Administrative expenses associated with support functions exceed $2.5 trillion
In the United States and Europe alone, more than 25 million people work in support functions—HR, IT, finance, customer call centers—in companies across a diverse array of industries. The administrative expenses associated with what are also often called shared services exceed $2.5 trillion, according to BCG analysis.
Imagine what these organizations could do if they not only cut the administrative expenses for these functions roughly in half but also:
Savvy use of digital tools and technologies—such as robotic process automation (RPA) and artificial intelligence (AI)—can help companies turbocharge the performance of their support functions. How? Digital transforms these functions from merely transactional service factories into service-solution providers and strategic partners that unleash new value throughout the organization.
Armed with digital tools, employees in these functions can draw on the right data—from multiple sources, in real time—to swiftly deliver services tailored to the needs of their internal customers, at every step in the customer journey. That kind of service frees customers—employees, managers, and executives—to devote the lion’s share of their time and energy to activities that create the most value.
When people can focus on value-adding activities such as formulating effective strategies, designing successful marketing campaigns, analyzing the competitive landscape, and crafting smart business plans, they and their entire organization win.
BCG takes a holistic approach aimed at achieving and sustaining positive change for our clients by:
BCG is helping large, complex global organizations complete ambitious digital transformations of their support functions and shared service organizations, across all industries, including automotive, pharmaceutical, consumer goods, industrial goods, mining, and IT. Thanks to our holistic approach, we have built an extensive track record of success with our clients. Examples of results include 30-75% reductions in FTEs and 40% targeted cost reductions.
New technologies are changing how support functions work—and rendering some of them entirely obsolete. To capitalize, companies need to reorganize those functions from the ground up.
Using a three-part approach, companies can redesign processes and choose the right tools to unlock the real value of digital technology in support functions.
Adopting a best-of-breed approach improves flexibility in critical processes while unleashing more agile ways of working.
When your talent pool is living on Facebook and technology is changing every facet of your business, it’s time to move on from old, hierarchical and rigid processes and structures toward new ways of thinking about organizations that are dynamic, decentralized, interconnected and tech-enabled.
With digital technologies and BCG’s three-point approach, professional services firms can realize cost savings of 30% to 40%—and rev their commercial engines.
Deploying digital at scale requires establishing global process owners, centers of excellence, and a customer- and business-centric culture.
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