Shared Service Centre 2.0 | 3 Step Framework to Build Next-Gen Global Innovation Centers


  • Order-to-Cash Shared Service Centres have evolved into GICs offering a technologically advanced workforce generating insights for the leadership team and core business
  • 45% of the global Shared Service Centre leaders foresee an increased focus on digital experience and AI-driven automation
  • Advanced digital technologies like Artificial Intelligence, Machine Learning, and blockchain will drive the future of Order-to-Cash Shared Service Centres

Contents

Chapter 01

Shared Service Centres Evolution From ‘Back Office’ to ‘Center

Chapter 02

Emergence of Global Innovation Centers that Generate Business Value

Chapter 03

Adoption of Automation and Digital Technologies Driving the Future of Order-to-Cash Shared Service Centres
Chapter 01

Shared Service Centres Evolution From ‘Back Office’ to ‘Center


Evolution of SSCs to Global Service Centers

For long, businesses have used Shared Service Centers (SSCs) to achieve cost and operational efficiencies for managing back-end F&A or O2C processes related to customer payment processing, billing, credits, and collections, which were outsourced to process-specialized SSCs. The traditional F&A SSCs worked in a siloed environment with separate business objectives and processes, which restricted the exchange of information. For example, credit management might be separated from collection-related processes involving collections, deductions, and disputes. This resulted in complex and often opaque systems that did not facilitate communication between various processes and even sub-processes within the same process.

Evolution of SSCs to Global Service Centers

As SSCs gained popularity, their role started moving toward a co-located service center, wherein the entire O2C support across credit management, billing, payments, collections, and reconciliation was managed from a central location. However, O2C SSCs mainly handled targeted tasks and were not adding any value to the core business, such as assisting the sales team for potential customer leads with their credit risk evaluation. Also, there was less focus on process innovation, automation of workflows, and generating real-time insights, and the main activities only included standardization of the ongoing processes, leading to the commoditization of business processes. This in turn impacted the business growth, as the focus remained on cost optimization of the process from the process rather than designing better products or increasing sales, or exploring new markets.

Unlike the SSC model, where Shared Services Center is a separate entity that has emerged from core organization and that is responsible for providing services to its local business units, the GBS model consists of setting up a global, integrated and centralized organization that provides comprehensive and complex end-to-end processes (whereas in case of SSC, local business units continue to participate in process execution, as only some of clearly defined activities are transferred and consolidated in SSC).

Chapter 02

Emergence of Global Innovation Centers that Generate Business Value


Emergence of Global Innovation Centers that Generate Business Value

O2C SSCs
According to Deloitte (2019 survey1), SSCs are becoming more involved in strategic business functions, such as customer, sales, and marketing support, thereby generating substantial business value. Decision-makers need support for tasks such as reducing process cost, managing cash flow, and improving customer relationships, which generate business value by generating leads for the sales team, improving visibility on payment disputes, and providing foresight on credit and

payment risk of customers. This becomes possible through a centralized service delivery. A GBS that could enable intercommunication between the processes could generate real-time insights for business leaders. This resulted in the adoption of Global Innovation Centers (GICs), providing an environment where processes no longer work in silos, and a workforce, which is technologically advanced to proactively answer business queries. This enables the innovation teams to support their organization’s overall strategy, including new idea generation and execution, improvement of customer experience, responses to immediate business requirements, real-time insights, and revenue generation. For example, the collections and credit teams can work in collaboration to provide information on credit risk, credit history, and history of blocked orders to the sales team for approaching potential customers and speeding up the onboarding of new customers.

GICs provide an environment where processes no longer work in silos, and a workforce, which is technologically advanced to proactively answer business queries. This enables the innovation teams to support their organization’s overall strategy, including new idea generation and execution, improvement of customer experience, responses to immediate business requirements, real-time insights, and
O2C SSCs

revenue generation. For example, the collections and credit teams can work in collaboration to provide information on credit risk, credit history and history of blocked orders to the sales team for approaching potential customers and speeding up the onboarding of new customers.

