- Blog , Digital Transformation
- Published on: 07.11.2023
- 10:46 mins
Shared services and business process outsourcing: Business services to optimize your processes and structures
Managing a company is about far more than running day-to-day operations. From procurement to human resources, through finance to information technology and marketing, there are so many different processes and tasks that make up a day in business. These tasks can be a real burden for many companies: while some don’t have the required infrastructure in place or lack the skilled personnel required; for other companies, these additional tasks have a negative impact on the business’ productivity, finances and ability to react. Business services help companies to combine similar business functions and processes and to outsource these to a partner. Digitalization and automation are then utilized to secure the company’s long-term success.
Consolidating processes with the help of business services
Digital and automated end-to-end business services help your company to overcome the diverse challenges of everyday operations and to streamline your business processes so they are more efficient and effective, bringing value over the long term. Read on to discover how your company can benefit from business services and why their implementation promises far more than just cost savings and other efficiencies. In this article, we focus on shared services and business process outsourcing (BPO) as two of the key methods for implementing business services.
In order to bring the theory to life, we also present a successful case study from the automotive industry to illustrate how our 5-stage model can help your company reap the benefits of business services.
What are business services?
The term business services can essentially be used to refer to any service that is related to and supports business processes. Business service providers utilize their experience and expertise to consolidate the tasks and processes from different business functions and employees so they can run more efficiently.
As an IT and management consultancy, MHP offers a range of business services and utilizes either shared services or business process outsourcing depending on the individual company in question.
The difference between shared services and business process outsourcing:
- The term shared services refers to consolidating similar functions or processes within a company and establishing one central provider of these services. The company can either look to provide these services in-house or delegate these shared services to a provider like MHP. As the shared service center (SSC), the service provider acts as a centralized unit and delivers a range of support services for different business functions, locations, and even subsidiaries.
- Managed services or business process outsourcing refers to the outsourcing of specific services or business processes to external service providers. Service level agreements (SLAs) are used to delegate the responsibility for these outsourced services. The company in question utilizes the expertise, resources and efficiency gains of other companies so they can focus on their core business. Here, MHP acts as an external service provider to continuously improve the processes and maximize the potential of digitalization and automation.
Enterprise service management – the cornerstone of MHP business services
Business services are tailored to meet the specific needs of the company in question to provide real added value to the business. But which business services does MHP provide?
Our business services include a range of functions and activities that contribute to efficient and smooth-running commercial operations. They may be of a technical, administrative or advisory nature, and they span from departments like IT support and bookkeeping to human resources and customer support.
MHP provides business services based on the principles of enterprise service management (ESM). This is a framework in which the methods and principles of information technology service management (ITSM) are applied to other areas of business. ESM allows you to implement best practices, such as incident management, problem management, change management, service-level management and other service management processes, thus laying the foundation for improvements to the quality and efficiency of the business services.
Case study: Business services bring fresh impetus to a prestigious company
The best way to explain our business services is to use a concrete example of how we have successfully implemented these services through our consultancy business.
A prestigious German car manufacturer needed support implementing new business services in departments including research and development, finance and IT, production, logistics and supply chain management, human resources, sales and marketing, and procurement. The objective was to facilitate long-term improvements to the company’s operations in these areas. A further focus was on optimizing data management and auditing at the management level. The automotive company had estimated that around 250 full-time posts would be required to cover all of these tasks in the period up to 2026.
Implementing these optimizations comes at a great financial cost for companies, but it is not just about the financial outlay: communication, organization, and flexibility are also critical when it comes to implementing new structures – and a certain amount of alignment effort is also required. Bloated administration, complex decision-making processes, inconsistent data, and roadblocks due to a lack of local expertise when it comes to internationalization can all thwart a company’s growth.
The business services provided by MHP can help to improve a company’s capacity while also making it more agile. This in turn allows the company to get back to focusing on what it does best: its core business. Business services also improve collaborations between different local companies and branches as well as subsidiaries in other countries and cultures. By outsourcing services, your company can benefit from the expertise of local employees. This can mean lower wage costs, but more importantly can also help to promote bilateral exchanges.
Shared services or BPO? Which type of outsourcing is best for which type of company?
Shared services are generally well-suited to medium-sized and large companies with several business units, departments, or locations. There are often a multitude of similar business functions or processes within these companies that are ripe for standardization or centralization. This results in economies of scale and cost efficiencies. Establishing a shared service center with digital technologies and automated processes facilitates a more efficient use of resources, process harmonization, and the establishment of best practices.
BPO is suitable for companies of all sizes but is ideal in cases where an external service provider can offer expertise, efficiencies, and scalability that the company cannot achieve using its own resources.
As a large company with a corresponding organizational structure, the car manufacturer in our case study was best suited to the shared services option. Following detailed discussions with MHP, it soon became clear that this approach promised the greatest benefits and the most added value.
