By Rob Starr, Big4.com Content Manager.
New joint research from Accenture and HfS Research shows expanding digital technologies are expected to support implementation of advanced shared services models across a broader range of business functions over the next several years. Paul Jeruchimowitz, managing director – Accenture Strategy, CFO & Enterprise Value, answered some questions about the research for Big4.com.
How will the extensive use of digital technologies support the implementation of advanced shared services models across a broader range of business functions?
Many organizations have long used various shared services models to unlock valuable cost savings, improve efficiency and increase productivity across the enterprise. Our research now shows that savvy organizations are realizing that new digital technologies can propel their use of more advanced integrated services to support unconventional areas, better focus on the external customer and supplier relationships, and enhance their competitiveness.
For example, nearly half (49 percent) of respondents expect digital transformation to “extensively impact” advanced shared services models in supply chain over the next three
years, compared to 20% who reported the impact of digital in the last three years. Engineering is also an unconventional area that is seeing growth due to the “extensive impact” digital will have and therefore the opportunity to provide services from an advanced shared services capability (27% vs. 13%). The respondents also expect digital transformation to have an “extensive impact” on the conventional functions that have been providing by Shared Services for many years including finance & accounting, human resources and procurement.
However, it is important to remember that the digital transformation requires much more than the implementation of new technology. It requires changes to strategy, people and processes as well. In fact, one of the most encouraging results from the survey is the evidence that enterprises are starting to make the changes necessary to realize the benefits of going digital – including taking on new leadership, implementing new process models, and deploying new technologies.
What digital technologies specifically are important?
Our survey revealed that companies are using a wide variety of technologies, including analytics and big data tools, mobile tools and applications, collaboration tools and social media and cloud-based or SaaS platforms.
When it comes to the areas of strongest investments, roughly one in four large enterprise respondents indicated they were seeing heavy investments today, with the greatest activity in mobility (31 percent making heavy investments to get ahead of the curve) and analytics (30 percent). At the same time, more than two out of five respondents (41 percent) indicated they wanted to see more investment around mobility – which implies that this is an area that most businesses will continue to focus on in the coming years.
Our survey shows that cloud still lacks visibility to some in the enterprise. While roughly one-third (32 percent) of respondents indicated that they saw some but not enough investment in cloud technologies, 16 percent indicated they saw minimal or no investment. This may highlight the need for more clarity regarding the value of cloud to enterprise efforts surrounding digital transformation. Cloud based solutions are often the way these new technologies are delivered, and by embracing this approach, many enterprises would benefit from the shift of resources away from legacy infrastructure.
When it comes to projected impact on shared services, analytics and big data led the way. Sixty percent of respondents indicate an extensive or moderate impact from the use of analytics to manage these services, and at least half of respondents saw the same for the other three categories, including cloud/SaaS (52 percent), mobility tools and apps (50 percent) and interactive/collaborative and social media (53 percent).
What industries are to be affected the most and why?
Our study did not examine the impact of digital on specific industries, however our work in this area leads us to believe that all industries will be affected. In fact, one hundred percent of respondents in our survey agreed that “Digital Technologies are fundamentally changing the industries in which they operate.” The industries that have long thought about the digital experience for their consumers are ahead, or are well positioned to be ahead, regarding the introduction of similar capabilities from their shared services organization. Examples of these industries include consumer goods & services, travel and transportation, hospitality, retail banking, etc.
What is another big takeaway from the report?
One of the most interesting aspects of the study has to do with the critical role CFOs are playing in making digital decisions. CFOs have long assumed a leadership position with respect to the prioritization, deployment and management of shared services, and the study shows that they are currently playing a strong role in determining which processes are most ready and viable for digital transformation. Specifically, 37 percent of respondents report that CFOs are making the final decision about implementation and another 52 percent are providing major input – second only to the CIO (40 percent and 47 percent, respectively). This confirms the overall trend we’re seeing that CFOs are taking on an increasing role throughout the organization.
What does the future look like?
Our survey confirms that the impact of technology on shared services will be as broad as it is deep. Forward-thinking organizations have realized that technology is not a passing trend or fad – it is the future – and it presents tremendous opportunity to those who are willing to invest in the right mix of tools and applications and develop a strategy that makes good use of those investments. Specifically, advanced shared services organizations are seeing digital transformation impact the model in three ways: (1) Increasing customer experience expectations based on bringing the consumer experience into work; (2) Reduction in total cost to serve due to the advent of cloud-based technologies accelerating the introduction of enablers and reducing the cost of storage; and (3) an opportunity for advanced Shared Services to play a role in enabling a broader enterprise-wide digital transformation.