education is a $15 billion industry in Brazil with approximately $500 million spent annually on marketing (investor.quinstreet.com) | <>. |<>.
p<>{color:#000;}.  

|<>. p<>{color:#000;}. RUSSIA

The percentage with higher education increased from 3.94% in 1995 to 10.12% in 2006

According to UNESCO data, enrolment in any kind of pre-school program increased from 67% in 1999 to 84% in 2005

The Russian government is to allocate up to 137 billion roubles (US$4.1 billion) to the development of education from 2011-15 under a new federal target programme (universityworldnews)

Education and science are priority investment areas for Russia, believes First Deputy Prime Minister Igor Shuvalov while delivering a speech at the APEC (Asia Pacific Economic Cooperation) CEO Summit (english.ruvr.ru)

INDIA | <>. |<>.
p<>{color:#000;}.  

|<>. p<>{color:#000;}. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) projections reveal that with government planning to spend around 5% of India’s GDP in next 5 years on education, the market for primary, secondary, higher secondary including colleges and universities in totality could exceed $ 50 billion by 2015 (www.indiainfoline.com)

The pre-school segment is valued at $300 million currently and is expected to be a $1 billion market by 2012 (at a CAGR of 36%) (Education in India-Securing the demographic dividend by Grant Thornton)

The size of the kindergarten to higher secondary (K12) industry is expected to increase from $24.5 billion in 2008 to $50 billion in 2015 (with an estimated CAGR of 14%) (Education in India-Securing the demographic dividend by Grant Thornton)

The size of the higher education industry is expected to increase from $8.7 billion in 2008 to $32 billion in 2012 as the private sector takes a greater stake (Education in India-Securing the demographic dividend by Grant Thornton)

The education spending in 2010 accounts for 5% of private consumption and is expected to rise to 9% by 2025 (Education in India-Securing the demographic dividend by Grant Thornton)

The vocational segment has emerged as a $2.65 billion market that is expected to grow rapidly into one worth $3.6 billion by 2012 (CAGR of 25%) (Education in India-Securing the demographic dividend by Grant Thornton) | <>. |<>.
p<>{color:#000;}.  

|<>. p<>{color:#000;}.  CHINA

The total number of people enrolled in higher education to increase to 36 million in 2020 as compared to 30 million in 2009 (kpmg.com/cn)

The total number of students enrolled in primary and junior secondary education to increase to 165 million in 2020 as compared to 158 million in 2009 (kpmg.com/cn)

The kindergarten enrolment to increase to 40 million in 2020 as compared to 27 million in 2009 (kpmg.com/cn)

The budgetary outlay in 2010 was at RMB 216 billion as compared to RMB 198 billion in 2009 (kpmg.com/cn) |

Given this backdrop, is there a role for shared services centers to explore this market? How can the shared service centers improve the user experience in education? What are the potential benefits of shared service centers? Will shared services enable processes to transform the education sector? 

To begin with, within the education sector, shared services centers could be leveraged in the following areas:

*
p<>{color:#000;}. Finance and Accounting 

*
p<>{color:#000;}. Payroll

*
p<>{color:#000;}. Human Resources 

*
p<>{color:#000;}. Benefits

*
p<>{color:#000;}. Facilities Management

*
p<>{color:#000;}. Student Services

*
p<>{color:#000;}. Information Technology (IT)

*
p<>{color:#000;}. Administration

The buy-in has to be earned after meaningful discussions with numerous stakeholders from both the private and public sector. The shared services model needs to be backed up with adequate analysis on forecasted hard and soft benefits as detailed below:

*
p<>{color:#000;}. Secure efficiency gains 

*
p<>{color:#000;}. Optimize early payment discounts

*
p<>{color:#000;}. Improve upon existing levels of customer satisfaction  

*
p<>{color:#000;}. Reduce operating costs 

*
p<>{color:#000;}. Standardize business processes and reduce variations

*
p<>{color:#000;}. Enhance the quality of services

*
p<>{color:#000;}. Enhance visibility into cash flow management and working capital

