Companies have always looked to make shared services more cost-efficient. After all, why invest in a cost-centre that is of limited strategic value to the business?
Significant leaps have been made over the years, with many simple processes being centralised or outsourced, but the time and money required to run these operations still dwarf returns for the organisation.
The key to lowering the cost of shared services is to make administrative processes leaner and more efficient, making this the perfect proving ground for automation.
Enter Robotic Process Automation (RPA). RPA is gaining a great deal of attention in shared services because it allows businesses to systemise simple, repeatable tasks. That doesn’t mean shared services workers will be replaced by mechanical robots like those used in manufacturing. Instead, virtual bots (software robots) programmed to mimic human keystrokes at a computer will take on clerical jobs, and complete them more quickly and accurately at a lower cost.
Of course, automation is not new to the finance department. Many companies already use integrated Optical Character Recognition to input supplier invoices into their ERP systems instead of doing this by hand. However, CEOs are paring back on non value-adding operations in this time of economic uncertainty and expect the CFO to help them uncover new efficiencies.
“Virtual bots (software robots) programmed to mimic human keystrokes at a computer will take on clerical jobs, and complete them more quickly and accurately at a lower cost.”
For many businesses, the ability to sweat their legacy systems while driving efficiencies is very attractive and RPA is ideally suited to that end. Additionally, the more transactions businesses automate the bigger their savings – so there is value in applying RPA to as many processes as possible.
For years, companies have been chasing a nirvana state of “lights-off processes” for routine tasks, and the advent of AI, chatbots and other forms of automation has finally put this vision within reach.
That said, a true lights-off approach is still some time away. While some specialised outsourcers are seeing success with RPA most businesses are still managing a disjointed collection of processes and data, with each department handling simple tasks in completely different ways. Unless they standardise these processes with greater vigour their investment in RPA will only result in a large mess made more quickly.
The most compelling business cases will come as RPA begins to develop machine learning capabilities. We will then see the shared services function become elevated into a self-improving mechanism that constantly scrutinises processes and makes recommendations on how they can be improved in real-time.
“RPA will show its true potential when it influences human decision-making for the good of the organisation.”
In other words, RPA will show its true potential when it influences human decision-making for the good of the organisation. Oracle ERP Dynamic Discounting is an early example of this concept in practice – the application monitors supplier invoices and flags those that offer discounts for early payment, allowing finance teams to better prioritise their disbursement.
Automation and AI will help companies cut their shared services costs, but they will also allow HR and finance teams to focus on more value-adding activities like business partnering. The boardroom has long been calling for more strategic thinking from the back office – the more processes are automated, the more time and energy HR and finance employees can dedicate to shaping the business’ future.
The timing also coincides with a period during which companies are migrating their back office systems to the cloud. A rethink of their shared services is a natural extension of this larger IT transformation project.
Time will tell how big a role RPA will play in shared services, but as the technology becomes more sophisticated and affordable businesses are right to be rethinking their current approach.
It’s also worth considering how RPA will affect the skillset of shared services employees. Some companies may decide to bring high level tasks back in house while others may invest in up-skilling their off-shore centres to work with new technologies – in either case, the back office is certainly heading towards a new look.