Technology and Innovation in Global Shared Service Centers
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5984 Downloads I Published: 17 Nov ,2017
According to Bitner, Ostrom and Morgan, (2008) Global share service centers can be defined as a dedicated unit (including people, processes and technologies) and this centralized point of service is developed to improve business functions supported by IT and IT services. In modern era, cut throat competition and a slow global economic recovery create challenges for almost every size of companies in virtually every industry. Today’s market leaders and enterprises rethink about their existing operational models and emphasize on finding the ways to spend less and achieve more with fewer resources in order to support their strategic direction (Bitner, Ostrom and Morgan, 2008). By establishing global service centers, firms will be able to take advantage of innovation and technology as well as seamlessly connect, interact and respond to customers, consumers and suppliers across the business now and into the future in an effective manner. In dynamic changing environment, companies are seeking to reach the next level through bringing innovations and concentrating on what they do best-growing the business. In order to aggregate transactional and common activities, companies are focusing to establish globally integrated business services (GIBS) unit to promote their business activities effectively.
According to Maglio, Srinivasan, Kreulen and Spohrer (2006) on the basis of the structure, governance, challenges, ROI objective, location and metrics, local and global business unit differentiate can be described effectively. At local or regional level, business unit controls over various activities such as headcount and budget etc. In addition, each function operated separately due to this sometime challenge is raised in implementing strategies like fragmentation and inefficiency. The motto of developing local business unit is to reduce cost. While on the other hand, global business service centers unit handled by leaders and they perform various activities including cross-functional, common activates, budget and other activities operated globally on an end-to-end basis (Maglio, Srinivasan, Kreulen and Spohrer, 2006). Apart from this, top down executive sponsorship and end-to-end process optimization service excellence are required in order to take several benefits such as better use of technology, improved data integration & visibility and extension of innovation across cross-functional and global services to enable better decision making at the workplace etc.
As per Pal and Pantaleo (2005) global business services model is multifunctional and capable to manage end-to-end processes in an appropriate manner. Today, most of the retail organizations like Tesco and Adsa are concentrating towards implementation of a multifunctional approach to shared services and effective use of their resources to attain aim and objectives of the companies within stipulated time. In dynamic changing environment, multinational companies and large enterprise groups are concentrating to use of global share service as an operational model and for that they develop a physical entity acting as the in-house sourcing center to standard support to various business units and regions effectively.
It can be articulated that Global service centers would be beneficial for the enterprise in terms of increasing core business, shared different services (HR, Finance, CRM, Supply Chain and IT services) and outsourced services to reduce cost of business functions in an appropriate manner (Ernst & Young, 2011). However, in order to bring innovation, improve service quality, reduce operation costs and enhance core competency, successful implementation and application of SSCs will be required effectively. Apart from this, through opening global service centers, enterprises would be able to take several advantages such as performance improvements, demand management, Process strategy and Transformation, Transition Management and planning and monitoring service provider stability properly etc. In addition, due to emergence of new technologies and innovation, organizations are now able to take several benefits of GSC including process efficiencies, career opportunities for employees, add additional value to business activities, talent sharing and better use of time for the retained business in an appropriate manner (E&Y, 2014).
The theory of Transaction Cost Economics (TCE) emphasizes on opportunistic hazard and firm-specific productive capabilities. This theory has been defined to determine transaction costs associated with exchange of resources with the external environment (Klein, 2006). It could be reflected by various factors such as environmental uncertainty, bounded rationality, risks, core company assets and opportunism etc. According to Bremen and their colleagues, Transaction Cost Economics theory had been used to postulate transaction costs of information, communication and determine government structure of supply chain.
In the present, most of the companies are emphasizing on their shared services effort in order to enhance integration between various functions, such as information system, human resource and data systems etc. For example, Amoco was considering reorganization of its business units after evaluated its shared services and service delivery mechanisms. Further, it was converted to 15 business units to leverage existing knowledge and create a unified corporate culture within the enterprise (Mytelka and Farinelli, 2000). After that, firm was implemented centralize transaction-processing operations system to take the process to a higher level and increase both the efficiency and effectiveness of the support services activities effectively. According this model, Global Service centers is entrepreneurial in nature in which knowledge-based tasks are recreated as centers of expertise. Through developing centralize system, enterprise has been able to better control and monitoring over all business functions of the enterprise effectively.
