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Shared services organizations are a feature of the global corporate landscape.
Leading companies are now looking for new ways to deliver more value by moving beyond the back-office, function-based service provision of earlier generations. We call these evolving organizations integrated business services (or IBS) organizations, and conducted research to understand better how this evolution is occurring.
In our research report Trends in Shared Services: Unlocking the Full Potential we found that pioneering shared services organizations were pushing past the boundaries of traditional shared services models.
IBS delivers higher-value services on an enterprise-wide basis in a consistent, high-quality and cost-competitive manner, leveraging both captive and outsourced solutions. IBS organizations are becoming strategic partners to the enterprise by supplying services that can help to solve end-to-end business problems and deliver increased enterprise value.
Although cost reduction will almost always be an expected part of the business case for any type of shared services model, the incremental value from IBS will be measured based on its help in achieving strategic business objectives—for example, helping the business enter and exit new markets quickly, expediting mergers and acquisitions, or providing a buffer against business volatility.
To explore this emerging trend, we focused our research approach on approximately two dozen shared services organizations that we identified as being well down the road to IBS. We interviewed the respondents to gain first-hand insight into how their organizations are moving toward IBS. In addition, we asked the respondents to complete a self-assessment survey based on Accenture’s defining characteristics of the IBS model, indicating where they feel they are today and where they envision their organizations in the future.
For 80 percent of respondents, the reason for moving to IBS is greater integration and ownership that, in turn, can reduce local service variations, complexity and costs overall.
Almost 90 percent of respondents see the potential in offering innovative services that integrate the back-, middle- and front-office activities—and have already made plans to extend the existing scope of their service organizations.
As they identify and incubate new and innovative services, 55 percent of the respondents in our survey are also taking the opportunity to align their service management structure to optimize their ability to enable business goals for the enterprise.
Through our regular interactions with our clients, we determined that there are a number of key evolutionary components that are not only critical in laying the initial foundation of the IBS organization, but also in setting the trajectory for the journey ahead. Our research confirmed our beliefs.
These four evolutionary components are:
Redefine the business services model to better align with the changing business environment. IBS leaders are beginning to recognize the value of tailoring their business services model to more closely align with the businesses they serve. Their decision making has become less about cost management and more about designing a service model that recognizes, accommodates, and makes the most of corporate and geographic culture, industry nuance, market forces and more.
Innovate and expand scope of services to partner with the enterprise to achieve business outcomes. Almost 90 percent of those surveyed see the potential value in offering innovative services that integrate back-, middle- and front-office activities and have already made the decision to expand their scope far beyond what is being offered in their existing service organizations.
Deliver insights and take actions based on the power of data and analytics. With the responsibility for end-to-end processes comes the realization that the IBS organization is sitting on top of a data gold mine. After applying statistical modeling and advanced analytical techniques, it can be used to derive cross-functional, actionable insights.
Identify the right lead for the evolving organization. In conjunction with the evolution of the IBS organization having the mandate to integrate and transform end-to-end services, the need for deep functional expertise in a lead has been replaced with the need for someone who can effectively operate a global business and deliver business outcomes.
All of our research participants were passionate about the emergence of IBS and we at Accenture feel confident that the concept of IBS is here to stay. Companies are embracing the value IBS brings beyond traditional cost management, by aligning more closely with the business to not only support, but in many cases, drive greater business value.
We recognize that getting there is not easy. Some key points to bear in mind:
Having seen how rapidly IBS’ success builds upon itself, nearly all of those interviewed commented on the need to think big from the start and to have a bold, far-reaching vision.
March 5, 2013
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