Bob Cecil, Executive Director, Business and Financial Processes Advisory

My last blog – Shared Services: Nexus for Cost Realignment or Exporter of Value?– focused on a Blue Sky Innovation Room session at last month’s Shared Services Week conference on how shared services is perceived, versus how it would like to be perceived by the company and business units it serves. That discussion dove-tailed perfectly into our next session, during which we talked about non-traditional services that could be provided in a shared services environment.

Some of these non-traditional services are purely administrative and don’t necessarily fall within traditional G&A functional boundaries, such as meeting planning and document preparation. Many others fall within the Knowledge Process Outsourcing (KPO) space, defined as judgment-intensive processes, including:

• Pharmaceutical processes: clinical data management, pharmacovigilance, regulatory affairs authoring and publishing and new drug introductions
• Consumer packaged goods processes: pricing optimization, market research, new product launch optimization, trade promotion analytics, shelving analysis, sales force effectiveness and marketing campaigns management, marketing and sales and proposal documentation and demos, e-marketing
• Financial services processes: equity research, pitch books for M&A, valuation and funding options
• Other general KPO-type services: legal process outsourcing, engineering standards management, business intelligence, competitive intelligence, patent and new product research

While some of the participants were aware of these types of services, many didn’t realize that a market for them really existed. As a result, their shared services organizations have not considered offering these services to their company, or managing them if outsourced to a third-party.

The end of this session focused on alternative sourcing models for non-traditional services. While many participants felt outsourcing service providers were better prepared to offer them than internal shared services, we got into an interesting discussion on “crowd sourcing”. Under this more “open source” model, a business requirement is defined by shared services and then sent to the open market – whether that market is limited to just company employees or actually the public market – to provide the service. An example is development of new advertising campaigns.

We believe the lack of focus on expanding shared services deliverables into non-traditional areas is attributed to two primary factors: 1) shared services leadership focusing too narrowly on just the services – or direct tangents – their group currently offers; and 2) in most cases, the outsourcing community has a more true commercial orientation than the internal shared services community, and as a result has tended to be more aggressive in bringing these services to market. While there is truth associated with both of these factors, I think they send up red flags on why, to some extent, today’s shared services organizations aren’t viewed as exporters of value.

For more, read my latest interview, 2010 — HIGH GROWTH FORECAST in Industry-Oriented Analytical Services.

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