In order to attain ever-higher levels of productivity, precision and predictability, Global shared service used new emerging technologies including Big Data, Cloud computing and other open source technologies to reduce companies’ infrastructure cost and bring innovation at the workplace. Cisco inaugurated its Global Shared Services Center (GSSC) in Mexico to provide better services to their customers worldwide through multiple functional groups. In addition, for building and managing their network and solution, two laboratories were developed. Different types of technologies including Datacenter, Mobility, Wireless, SP Video, Routing and Switching were used to o re-create environments and to prove configurations before deployment. Today, clients are so smart and they are expecting increasing amounts of innovation from their service center partners in order to share their vast expertise and deep connection with customers effectively. According to E&Y (2014) GSSC brings innovation in business in terms of building complex systems, processes or software and simplifying the ways of doing business. Beyond the institutional advantages, global technology and innovation group of global centers provides truly global service to their clients in both established and emerging markets. Another example of Global service center is Tesco (Demirkan, Kauffman, Vayghan, Fill, Karagiannis and Maglio, 2009). According to Tesco's group infrastructure IT director, has spent large amount of money in consolidating global datacenters into UK shared services in order to expand their online business across eight countries. Accenture is also provided Global center establishing services to their clients. Enterprise has 226,000 professionals across the world to provide various facilities to their customers such as diversified group of strategy, digital, technology and improved business functions in the world. Sutherland global service Provider Company provides various services to their customers in order to increase customer experience, maintained consistent quality in business functions and solve their technology related issues in an appropriate manner. For that firm has used its technology and human resources effectively such as 2000 MB of meshed-telecom infrastructure, Customized Technology solutions (100+ Sutherland IP Applications, Tools & Products) and Six Sigma certified engineers as per the changing business needs of their clients. Atos is concentrating towards providing highly- specialized solutions for specific industries by offering facility of digital asset management systems and their resources in an effective manner (Maglio and Spohrer, 2008).
Drastic changes arise due to adopt emerging technologies and innovation in retail enterprises on the keys roles of staff members within the enterprises can be understood with help of diagram. The below figure shows that by using various techniques including virtual presence, instant messaging, screen sharing and white board VoIP and performance dashboard, team management related can be improved. For improving knowledge sharing and query resolutions, instant messaging, video calls and VoIP techniques can be applied. According to Caroline (2013) regarding to bring innovation and technology up-gradation, it is essential for the retail enterprise to provide training to their staffs. By doing this, companies would be able to retain talented employees with firms for long time period. In addition, to overcome resistance of employees, management of the firms should focus on increasing awareness among staff-members so that they will support to change. Besides that, IM, Phone, Skype, ERP, CRM and SCM techniques would be beneficial for the retail enterprises regarding to establish communication between Global Shared Service Centers and employees of clients companies effectively (Mytelka and Farinelli, 2000).
However, along with the several advantages some drawbacks are also associated with implementation of Global Service Centers including loss of face-to-face service; large capital outlay is often needed and relocates employees to staff the center, etc. Apart from these issues , Costs and benefits, location impact/planning, Tax and fiscal issues and standardized applications and data can create hurdle in successful development of Global Shared Service Centers in order to bring innovation and take benefits of technology at the workplace. Organizations are focusing to develop Global Portfolio of solutions and Global Key Offerings to their customers through merger and acquisitions techniques. However, due to lack of communication and transparency, enterprises would be unable to take benefits from GSSC. After using technologies, retail companies of UK like Tesco, Sainsbury and Asda would be able to establish better communication with their shareholders and solving customers and employees within stipulated time (Palmisano, 2006).
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According to Bowsher (2013) Global Shared Service centers can improve their services through emphasizing on integrated solutions such as performance improvement diagnostics, high speed cost diagnosis, Lean Six Sigma, Business Process redesign, capability sourcing, optimize the R&D function and deliver the promised customer experience at the right cost etc. Apart from this, by assigning roles and responsibilities on the basis of employee’s knowledge and skill level, morale of staff can be enhanced.
