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How companies can meet their corporate goals through shared service centers

(Image credit: Image Credit: StartupStockPhotos / Pixabay)

Traditionally, shared service centers have been used to help companies reduce costs, drive efficiency and increase quality. By nature, they’re already highly cost-sensitive, but in the current pandemic, this has become even more vital and organizations’ expectations around them are fast changing. Staying afloat has now become a key priority for businesses, with more than £50bn being borrowed through government-backed Coronavirus loan schemes since March.

With businesses keeping a closer eye on their cash flow and cost reduction than ever before, managers are turning to technology to help them stay on track, and process mining is one such solution they can use to do this. The technology gives companies an overview of all their internal business processes in real time, so they can optimize and monitor them continuously. Shared service centers offer ideal conditions for generting added value with the help of process mining.

Human Resources, IT, Accounting: the euphoria surrounding digital transformation has also rippled into shared service centers. While traditionally, day-to-day operational work was dominated by routine activities, internal service providers are now expected to take on more complex and demanding tasks with the help of automation, artificial intelligence (AI) and machine learning (ML). However, the executive floors continue to expect greater efficiency, quality and cost savings by bundling tasks.

Data tracks uncover process inefficiencies

Process mining is especially helpful for shared service centers to illuminate and subsequently optimize critical business processes. Automation in a shared service center, for example, can only be fully effective if it is preceded by detailed process analysis and optimization. The first step in process mining is to visualize the actual running processes including all process variants on the basis of data. These processes lie dormant, sometimes unnoticed or hidden, in the depths of the organization's own IT systems such as SAP, Oracle or Salesforce. Process mining extracts information from event logs including their timestamp, case ID and activity. This data ultimately forms the basis for meaningful process mining analysis and enables a visual representation of current and comprehensive business processes – all in real time.

But process mining does not only collect data in IT systems. With the help of "task mining" technology, user interaction data can also be integrated into the process analysis in an anonymous form. This extension of process mining is particularly relevant for shared service centers. This is because many activities here take place outside the IT systems - such as scanning documents or researching supplier or customer information. The addition of task mining functionality to process mining gives shared service centers a comprehensive view of processes - regardless of whether they are IT-based or not.

Processes become guarantors of success

These insights enable managers to make the right choices and drive real improvements throughout the business.

But the use of process mining does not stop there. The technology also supports continuous process monitoring and improvement. Because modern process mining technology uses AI and ML to learn from business processes, it automatically detects deviations and provides recommendations for action to avoid inefficiencies. It enables future-oriented forecasts for the optimal control of the shared service center based on valid real-time information, thus generating considerable added value.

Process mining in practice

In shared service centers, process mining can be used to check conformity, for performance analysis or for operational support of company processes. This enables ongoing performance management, early detection of bottlenecks and inefficiencies, and identification of optimization potential.

Since many processes are bundled in shared service centers, the effects of process optimization extend beyond individual areas. This is the case at Deutsche Telekom Service Europe (DTSE), whose shared service centers bring together the Finance, Reporting, Procurement and Human Resources departments to create a highly digitized procure-to-pay process for the entire Group. Everything from negotiations, inquiries, and order management to invoicing and payment is handled here, so that other departments can concentrate on their core business.

DTSE's procure-to-pay process handles over 2 million order lines – with an order volume of over £6 billion – and processes almost 9 million invoices per year. Using process mining, DTSE has been able to link data from more than 10 source systems – such as SAP Ariba and Salesforce – and gain unprecedented visibility into its processes. Equipped with up-to-date knowledge of how their processes are running, DTSE has not only been able to define new KPIs, but has also developed an early warning system that alerts when these KPIs are in danger of getting out of hand. Thanks to the use of process mining, DTSE was able to significantly increase the automation rate of its procure-to-pay processes in its shared service center, which resulted in savings of more than £10 million and greatly reduced the workload of its employees.

Looking to the future - from analysis to operative actions

While process mining is still a relatively new technology, it can now do much more than just deliver simple process analyses. With the help of so-called "operational apps", process mining is becoming the strategic control center for all operational company processes. Managers can change their priorities with a simple click, and then AI and ML ensure that weaknesses in the relevant processes are identified and automated actions for improvement are initiated. Employees at all levels are provided with dashboards that are adapted to their functions: for example, senior managers are given strategic insights into KPIs and current process weaknesses, while technology prioritizes tasks for employees in the shared service center. In this way, everyone can work together with management according to their core competencies towards a corporate goal that can be adapted and is transparent for everyone. At the same time, the organizational effort is reduced, and strategies based on gut feeling are supported by data-based facts.

In theory, shared service centers provide a great avenue for cost-cutting and can be a beneficial first step as companies look to re-gain their footing in a post-COVID-19 world. Process mining thus not only offers the opportunity to improve efficiencies and drive cost savings through optimized processes in shared service centers but also to fundamentally transform the way companies work. Since shared service centers already bundle central business processes, they can also make a significant contribution to achieving corporate goals.

Jan Philipp Thomsen, Vice President Business Models & Enablement, Celonis (opens in new tab)

Jan Philipp Thomsen, Vice President Business Models & Enablement at Celonis.