Shared Services 4.0 – at a crossroads

The next evolution of Shared Services is already on our doorstep – or maybe already reached your centers: Robot Process Automation (RPA).

Robots are great: they work 24/7 effortless, don’t make any mistakes, don’t want any special attention, are easy to maintain and low cost. They just sit either on your IT infrastructure or even on a Laptop right next to your other Shared Services colleagues. This is why they are the next evolution of Shared Services. You don’t have to go anymore to any low cost country to have low cost service delivery – you can have it anywhere. But that also means that you don’t need so many employees anymore to run your services. The positions Shared Services have created, the great impact on low cost labor markets is now turning around also to these countries (also, as in the first place, these positions were moved away from high cost countries). This is a true negative impact – and I have written about that here.

Employee Experience

Today, I would like to argue that this does not have to be the case – or at least not with full weight. This is due to another, very positive trend in (not only) HR and Shared Services: Employee Experience. The new way of Design Thinking (introductory video here) paves the way towards a more employee centric design, a way that actually is pretty close to what HR (with management and leaders of the company) should anyway do every day: Give employees everything to make them more efficient and effective in their daily work and provide an inspiring and motivating environment and experience. This is the way to create great business outcomes. And when I say “design”, this means structure, technology and process. Everything should and needs to be designed from the employee perspective: What do our employees need and want to be successful in their jobs? What do they need from HR or Shared Services? How do they get this in a fast, efficient way with a positive experience? These are the questions to answer – and one part of this chain of questions is also leading to the “right” process and channels into Shared Services.

Access to solve your problem

Coming back to robots: Robots are great to solve structured and rule based problems and processes. They are unmatched by any human. And we should truly let robots do these kind of activities as we will reach two of the top Shared Services metrics: Timeliness and Quality. A robot will be as fast as the infrastructure let’s it be – and it will create 0 defects. Wow, awesome. The problem though is that for a robot to be that perfect it needs perfect data input – and this data input is coming from employees directly. This creates two problems to solve from an Employee Experience perspective.

  1. The problem or question or request that the employee has MUST be standardised, too. It needs to fit into the “capability-box” of the robot.
  2. The employee needs to exactly know what he or she wants.

Now, both is often the case – but not always. Very often, an employee or a people manager has more complex topics to solve (or at least this is what an employee or people manager might think). In this case, Shared Services needs to help employees and people managers to quickly address any concerns, questions or challenges so that the employee or people manager can go to focus on their day job asap. There are two ways to help employees in this thinking and resolution process: (a) a fantastic, easy to use, complete and employee focused Knowledge Base and (b) good old fashioned direct human contact to an expert. And in some cases, employees want this human contact because of the sensitivity of the request or issue. In the end, we talk very much HR topics that can be sensitive.

And this is where I believe we should re-invest some of the robot savings: Tier 1 – chat, call, messaging support through human experts. This is still the major domain and best experience to get via a human contact. I believe that we need to “up” our game in solving employee and people manager challenges when they occur, quick and with an awesome Employee Experience. And for this, a human Tier 1 plays a big role. Do not let your employees and people managers search your knowledge base when they don’t know what to search for or need help. This costs a whole lot of productivity – and causes frustration. Give them the opportunity for the best interaction for any request they might have and this can either mean (a) opening a case that a robot can immediately execute (b) search the knowledge base to find the right thing to do fast or (c) “talk” to a Tier 1 Advisor to address any questions and execute your request.

This is the right experience we should create as Shared Services – we should shy away from utilising robots to create additional savings only. Let’s reinvest for the best Employee Experience.

An interesting autumn coming

Dear readers,

apologies for a very quite summer on this blog. The bad news is that I was extremely busy – the good news is: with interesting stuff. So expect new and exciting PoVs and posts coming soon.

Thanks for sticking around.

Ambient HR – the next revolution of HR Technology

In today’s world, the challenges and requirements towards HR are manifold and changing on an almost daily basis: Customer expectations, our social and cultural environment, technology – everything is changing more fast paced than ever. And that of course has a big impact on companies well. HR has to find the right answers to this changing environment – of course. But today I would like to write about a very old topic that is still very much present in our daily business and HR lives: The actual connection between HR and the business – or in more concrete terms, the connection between the people or line managers (at all levels) and what HR has to offer them to support.

There are many different areas of potential connections of course, and one specific connection that is especially frustrating and truly very rarely working seamless. The administrative pieces of people manager work.

I believe we all as HR professionals understand and advocate for people managers to be the owner of the people relationships and people management – and this ownership means that they should manage their teams and employees end-to-end. This actual accountability is today not really a big debate anymore. It is understood and accepted – but the debate starts where the act of actual management of people, the conversations, decisions, recommendations have to be turned into action – the act of initiating a pay raise after the conversation with your employee, the act of initiating recruitment after you have reached agreement with your manager about that role. This is where it often gets clunky.