Linda from Uber highlights that SSCs have evolved in terms of the type of support they have been providing. They are working in collaboration with business partners (FTEs of the parent company) to provide recommendations for business decisions and to determine the best practices for the business as they are involved in the day-to-day tasks. This has become possible mainly through the adoption of various digital technologies.

Chapter 03

Adoption of Automation and Digital Technologies Driving the Future of Order-to-Cash Shared Service Centres


Moustapha from Bristol-Myers Squibb highlights that SSCs have evolved over time to enable innovation with the help of adopting technology in the cash application process. However, there is always a scope for improvement, e.g., enhancements in the efficiency of the treasury department, credit department, or the overall financial health of the company. Technology has the potential to offer customized solutions for specific processes or sub-processes, e.g., it can be used to run a real-time cash application process and bring the process at par with any other process in an organization.

GICs are digitally transforming their services through the automation of repetitive tasks, cloud deployment, and analytics-based insights, to provide enhanced operational speed, strategic real-time insights, more streamlined and integrated processes, and improved customer experience. GICs act as a catalyst in the overall digital transformation of a business, assisting them to establish new operations and enhance the
Adoption of Automation and Digital Technologies Driving the Future of O2C SSCs

existing ones. But the transformation also increases the interaction among the processes, both in volume and complexity. This is where automation techniques are needed to reduce the cost of labor and to make intelligent decisions. Tammy from Martin Marietta highlights that it is important to have an automation approach so that resources can be utilized effectively.

SSC leaders
According to Deloitte (2019 survey2), 45% of global SSC leaders foresee an increase in SSC focus on digital experience and AI-driven automation. In a shared accounting services framework, the service delivery should be cost-effective, customer-focused, and efficient, and should add value to the

process. Innovative solutions adopted by shared services leverage technology to provide scalable and repeatable solutions, for example:

  • Automation of the accounting processes facilitates resource efficiencies that can be channeled toward business development initiatives. As more transactions are automated, SSCs deal with limited service areas such as account payables and receivables. Also, automating paper-based work such as invoices and purchase orders, reduces the sheer volume of paper used, which when accompanied with reduced manual entry and reconciliation process, reduces the overall cost. In an account payable process, e-invoicing and automated matching of purchase order, delivery confirmation and vendor invoice eliminate the requirement of manual intervention. Key types of technologies being used for O2C processes are:
  • Robotic Process Automation: To improve productivity, bots are deployed to take care of routine and repetitive tasks such as invoice entry, payment reminders, inventory database and balancing cash flow sheets, thereby avoiding delays in processing time and possible errors
  • Artificial Intelligence (AI) and Machine Learning (ML): AI and ML techniques facilitate automated analysis and scanning of invoices, emails, and contracts, thereby reducing the manual effort. But the key application and value addition comes from the insights that it can generate with its analysis, that supports in decision making or taking automated intelligent decisions. For example, self-learning algorithms predict payment dates and identify risk of non-payment, and integrating this information across processes leads to relevant business insights
  • Cloud-based deployment provides scalability and an environment for better operational integration across processes and ensures business continuity
  • Business intelligence services for analyzing data and providing actionable insights affect strategic decisions
Digitization of operations brings enhanced visibility across processes and contributes to their improvement by enabling the continuous benchmarking needed for achieving best-in-class practices. For example, benchmarking accounting process performance, such as auto-reconciliation rate and on-time completion percent, adds visibility
Adoption of Automation and Digital Technologies Driving the Future of O2C SSCs

across accounting operations, making it easier for decision-makers to have end-to-end control of any changes in the existing processes. Future-ready businesses are adopting practices that combine human and machine intelligence, leveraging modular data and technology architecture with scalable processes, decision support teams, and agile front-end teams.

Advanced digital technologies
Advanced technologies such as AI, ML or blockchain could help in building the O2C SSC of the future. For example, leveraging a private blockchain to standardize data on a single, shared ledger, which can provide real-time visibility of the transaction process can have a huge impact on the O2C

process. It provides complete visibility to all stakeholders in the O2C process. It increases the trust with the business leaders and helps in business decisions by providing real-time data such as credit information, buyer credit score, buyer payment behavior, payment history and validity of deductions claimed.

