Accelerating Shared Services Businesses In The Era Of AI

Harnessing potential...AI has the capabilities to address the tough questions and find workable solutions to achieve their business goals.

Today’s enterprises are faced with the “new normal” of continuous instability in the marketplace. Globalisation, explosion of big data,social media and a shift in demographics,  are reshaping shared services enterprises and forcing them to transform their operating models. 
 
While pace-setters are bold and innovative in standardising processes,  there are still enterprises that continue to “ship, then fix” their processes themselves. Not all become successful and many fail to reach optimal levels of performance. 
 

The Shift towards Strategic Business Value

A study by IBM Institute of Business Value (IBV) last year found that many enterprises spend almost half of their time on transactional activities.  On the other hand,enterprises that leveraged IBM technologies and services for transactional activities spent less than 30 percent of their time doing so. These organisations benefit from the process-led outsourcing model that is aligned with their governance model. The proven structure combined with advanced process optimisation capabilities enabled these enterprises to shift away from transactional activities and focus more on providing strategic business value.
 
These enterprises are able to spend more than 70 percent of their time on control and risk, and decision support activities  such as talent development, IT support,quality of delivery and ongoing continuous improvement. This also included the operational work of supporting, managing, and mitigating enterprise risk; measuring and monitoring business performance; and contributing to the enterprise strategy.

Keys to success

Success stories show that the enterprise can begin to realise rapid, substantial operational savings and enterprise business benefits (such as improvements in working capital and spend savings) by moving some or all of its back office functions to an alternative delivery model backed by an experienced provider.This model has proven to be successful but dependent on critical success factors.
 
The critical success factors include: the ability to keep pace  with the performance of transactional activities without outsourcing at least some of those processes; the continuing maturity in BPO and investments; ensuring that the performance of internal shared services match the maturity models capabilities offered by service providers; next steps to extend the leverage of internal shared services captives; and if the competition is using latest technologies to maintain an edge.
 

Assessment and Implementation

Evolving the enterprise  shared services strategy to optimally impact businesses performance warrants a thorough consideration and assessment of hybrid shared services models that include asking the following questions:

• How does your enterprise compare with those that have driven enterprise-wide process and data standardisation?
  
• Is your enterprise spending more than 30 percent of its time supporting transactional activities?
  
• Does your internal shared services enterprise consistently deliver expected results with outcome commitments?
  
• How effectively can you drive performance improvement across the enterprise?
  

The first step is to assess the progress on enterprise-wide process and data standards and understand how to best leverage a flexible and agile delivery models to help accelerate the path to success. An example of how it can be achieved can be seen at IBM’s Client Innovation Center in Malaysia.

Here, all employees are committed to a minimum of 40 hours of learning annually as part of the upskilling programme to be future-ready.Among the topics that are a prerequisite, are cloud computing, data analytics, cyber security and digital design. The knowledge acquired is put to practice in their day-to-day duties.
Employees here also underwent an experiential course learn how to be agile at the workplace. This means being able to review information, course correct and respond quickly to requirements. Agile now is the new way of working and IBM Malaysia is among the foremost practitioners of Agile in the IBM family worldwide.

Using digital tools such as Webex, Mural and Slack also enhanced collaboration and sped up communications among team members here and globally.

Enterprises can begin to realise rapid, substantial operational savings and enterprise business benefits by moving some or all of its back office functions to an alternative delivery model backed by an experienced provider.

AI as a solution

Furthermore,the advent of Robotic Process Automation (RPA) and Artificial Intelligence (AI) has made it possible to enterprise to address the tough questions and find workable solutions to achieve their business goals.
 
IBM IBV AI 2018 Report found that a significant shift is underway in how business leaders look at AI’s potential to drive business value and revenue growth. The key findings are:

• 82% of enterprises, and 93% of high-performing enterprises, are now considering or moving ahead with AI adoption with a focus on revenue generation.
  
• 60% fear liability issues and 63% lack the skills to harness AI’s potential.
  
• CEOs perceive the greatest value in AI adoption to be in IT,information security, innovation, customer service and risk management.
  
• AI adoption is higher and likely to accelerate faster in more digitised industries like financial services.
  

 
Enterprises today have better choices as AI technologies mature. For instance, IBM’s trust and transparency capabilities are built-in onto IBM Cloud  and work with Tensorflow, SparkML, AWS SageMaker and AzureML machine learning frameworks.
 
The ability to take advantage of these new controls is even more compelling for the open source community with the availability of  IBM’s AI Fairness 360 toolkit to check for and mitigate biases in AI models. The toolkit is a library of novel algorithms, codes, and tutorials that will give academics, researchers, and data scientists the tools and knowledge needed to integrate bias detection as they build and deploy machine learning models.
 
It is apparent that the business landscape for the industry would surely improve as more enterprises avail themselves to newer technologies.
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Helmi is the leader of the IBM's Client Innovation Center in Cyberjaya. He has 19 years of experience in Service Delivery, Business Operations & Transformation, Financial Management, Consulting and Program& Project Management. He was also member of the Change Champion Group leading IBM ASEAN Client First Transformation program. Prior to IBM, Helmi worked with Ericsson. He has a Degree in Accountancy and Finance from the DeMontfort University, United Kingdom.