MHP’s 5-stage model: Successfully implementing shared services and BPO
In order to realize the full potential of these benefits and added value for the car manufacturer from our case study, MHP looked to implement the shared services based on a 5-stage model.
Strategy and analysis:
This stage focused on performing a comprehensive analysis of the initial state of affairs for the automotive company and on developing a clear strategy for introducing the approach to shared services. Objectives, priorities, and requirements were defined as part of a collaborative process, while potential cost savings and increases in efficiency were identified.Feasibility and design:
The next step saw MHP assess the feasibility of the approach to shared services and develop a detailed concept. This incorporated organizational, technical, and financial aspects to ensure feasibility. The requirements for the future shared services were defined and decisions were made concerning the functions and processes to be integrated.Practical organization:
The design stage was then followed by the concrete planning. MHP worked together with the client to stipulate the practical details of the shared services, as well as the precise structures, processes, and responsibilities. Service level agreements (SLA) were drawn up, while the technical infrastructure, reporting, and communication channels were all also established.Implementation:
In order to turn theory into practice, organizational changes were then made, such as establishing the shared service center and the reallocation of tasks. Employees were trained in the new processes and ways of working. Technical systems and tools were implemented and tested.Operation and further development:
The shared services have been operational since their successful implementation. MHP continues to monitor the processes in order to assess the quality of the services and to optimize them further where required. Feedback is captured and KPIs are recorded to help identify and act upon potential areas for improvement. This serves to guarantee high-quality and efficient services over the long term.
Could you benefit from shared services and MHP’s expertise in business and shared services? Or would you like to find out more about implementing the 5-stage model in your company? Contact us for an initial, no-obligation consultation!
Why deploy business services?
Are you looking to improve the level of strategic analysis within your company? Or maybe you want to push on with automation and digitalization. Our business services can be effectively deployed to achieve one or several of the following goals:
- Cost savings: Outsourcing functions that don’t relate to your core business saves your company money. This is partly due to the increased efficiency of the processes themselves and partly due to eliminating redundancies and the resulting economies of scale.
- Secure company success over the long term: Deploying business services leads to a more effective service provision, improved processes, quality optimizations, and increased customer satisfaction. The result? Your company becomes more competitive and more successful.
- Strategic realignment: Optimizing business services allows you to implement new business models, introduce innovative solutions, and focus on new markets or customer requirements. It can contribute to the implementation of your business strategy through the effective provision of services and the use of best practices.
- Digitalization and automation: Increasing the digitalization and automation of business services is often the decisive factor when it comes to improving business performance. Digital technologies (such as RPA, AI-assisted workflow automation, process mining, and optical character recognition) can help to reduce repetitive and time-consuming tasks, leading to an increase in the productivity of shared services.
- Focus on your core business: You can use business services to outsource or centralize functions that aren’t relevant to your company’s core business. Standardizing services and optimizing processes frees up internal resources so employees can focus on key, strategic tasks and on securing a competitive advantage.
- Secure your company’s future: Business services strengthen the performance of your company. They help to minimize risk, keep operations running smoothly, and allow your company to respond quickly to changes in the external business environment. They can also contribute to customer satisfaction and loyalty – a key factor when it comes to the long-term success of your company.
Take your company to the next level with business services from MHP
By establishing a shared service center and through the provision of corresponding business services by MHP, the car manufacturer is now ideally equipped to further streamline its internal processes and to complete tasks in the most efficient way. MHP’s IT expertise has also really proven its worth: as a specialist in digitalization and automation, MHP uses modern tools and solutions to configure shared services in the most efficient way possible and has a wealth of expertise in the field of digitalization. And our support doesn’t end at implementation; we also continue to monitor your processes and identify potentials for automation within your business.
MHP’s service portfolio isn’t just limited to shared services – the IT and consultancy business also offers business process outsourcing (BPO) as part of its business services. Just as with shared services, the options for BPO are wide-ranging, spanning from classic information technology services to invoicing and finance to business administration.
Contact us to reap the benefits of tailored business services! We utilize the power of digital technology and automation so you can focus on your core business and on the success of your company.
Shared services and business process outsourcing – FAQs
Business process outsourcing refers to the outsourcing of certain business processes from a company to an external service provider. Specific tasks or entire processes can be outsourced to a partner who specializes in this type of service.
Shared services and business process outsourcing represent two different approaches to the optimization of business processes, although they share similar objectives. Shared services concern the central provision of services within a company. By contrast, in the case of business process outsourcing or BPO, business processes are outsourced to an external service provider. MHP can help with both of these approaches.
t MHP, the shared service approach follows a five-stage model. This encompasses strategy and analysis, feasibility and design, practical organization, implementation, and operation and further development.
Shared services can definitely be worthwhile for companies. Companies can enjoy a wide range of benefits by consolidating different business functions and processes. These include cost savings, improving the quality of their services, as well as greater flexibility and a more agile business model. As a pioneer in the field of digitalization and automation, MHP is here to help you implement new technologies so you can focus on boosting productivity within your company.
