VANTAGE POINT: Exploring Shared Services for Customer Management

Large consumer organizations over the last few years have been increasingly relying on shared services for powering business functions with a view of improving process efficiency and reducing costs.

 

The common business areas that are currently being deployed on a shared services platform in consumer products companies range from supply chain management to finance and accounting, HR management and information technology (IT) management.

 

Although shared services for these business functions can play an important role in process optimization and cost efficiency, as shared services units specialize in performing repetitive transaction based tasks, consumer companies can also leverage the service model to perform tasks that require high-end business and consulting skill sets that may not be widely available in the organization. These units can serve as specialized centers with enterprise wide availability and their core competence would be in performing knowledge oriented tasks with an end benefit of improved quality and faster turnarounds.

 

Customer management that involves critical operational activities performed by key employees in the organization has generally been performed in-house. This was because organizations felt that these activities required internal company know-how on business strategies and market development efforts. This was information which was normally privy to internal stakeholders. Also, these tasks required specialized knowledge and were not major cost overheads. However, organizations present in multiple countries have started streamlining similar processes in terms of standardizations and uniformity, and it has become increasingly challenging for all geographies to comply with such parameters.

 

Apart from standardization, common processes necessitated the quality of outputs to be similar across geographies. Due to these challenges, it has now become relevant for certain customer management functions to be performed on a shared services platform. The rationale of harnessing shared services for these functions may not be cost reduction alone and would include the following:

 

1. Delivering standard outputs by organizing and maintaining a single taskforce of people with highly specialized skill sets not widely available in the organization further enhanced by quality training on internal company standards and policies who will assist employees of similar roles and responsibilities in the company regardless of geographies in key functional areas.

2. Creating and incorporating best practices and using standardized approaches to implement business solutions enterprise wide.

3. Using standard performance metrics and common service level agreements to ensure services are delivered as per requirements, costs, and time frame enterprise wide.

 

 

 

Some of the customer management functions that can be successfully performed in a shared service environment are discussed below:

 

1. Business Intelligence & Reporting - Reporting is one among the key tasks performed by various roles in a consumer organization. Reports can vary from standardized status reports that analyze the day-to-day performance of a business line to on demand reports that help a business manager to predict likely business situations in the future and take pre-emptive action. Reports can also use analytics to analyze sales and syndicate data to assist managers in business decision making. While most managers use a combination of spreadsheet applications and standardized company applications with reporting functionalities to generate reports, there is a challenge in spending sufficient time and effort in generating advanced reports that can provide useful guidance and business intelligence. A shared services center with workers trained in business intelligence reporting can access master data and transaction data stored in centralized data warehouses to generate reports using packages like Business Objects, Informatica, etc. Individual managers can send requests for ad hoc reports by specifying the business need or can schedule automated reports. This enables the managers to benefit from the advanced knowledge of the shared service center and the enterprise wide availability of this resource can give managers across geographies an equal ground in decision making. Moreover, the time saved by managers in extracting data and structuring it to gain business insights can be deployed on more productive tasks.

 

2. Campaign Management - Consumer organizations execute marketing campaigns on a regular basis. Campaign execution involves internal collaboration among various organization stakeholders in seeking approvals, procuring budgets and settling accounts. A shared services portal can enable collaboration between various stakeholders real time by validating requests for campaigns in terms of data completion and other financial and legal formalities, seeking approvals from approvers, shifting budgets and tracking campaign execution. The portal can provide a single point interface for all campaign-related activities. This substantially reduces the responsibility of various stakeholders in the exercise and also increases the accuracy and reliability of these business processes. Campaigns conducted in time without delays can positively affect the performance of a product in the market.

3. Customer Information Management - Data governance is an important activity in a large organization. Consumer companies frequently report pain points in data governance related to the non existence of standard templates to manage data, inconsistent data descriptions and attribute values, manual approach and inconsistencies in data management across different markets, etc. Effective data management requires business and customer understanding as well as technology, architecture and data model understanding. It is challenging to ensure that all arms of the organization adhere to common guidelines and possess sufficient skill sets for efficient governance. Organizations can choose to govern data effectively by implementing corporate wide strategies and guidelines for managing data capture, integration, maintenance and usage through shared service centers comprising of a skilled data governance team. The data governance team of the shared services center will work closely with the organization business team and such a setup comes with inherent advantages. For instance, all facilities will be provided 24/7 and internal staffing changes in the data governance team will have a very low impact as knowledge is collectively shared and new qualified team members can be quickly inducted through scheduled knowledge transfer sessions.

 

In the past, shared services evolved as a need for cost reduction and were brought about by economies of scale through homogeneous tasks and operations in low cost centers. Shared services are now being implemented for gaining operational excellence in business areas. Support functions like customer relationship management, after sales support, etc. have now seen active shared services support. Consumer companies must now gauge the benefit of shared services not through cost reduction alone but by the immense advantage such a concept brings through its pool of skilled workforce and proactively work to align the organizationsââ¬â¢ strategic goals with the shared service setup. Companies should also begin to focus more on specific high end value adding tasks and establish an effective partnership with shared service centers to assist them on end-to-end business decision making. Such alignments can promise organizations with increased revenue and market leadership.

 

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