Of course, modern HR systems like Workday or SuccessFactors make it easier than ever before and also very often straight forward. But: As a people manager you still have to:

  • Log-on to the system
  • Find the right process/ action
  • Understand what needs to be done
  • Fill in all required information (hopefully you have them or know where/ how to find them)
  • Send the request off… and wait

This does not feel right in today’s world. And this is where Ambient HR as an idea comes to live.

HR processes should only be there for two reasons:

(a) to support the business in what it needs to achieve
(b) to adhere to local legal regulations

(b) is something we cannot really change. But (a) is something where HR technology and processes need to seriously upgrade to toady’s technology possibilities. I imagine Ambient HR as a way to overlay the actual work that people managers are doing with the required HR actions. Let’s take the above cases.

A pay increase for example, should be initiated based on a conversation between people manager and employee. Ambient HR is connected to all systems people managers use in their daily work and so also to the calendar account. It notices that the people manager has set a career conversation with his/ her employee and automatically does two things:

(1) before the conversation happens, it pops up on the people managers computer and asks what this career conversation is about (e.g. new job, performance improvement, promotion, etc.) and based on the people manager’s choice, provides on the spot, just in time support (e.g. what needs to be taken into consideration, how the process works, how long it takes, what exactly needs to be done by the people manager  – all in context of the employee the manager is seeing) and recommendation (e.g. how high a pay raise could maximum be).

(2) after the conversation, the people manager receives the next pop-up window, asking for action with a pre-completed form based on the employee the manager has seen as well as the choices the people manager took in the first step (e.g. it is a promotion conversation). The manager just has to review and send off. All work done.

With such an integration, the administrative part for the people manager’ job to set in action what he/ she has discussed or decided to do becomes a simple, not time consuming and effective process. And similar integrations are possible with other systems at work like Time & Attendance, like your Sales System, etc. – and because of AI, contextual information and actions are easy to realise – it is like Google Now for work. Ambient HR is immersive in your day-to-day activities, not a nasty add-on, but an integral part of how you work – you don’t have to remember what, when how – it will tell you. And it will learn throughout your work day to be better every time it supports you.

Of course, you need to trust this system as it has access to all your data – but hey, you trust Google or Amazon or Facebook at home with your private data and at work such a system already houses your most sensitive data: people data. So why shouldn’t you trust it to listen in to your daily activities as a people manager?

Ambient HR is the future of HR Technology and it needs to start today.

Digitalisation of the workplace – further differentiating our workforce…and society

The future is bright and shiny – AI, RPA, IoT will make our lives easier and will help us getting into a more balanced way of work and life. – does that sound familiar? Right! The same claims were made with the introduction of computers into our (work-) lives and later with the online economy. And what was the result of both? – you know it: even more work and less freedom for those who still had a job – and an even more growing number of people w/o jobs. Sure, each revolution has also created new jobs – but not for everyone. Each revolution created jobs for a smaller and smaller talent pool. Why? – the skills, the requirements, the capacity one needed to have to fulfill these new jobs were more and more difficult to have or build. Many employees were just not able anymore to learn these new skills or to even think in the new categories that these new business models required.

At first – during the early revolutions, this was dealt with by early retirements – but this gets more and more difficult as employees need to work longer to be able to have a life as retirees, as well as there is a growing number of middle-aged employees too far away from retirement that cannot meet the requirements.

Don’t get me wrong – I am all in for the digitalisation of the workplace. I am a big fan of digitalisation and the chances it opens up at the workplace (and in private lives). But we need to change the way we handle the implementation of such revolutions.

In the past, businesses, the econcomy as a whole had always the same reaction: “Way we work”-revolutions led to new employees that can fulfill the demands of faster and more (let’s face it – besides many great outcomes, the recurring theme is that with each new revolution, workload increased, turn-around times decreased) while many old employees were squeezed out (and old not necessarily being used for age, but for long-standing). Companies used the easy way out. The pool was big enough and the outcry of the ones squeezed out was sufficiently small. Now, my thesis is that we are reaching an inflection point where this way of working – the way we actually do business is coming to an end.

Let me tell you why:

(1) More and more western countries are starting to have social uproars, to a great extent due to rising unemployment and increased social jealousy – the haves and the have-nots

(2) Even the part of the population that still has a job (the “Haves”) is struggling – struggling because of workload, increasing speed and required new skills.

(3) Job related illnesses that are psychological/ mental nature are raising and have surpassed physical illnesses (see here). Psychological triggered missed-work-days are having a higher negative impact in companies than physical triggered missed-days.

