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By Bob Cecil, KPMG, And Partner -Specializing in Business Services Transformation
Bob Cecil, KPMG,
Today’s enterprises are moving to a higher level of value and performance for the delivery of their business services. They are still looking for traditional shared services and outsourcing objectives of reducing costs and maintaining service quality and control, but now they need to get more out of their business services organizations by focusing on outcomes rather than just efficiency.
As a result, forward-thinking enterprises are developing new service models incorporating disruptive technologies to enable fast, flexible and cost-effective service delivery.
Global Business Services Maturity Levels
Many enterprises are using mature Global Business Services(GBS) delivery models to support outcomebased solutions. Most mature GBS organizations deploy a combination of outsourced and internal captive capabilities to deliver end-to-end transactional and expertise based services. Research has shown that increased GBS maturity has a 75 percent correlation to increased ROE by 2 percent to 3 percent and higher EBITDA margins by 1 percent to 2 percent.
A key part of GBS maturity is the development of Business Process as a Service (BPaaS). Properly designed and implemented, BPaaS environments can help enterprises proactively deliver new insights about the business; connect players in one global network for knowledge sharing and collaboration; improve the customer experience; allow for “plug and play” adaptability to changing business conditions; and significantly reduce operating costs.
Key Disruptors Driving BPaaS
Four digital disruptors are driving significant transformation efforts in how organizations are transitioning to BPaaS. The impact of these disruptors is just beginning to be felt and will continue to drive significant change in service delivery over the next five years.
Robotics include advanced automation, digitized knowledge labor and other areas known as Robotic Process Automation (RPA). This technology is disrupting traditional offshore outsource and captive models by displacing cheap labor by even cheaper software that can also improve service quality. CXO INSIGHTS 27 OCTOBER 2015 Enterprises are already deploying and leveraging this technology at call centers and lowlevel business processes. A major telecom provider has replaced more than 1,000 full-time employees (FTEs) with RPA software “robots” over a six-month trial period. Initial projections suggest that each robot can perform activities equivalent to 3 FTEs. Beyond cost savings, the organization has also increased customer engagement and satisfaction.
Cloud technology is disrupting traditional, highly integrated ERP systems, breaking apart the enterprise software stack and augmenting existing systems of record with cloud-based systems of engagement.
"Cloud technology is disrupting traditional, highly integrated ERP systems, breaking apart the enterprise software stack and augmenting existing systems of record with cloud-based systems of engagement"
Cloud deployments can dramatically reduce the time to install, upgrade and customize processes and software, reducing overall operating expenses and enabling cost savings to be reinvested to support growth. Cloud also offers scalability, speed to market and centralization to coordinate and manage applications across various devices. A leading motor club in North America has implemented multiple cloud-based applications for membership subscription and subledger tasks. The motor club has significantly reduced finance and accounting costs by leveraging offshore resources with cloudbased tools to minimize asset and human capital investments.
Data and Analytics is disrupting the traditional shared services model limited to only providing transactional-based services. Companies are now building Centers of Expertise with data and analytics capabilities to offer not only enhanced services but also improved insights, outcomes, and solutions. Facing a torrent of data, a global financial services institution now requires that a quarter of its IT resources should focus on data issues, including running up to 30,000 experiments a year to test the success of new products and programs. This has resulted in an 87% reduction in customer retention costs and an 83% reduction in the cost of acquiring new customers.
Social and Mobile technology has disrupted the traditional ”buysell” customer to provider model and replaced it with an approach focused on customer engagement management — defined as all the processes a company might use to identify, monitor, organize and enhance every interaction between a customer and the organization throughout the customer lifecycle.
A computer storage and data management company has leveraged mobile applications and social media to completely revamp the employee onboarding process and create an improved mobile digital experience. This brings a personalized touch to hiring that is not limited to processing paperwork. This customizable solution has reduced paperwork, removed silos between different functions such as IT and HR, and improved communication and services for new hires.
As a final note, the impact of these disruptors will continue to grow as each one is integrated and used in conjunction with the others, adding value and enhancing business services and service delivery. Buyers of services are progressively waking up to the benefits. Providers who fail to keep pace, clinging to antiquated labor based offshore and legacy technology models, will quickly become irrelevant.
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