The rationale behind to carry out the present study is to investigate the impact of establishing Global Shared Service Centers in order to bring innovation and technology advantages at the workplace.
There has been a presence of many studies that are based on Global Shard Service Centers. Different studies have also been conducted with respect to benefits and challenges of GSSC. But no studies were conducted to examine the drastic changes that arise after implementation of innovative and new emerging technology in shared service centers. In the present study, investigator will focus on this area being benefits and challenges of the development and establishment of Global Shard Service Centers. Further, scholar will try to establish link between previous studies and current research by providing valid information related to the topic effectively. Apart from this, researcher will also emphasize on the use of various technologies including Cloud computing, Big, Data, Six Sigma and other open sources technologies in order to reduce organizational costs and increase profit margin of the company effectively.
The conceptual framework of the study clearly describes the drastic changes arise after implementation of different technologies at GSSC. In this regards, theoretical triangulation approach can be used which helps in gathering and interpreting data using more than one theoretical sources like articles or reports. By applying this model, researcher would be able to investigate the impact of implementation of different technologies in global share service center and determine drastically changes arise after implementing this technique in the workplace.
The present research is conducting by considering the retail industry market and IT companies have been taken which provide facilities of establishing Global Shared Service Centers in order to increase global reach of firms and increase profit margin through penetrating more customers towards the brands. In the proposal, investigator emphasizes on the impact of GSSC in terms of bringing innovation and technology advantages at the workplace effectively. In order to carry out the study, researcher has been focused on secondary data collection approach in which investigator found research gaps left by other researchers in their studies (IBM Global Process Services, 2011). Along with this, present study can be expanded in future by more concentrating on technologies used in different Global Shared Service Centers across the UK and their impact on performance and overall growth of the employees. Time and cost are the major limitations of the current study and due to limited time period, investigator is conducted study on the basis of secondary data collections and thematic test has been applied to test the result. But present limitations of the current study can be overcome through conducting primary data collection method and data collet from the employees of companies which were using services of GSSC. Data collected from employees will be helpful for investigator in terms of identifying the reasons motivated companies to establish Global Shared Service Centers (IMA, 2000). Besides that, current study conducted by researcher would be beneficial for organizations in order to bring innovation and technology at the workplace to meet expectations of the customers in a proper manner.
The main aim of the study is to investigate the impact of establishing Global Shared Service Centers in order to bring innovation and technology and it is closely related to other objectives of the research. Present aim of the study and objective which include identify the drastic changes arise within enterprises due to adopt emerging technology and innovation in GSSC are linked with each other in order to examine the benefits of establishing Global Shared Service Centers for retail industry. In addition, research objective which include examined the challenges associated with the set-up of Global Shared Service Centers is closely related with the secondary data collection method. By using this method, researcher would be able to detail investigate about the issues that can create hurdle in successful implementation of GSSC within retail sector. With help of thematic analysis method, investigator would be able to attain major aim of the study and other objectives of the research within stipulated time. Apart from by framing theme regarding to explore the ways through which performance of Global shared service centers can be improved, researcher would be able to evaluate the major impacts of establishing Global Shared Service Centers on organizations and their employees in an effective manner.
As per the given case scenario, triangulation approach will be used in which data is collected through effective use of a variety of methods to collect data on the same topic. In order to capture different dimensions of the same phenomenon, this technique will be helpful. In the given case, researcher can apply different methods including Investigator triangulation, theory triangulation and methodological triangulation etc. to check the validity and see the difference perceptions of scholars and authors about the phenomena. In addition, researcher triangulate the aim, objectives and research methods to interpret the difference in findings on the same issue for data collected using more than one method (IBM Global Process Services, 2011). Besides that, this approach will also help researcher to check out the consistency of findings generated by different data collection methods.
In order to carry out the current study related to topic “Technology and Innovation in Global Shared Service Centers”, different sources which include books, journals and online published articles will be required. Along with this for preparing the report, Microsoft office and analysis the data and developing graphs, MS excel will be required. In addition, to conduct the study and access the data, prior permission will be essential. In the context of presenting the report, Microsoft Power Point tool is required. Apart from this, specific online published report of E&Y, Cognizant and IBM companies would be considered.
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