*
p<>{color:#000;}. Enabling new career opportunities

*
p<>{color:#000;}. Preserve bandwidth to improve quality of teaching and research

*
p<>{color:#000;}. Strengthen vendor relationships leading to higher satisfaction

*
p<>{color:#000;}. Minimize potential financial and regulatory risks 

*
p<>{color:#000;}. Enable transparency through standard IT platforms   

A cross functional body of professionals with experience in education, shared services, information technology, legal, finance, taxation, government and regulations should oversee the roadmap for implementation. The process may greatly benefit by observing best practices from similar proof of concepts in other countries. For example:

The University of California is going live with a shared services center to include payroll, workforce administration and leave management, this year. 

The University of Berkeley is considering a shared services model for human resources, information services and finance activities with the aim of providing a more efficient and effective working environment for faculty, students and staff. The HR shared service center was operational as of July 2010 and caters to approximately 3000 clients across three major divisions (the Office of the Chancellor, Administration, and Information Services and Technology).

A survey of 230 colleges in UK has revealed that over half of them (60.7%) are considering a move to shared service centers.

As per Rowan Miranda, associate vice president for finance, at the University of Michigan “up to 12 schools in the United States have implemented, or are implementing, the shared services model on a university-wide level. Yale and other frontrunners in this transition may face resistance because people are unfamiliar with the system. But administrators at colleges and universities will eventually be unable to ignore the long-term cost-cutting advantages of the system.”

The Yale shared service center for finance was started to reduce strain on faculty and staff by streamlining administrative tasks. “But the onset of the recession in 2008 forced administrators to re-examine their priorities, and shared services became part of efforts to reduce a $350 million budget deficit the University faced from its declining endowment” as stated by Shauna King, Vice President for Finance and Business Operations.

The footprints of existing shared service centers in India and China in other industry verticals could be a starting point for the education sector to develop its own platform. To sustain a competitive advantage it is imperative for BRIC nations to leverage a polished and well-endowed global talent pool. This can be supported by providing qualitative academic inputs and developing a conducive environment for skill development and research. The faculties should, therefore, be distanced from repetitive and mundane tasks and focus on nurturing talent and sharpening skills. The entry of shared service centers offers a potential pathway for faculty to invest its precious bandwidth in improving the standards in education.

The moment has arrived for BRIC nations to plant the seeds of Shared Service Centers and nurture their potential to expand their economic footprint on the global stage. 

 

 

 

 

 

 

 

 

About Amarpreet Bhamra

Amarpreet Bhamra is a business process management professional with 17 years of multi-cultural work experience in Professional Services, Logistics and Supply Chain, Telecom, Financial Services, e-learning and Media verticals.

His academic credentials include an Executive Program in Leadership and Management from Indian Institute of Management-Calcutta, a double post graduate in Communications from University of Hyderabad and English from Panjab University, Advanced Diploma in Financial Management from Indian School of Business Management and Administration and graduate degree in English from D.A.V. College-Chandigarh.

He has held leadership positions (mid-level) in both captive and third party service providers for Fortune 500 organizations. Amarpreet presently lives and works in Bengaluru with his family.

 

 

 

 

 

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Myriad Musings (An exploration of Shared Services)

The incubation of shared services evolved in the early-1990s with a multitude of organizations that climbed on this bandwagon to reap the benefits of reduced costs and improve the service levels. Shared services set ups emerged first in the US followed by similar centers in Europe and later the model was extended to Asia and other parts of the globe. In today’s environment many organizations are leveraging shared services to deliver value add to their customers apart from the routine processing tasks. The articles listed in this e-Book include topics like domestic shared services, process transformations, jobs, education, data and ERP, social media etc. The writings have been enriched by incorporating appropriate reference material where ever necessary. Hence the readers will gain from these insights and thereby enhance their knowledge on the above mentioned topics.

  • Author: amar16
  • Published: 2016-12-28 11:05:12
  • Words: 11260
Myriad Musings (An exploration of Shared Services) Myriad Musings (An exploration of Shared Services)