The Shared Service Center becomes digital and intelligent

Shared Service Centers (SSC) take over repetitive activities for several functions of the company or subsidiary. This enables synergy effects to be realized in finance and accounting, purchasing or the HR function through standardization and organization in end-to-end processes.

After traditionally achievable cost savings in shared service centers were largely exhausted by automation and nearshoring in recent years, digital technologies are now igniting the next stage of SSC efficiency.

In the end, the transformation now underway could severely limit the transactional business model of shared services. It will be replaced by technology-based automation and new data-based services that will minimize human intervention.

A key driver for the further development of SSC continues to be the reduction of costs. However, the focus is now more on improving the customer experience.

Whereas in the past SSCs were able to reduce costs for standardized tasks by around 30 percent through synergies and work completion from nearshore locations, robot-based process automation (RPA) and artificial intelligence (AI) open up further potential to reduce costs, increase quality and establish new adequate solutions for the customer.

Transactional and simple manual activities are thus a thing of the past. Instead, employees spend their working time on new value-adding activities, such as data analysis and the further development of company processes and technologies.

The average degree of standardization and automation of tasks and processes in the SSC is already around 80 percent today. Building on this, many remaining tasks such as invoice recognition, processing and posting in financial accounting can now be automated with RPA.

Software robots process this without error, provided companies set up precise rules for machine processing. Machine learning, a branch of AI that can continuously optimize and refine a set of rules by recognizing patterns in data, is then expected to further reduce the number of manual interventions in unclear cases.

While RPA and chatbots have become almost standard in modern SSCs over the past two years, it will take a few more years before machine learning becomes widespread. Those who rely on AI can expand the task spectrum of their SSC in addition to the known benefits.

If AI and machine learning then also map less standardized processes in the medium term, the automation rate in SSCs could approach the 100 percent mark in the long term.

But the human being remains indispensable. However, their role is shifting. Instead of always the same work processes, SSCs then need experts such as RPA developers, data scientists, as well as expert competencies in the respective specialist areas that an SSC takes over: HR, Finance, Purchasing. Personal consulting for the customer by means of technical and problem-solving expertise will continue to be a sought-after commodity.

Standardized and integrated ERP systems or E2E processes supported by back-end systems as well as harmonized data models will continue to be necessary. In the course of restructuring and mergers, companies often suffer from a fractured ERP and IT landscape.

The migration or new implementation to SAP S/4 Hana is an opportunity to homogenize the ERP landscape while fully integrating existing shared service centers. The digital core as well as the possibilities of RPA and AI can then be fully exploited.