| Moving shared services to the internet can save millions through efficiencies |
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| As the inefficiencies of shared services centres become apparent, millions could be saved and the customer could be happier if e- shared services were to become the norm, according to Dermot Reidy. |
Ireland has long been recognised as the European location of choice for shared services. Shared services centres bring together non core support activities and functions that previously were duplicated across several operating units or geographies of a business into a dedicated service unit to deliver these services more effectively, at a lower cost. This allows the operating units to focus on meeting and exceeding customer needs. However, as with any other organisation, to survive and thrive in the new eEconomy shared services centres must eEnable their business processes and applications to improve business efficiency.
Inefficiencies
Existing shared services centres have in-built inefficiencies. They operate processes that are usually paper and labour intensive. Transaction processing activities typically represent 85 per cent of the total activity. As a result the service to the customer has been less than optimal. Furthermore, with the increasing competition in the labour market for skilled finance and administrative staff, it is important to free valuable resources from performing routine transactional processing and allow them to concentrate on more value-add and customer focused activities.
eEnabling procedures
The emergence of enabling eCommerce technologies and rapid growth of eBusiness presents significant opportunities and challenges to shared service centres. The new technologies can reduce the cost of co-ordinating and exchanging information, resulting in increased operational efficiency at a lower cost. These improved economics give service centres more productive, more profitable ways of doing business. For example, Microsoft has achieved significant savings through eEnabling their procure to pay process which reduced the invoice payment cycle time from 3 weeks to 3 days and reworked invoices fell to less than 1 per cent of total volume.
Andersen Consulting has developed a unique diagnostic tool to determine the benefits associated with eEnabling shared services centres. When applied, this diagnostic tool will help identify specific inefficiencies within current business processes.
Call Centres
There are several situations where eCommerce applications can improve the current operations of an existing call centres and shared service centres.
Firstly, call centres are the key to improving customer satisfaction, while at the same time reducing operating costs, and allowing customers help themselves and quickly source answers to questions (i.e. a move towards customer self service). The internet is a key enabler for making this happen. Up-to-date information on current issues and answers to frequently asked questions should be available at an accessible web site. The more questions that get answered at the web site, there is less of a workload on traditional (telephone based) call centre agents. The cost savings are dramatic where typical interaction costs of ?1.50 - ?4.50 per call can be reduced to ?0.30 for a web-based interaction. Cost reduction is not the only benefit. The reduced workload also frees up scarce and valuable customer resource personnel who can now manage customers in a more proactive and timely fashion.
Order to cash process
The order to cash process can be targeted immediately for improvements in areas such as online receipt of orders, online invoicing, electronic credit authorisations, electronic payments, cash application and in the production of 'Dunning' letters. This improves customer service, increases information accuracy, releases resources to focus on value added activities, and reduces cost. eCommerce applications working with existing ERP systems allow the above benefits to be achieved in a seamless and transparent way. For example Cisco Systems, Inc. have used eCommerce to automate their full product ordering process. The online design tools and ordering systems allow for complete online transactions via the Cisco web-site including pricing, configuration, order placement, order status and invoicing. This has led to 98 per cent of orders being correctly configured first time and has eliminated the requirement to raise purchase orders and invoices.
Likewise, the benefits of applying eCommerce to the general ledger and reporting processes is to streamline and produce accurate reports in an efficient and cost effective manner. eEnabling technologies facilitates this by allowing customers on-line access to reports and web-based query handling. This convenient self service model reduces finance report generation and distribution costs and frees up financial analysts' time to provide more proactive business management.
Expense reporting
The expense reporting and payment process is an essential activity for all companies and if not properly implemented can be slow, expensive and lead to employee dissatisfaction. By allowing expense reports to be submitted online with a link to an existing ERP system, the time to payment can be drastically reduced with impressive savings as a result. This is even more valuable to companies with extremely mobile work forces. The facility to submit time and expense reports on-line through a secure web site from any PC reduces cycle time, improves reporting accuracy and frees up the employee time to allow them to focus on doing their job.
Human resources
Human resource processes benefit significantly from implementation of eEnabled solutions. e-Human Resources applies web-based technologies to supply self-service capabilities to help reduce the time human resources professionals spend on processing paperwork and responding to queries. The capacity of the human resources team is increased to focus on other activities, such as policy development and workforce management. For example, Motorola developed a self service web application to allow employees a one-point of access to HR information with an ability to maintain personal data. The number of paper transactions and forms were reduced, increased customer satisfaction and overall net benefits of between ?2 - ?2.5 million per annum were realised.
Companies across all industries have started to embrace the new eEconomy. The enabling technologies and processes are now available to allow both service centres and call centres move to the next generation of eBusiness centres. The time to act is now. |
Dermot Reidy is an associate partner with Andersen Consulting
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| Article appeared in the April 2000 issue.
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