Earlier this year, TDS Global Solutions had an engaging discussion with Rohitashwa Aggarwal, Director for Everest Group’s Global Sourcing Practice, in particular about the adoption of Robotic Process Automation in Asia, and more specifically in the Philippines.
To note, Aggarwal’s expertise is analyzing RPA impacts in global technology and business trends especially to the Shared Services industry. Aggarwal in particular talked about the need for Shared Service organizational model restructuring, as well as emerging talent needs. So what do they all mean for Shared Services, Global In-house Councils, outsourcing and call centers in the age of automation?
In fact, Aggarwal said, Asian nations have evolved to become mature locations in the GIC market, which now has at least 1.5 million in U.S. nearshore and offshore locations. Of these, 45% are in India, and 11% or over 150,000 in the Philippines.
So why does the Philippines remain an attractive location for investors? Of course, there is English language proficiency, strong cultural affinity with Americans, and better IT skills and banking operations talent. Moreover, the Philippines has strong cultural and geographical affinity even with Australian and Japanese markets. And this is not just in customer service or back office work, but also in tech skills.
Indeed, RPA is impacting GICs, with their global heads of automation process contemplating, planning or implementing it in various stages of adoption or maturity.
Among the issues are figuring out a realistic business case for RPA, and its ROI for investors. So how can it provide both simple and complex solutions, and when is the right time to implement it? And how can companies leverage certain vendors to become Shared Service centers of excellence?
By reskilling the GIC workforce, upscaling their skills particularly in critical thinking and problem solving, and working with bots. Therefore, it bridges whatever gap, and creates more beneficial impact and attain better customer experience.
Urban areas like Cebu, Davao, Bacolod, even Dasmariñas, and Clark could benefit as next-wave GIC zones of the future. GICs could benefit with access to executive search solutions and regular supply of fresh talent with attrition lesser than 20%. Moreover, there should be better market competitiveness, availability of real estate infrastructure, and presence of business continuity planning requirement.
To help improve performance, plus identify gaps and opportunities, Shared Services can quickly partner with third-party consultants and advisors. In fact, Shared Services leaders have looked for external support and expertise in evaluating existing delivery models, driving change management, and assessing performance and effectiveness.
As a matter of fact, compared to Asian shared services leaders at 18% and North American counterparts at 16%, their European counterparts are more likely than their other global peers to look for external support in transitioning to a digital workplace.
So which areas are Shared Services leaders in Asia would mostly likely hire an external consultant?
From primarily reducing cost and time for their business clients, Shared Services benefits have leveled up from simply doing customer service, as they are now measured to perform process control and improvement, standardization and optimization, as well as reduced risk and better compliance, quality and reliability. Shared Service adoption of automation therefore enables businesses with more agile services and abilities to ramp up or scale down, depending on enterprise needs.
After all, only 28% of Asian shared services now highlight customer service as a key benefit, far below 32% of their European shared services peers, not to mention 38% and 44% respectively of their Latin American/Caribbean and North American counterparts.
This coming November, a global network of Shared Services organizations will once again meet in Southeast Asia to address the most pressing regional issues facing the industry. Notably, they see value creation and digital transformation as among the factors that drive agile business services in the region.
According to the Shared Services network, the labor arbitrage model has been gradually losing traction with data-driven automation. In fact, Asia’s competitive edge as a cost-effective offshore destination is decreasing. How can GICs or Captives, Global Business Services and other Shared Service Models maintain their competitive edge?
The November gathering will henceforth focus on these market shifts and community discussions to help solidify Asia’s competitive advantage in the global Shared Services map. Amid the influx of technology and automation, enterprises want greater value in enhancing in-house productivity and achieving data-driven efficiencies.
For now, Artificial Intelligence together with integrating AI solutions tops the bucket list of Shared Services organizations. However, they are least prepared for now in taking advantage of emerging opportunities in blockchain technology.
Just like in other regions, only one-third of Asian Shared Services organizations have already implemented some form of Intelligent Automation system. And many of the new IA solutions in fact depend on lots of data — all feeding on the so-called beast of automation.
Right now, the scope of Asia-based Shared Services covers the realms of Finance & Accounting, Human Resources, and Information Technology, as well as Procurement. Data Analytics, for now, is far below the totem pole among Shared Services priorities in the region.
And while Asian Shared Services organizations still notably lag behind Europe and the Americas in HR as well as Data Analytics, they remain ahead in F&A as well as Sales and Marketing Support.
To note, process and technology only represent two of Shared Services’ three prongs, the other being people. Ever since 2017, however, transactional and human-based work has given way to automation-enabled, data-driven, knowledge-based activity.
The question now is identifying how companies will redeploy humans to specific kinds of work. So how will companies prepare humans for this work, and manage the transition to data-driven automation?
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