The world of the fair-and-square hates steroids, but there's no denying the advantage they provide their user.
Ethics aside, I have been thinking about shared services and the advantage it can offer its company.
I'm not talking about the profit margin boost of a few per cent (which is clearly attractive). I am talking about the injection in the corporate arm translating into serious game-changing advantage.
This is commonly called 'commercializing' shared services.
There are 5 primary routes an SSO can take:
- Stay captive
- Outsource
- Do a blend of the two
- Commercialize and become a BPO (look at the HP model)
- Commercialize and be bought by a BPO (look at the Philips model)
The last two represent a shot in the arm I am talking about. But it's the 5th option I'm particularly interested in today.
In 2007 Infosys bought Philips' three centers in Poland, Thailand and India for $28 million. Not a massive deal, but equally not bad for a non-revenue generating business that was only four years old. The deal also included $250 million worth of outsourcing services.
This injection of capital changes the potential possibility for a company, especially if the company is cash-poor. Overnight, a non-value adding part of the business is sold to generate much needed liquidity. This liquidity can offer the required edge in acquiring a business that can help the company enter a new market, or acquire a much needed product, or oust a competitor.
With BPOs looking for anchors (centers in specific horizontals (F&A) and in specific industries, and in specific geographies), companies would be wise to develop their awareness of commercialization, and use their shared services operation to help them in their wider strategic maneuvers.
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