The next revolution of digitilization is quickly approaching and the populare opinion on what needs to happen is the usual: work faster, build up new skills. Problem is: Humans are NOT bots, cannot just as easily be reprogrammed or get a new, father processor. As after each work-revolution there will be loosers – just that this time I am afraid the added loosers will bring the system to the tilting point. The part of the workforce that will still be able to follow and be the winners of each revolution will be too small to stabilize the system – a system where the average age of employees in western countries is rising. And with rising age, adaptability and speed are decreasing – this is fact. Another key message from last years INSEAD “The Global Talent Competitiveness Index” reads “Low-skilled workers continue to be replaced by robots, while knowledge workers are displaced by algorithms”  (see here for the detailed analysis of our global workforce). – another group of losers. Also, just look in many of today’s boardrooms (and let’s leave the Silicon Valley out for a moment) – how many boardmembers are truly immersed in today’s ways of working? Social Collaboration, Social Media, “Appinization” – these are for many of them interesting concepts, but that is it. There is still a very large number of senior leaders that ask there assistants to “print their emails” so that they can “reply”. And they are supposed to lead us into the next revolution? – but this is a different story for a different post…

My statement is that we need to drastically change the way we do business from “employees that serve the company” to “companies that serve the society”. The solution is not to stop the future (although this is currently very much a popular theme in Trump-America), the solution is though to actively shape the future in a way that it serves society – and I mean each and every member of it. And not how we did it in recent industrial-revolutions: In a way that it serves the Shareholder alone. We must understand this now – or we will face the consequences of the path we are on – and although I am repeating myself, the signs are more evident than ever: Brexit, Trump-America, Alt-Right and other popular extremists on the rise.

The societal impact: Shared Services 4.0

One of the big themes and big discussions today is Industry 4.0 – what is meant is the next industrial revolution via IoT (Internet of Things) and further integration, communication and automation of machines. You can read more about it here. It will for sure have another big impact on worklife, culture and society.

What I would like to talk about today though is Shared Services 4.0 – which I believe is going down a similar route like Industry 4.0 – and therefore the same naming convention 😉

Shared Services 1.0 – 3.0

When you think about Shared Services from its origins in the early 90ies till now, it was about the following themes:

  • Process standardization
  • Process rationalization
  • Self-services
  • Near- or off-shoring of work

And subsequent near- or off-shoring of jobs. Because of Shared Services, many former colleagues in HR (or in any other (back-office) function) have lost their job, were in need to find a new job. Some of these colleagues had luck and found a new job – some of them for longer, many of them for short periods only. Why that? – quite frankly it was not one company that implemented Shared Services, but many – and with it 10.000s of jobs, all the same kind of jobs were near- or offshored. And only some former employees of these jobs understood it right and found their work-future in upskilling towards jobs that could not (at least for a period of time) get near- or offshored. A big majority though did either not understand that “rule” of life-long learning or – and no offense – were not capable to perform the next higher-level job. These former colleagues have lost contact and access to their job market – they are the lost people of globalization, being not unhappy anymore, but angry – don’t see any perspective other than turning back time. And as we all know, you actually cannot turn time back (at least not yet ;)) – and even if, there are sufficient people that don’t want to do that. In any case though, there are winners and lost people that now rather fight against each other than try to repair what has been damaged for the greater good of all.

If you think in broader terms though and at a global scale, you must admit that the majority of the jobs were not made redundant, they were just relocated. And so, the Shared Service economy has born new winners – countries like India, Costa Rica, the Philippines, a big portion of the Eastern European countries have “received” 1000s of jobs and with it managed to catch up with western countries, created new middle classes and brought young people into great starting jobs – with big potential for international careers.

Shared Services 4.0

The new waves of innovation and thinking in the shared services industry though will have different effects. Nothing will really change with the losers of the first waves – except that the distance between their knowledge and capabilities and the job requirements is growing. It is more and more unlikely that these former colleagues find a new job similar to their old one – they either stay unemployed or go for 2-3 parttime jobs which still cannot feed their family at home.

What is worse though is that the winners of waves 1.0-3.0 will turn into losers as well. – and the upskiled colleagues from the first rounds will lose their jobs, too. RPA and AI are the keywords.

Robot Process Automation (RPA) will slowly but surely eat away the lower qualified jobs in Shared Service Centers. Robots are getting sufficiently smart to execute without break, without mistake most of the standardized work within centers. Recent studies show that by now 80% and more of standardized work can be transfered to bots. And in turn, 80% of new colleagues will lose their jobs.

But it does not stop with RPA – AI, the next evolution is already on its way. Today mostly too expensive to replace low-cost country colleagues, but tomorrow (and it is almost literally tomorrow) this will change and not only standardized work will get automated but even more complex work where situational assessment and decision making are required. I know that most of the readers cannot wait to have AI in their life – me, too – but in their private lives, not at work. At work, this will lead to the next “let go” of colleagues – now though again in both western countries as well as low-cost countries. New losers of globalization are created.

 

Of course, this is great for the bottom-line of a company’s balance sheet and maybe for its Shareholders. But what about the rest of the country? rest of the world? – it will only further grow the difference and distance between the “haves” and “have nots” and it will further spur societal conflicts that are already on the horizon – or already in our lives like Trump and Brexit.

It is on us to change this, it is on us to make sure that we take everyone with us on that journey. Again, it is not the solution to stop time, but it is time to stop spreading the difference between winners and losers, generating more losers than winners. It is on us – we in HR are the ones closest to our workforces. We need to listen and come up with a plan.