According to Tammy from Martin Marietta, digital transformation brings in process effectiveness and efficiency, and the ability to represent data so that it can be analyzed.

It is evident from the application of these emerging digital technologies that to adopt best-in-class practices and radically enhance the value generated from O2C processes, it is important to follow a digital approach.

Digital Transformation Across SSCs

The above eBook was just a glimpse out of an extensive Thought Leadership Whitepaper titled:

Future of Shared Service Centers for Order-to-Cash

Key Highlights of the Whitepaper

  • SSCs for O2C have evolved to become a part of the core business operations and play a critical role in the overall digital transformation of businesses.
  • 70% of digital transformations fail due to lack of discipline, visibility and tracking of business outcomes and KPIs.
  • The best-in-class approach includes adopting digitization as a part of the DNA with continuous improvement and benchmarking.
  • RPA was good while it lasted but the next generation technology is AI-native.
  • Cloud-based integrated O2C platforms are digitally transforming SSCs.

Download the complete Whitepaper

Valuable Insights from:

Uber

Linda Lei

GPO of Customer Payments, Deductions, and Credit at Uber
Uber

Homer Smith

GPO of Billing, Credit, and Collections at Uber

Moustapha Ould Ibn Mogdad

Market Focal Point Manager, GBFS Canada, OTC at Bristol-Myers Squibb

Bryan DeGraw

Associate Principal, Finance Advisory Services, The Hackett Group

Tammy Lindorf

Director of Shared Services, at Martin Marietta

Tony Saldhana

Former P&G Executive, GBS Expert and Author of ‘Why Digital Transformations Fail’
Chapter 01

Shared Service Centres Evolution From ‘Back Office’ to ‘Center


Evolution of SSCs to Global Service Centers

For long, businesses have used Shared Service Centers (SSCs) to achieve cost and operational efficiencies for managing back-end F&A or O2C processes related to customer payment processing, billing, credits, and collections, which were outsourced to process-specialized SSCs. The traditional F&A SSCs worked in a siloed environment with separate business objectives and processes, which restricted the exchange of information. For example, credit management might be separated from collection-related processes involving collections, deductions, and disputes. This resulted in complex and often opaque systems that did not facilitate communication between various processes and even sub-processes within the same process.

Evolution of SSCs to Global Service Centers

As SSCs gained popularity, their role started moving toward a co-located service center, wherein the entire O2C support across credit management, billing, payments, collections, and reconciliation was managed from a central location. However, O2C SSCs mainly handled targeted tasks and were not adding any value to the core business, such as assisting the sales team for potential customer leads with their credit risk evaluation. Also, there was less focus on process innovation, automation of workflows, and generating real-time insights, and the main activities only included standardization of the ongoing processes, leading to the commoditization of business processes. This in turn impacted the business growth, as the focus remained on cost optimization of the process from the process rather than designing better products or increasing sales, or exploring new markets.

Unlike the SSC model, where Shared Services Center is a separate entity that has emerged from core organization and that is responsible for providing services to its local business units, the GBS model consists of setting up a global, integrated and centralized organization that provides comprehensive and complex end-to-end processes (whereas in case of SSC, local business units continue to participate in process execution, as only some of clearly defined activities are transferred and consolidated in SSC).

Recommendations


Blog

Finance 4.0: How Can Mid-Market CFOs Embrace…

Abstract

What is Finance 4.0? Finance 4.0 is all about using digital technologies such…

4 min

Webinar

Navigating the Grey Areas of Order to…

Abstract

The order-to-cash(O2C) space is highly regulated with directives on e-invoicing and late-payment and…

30 min

eBook

Overcoming the Seven Critical Challenges for Global…

Abstract

7 Critical GBS Challenges Changing the Way-Forward in 2021 by Going Digital The…

7 min

There’s no time like the present

Get a Demo of Integrated Receivables Platform for Your Business

Request a Demo

Request Demo Character Man

HighRadius Integrated Receivables Software Platform is the world’s only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway – covering the entire gamut of credit-to-cash.