Shared Services done right will grow your bottom line

November 13, 2017 | AlignOrg Solutions | HCI
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Organizations continuously strive to increase the efficiency, consistency, and quality of support services like human resources, finance and information technology. The better these back-office functions work, the more time your people can spend on activities that grow the bottom line.

Think of what goes on behind the scenes where you work. Support functions like IT, HR or finance have the power to make the jobs of front-line employees easier or more difficult and complex. To improve support for business operations, organizations often implement a Shared Services structure. Unfortunately, these organization designs don’t always deliver the goods.

The Promise and Pitfalls of Shared Services.

Shared Services organizations combine resources and work in one place to achieve synergy and efficiency across business units and regions. Ideally, a Shared Services model also enables a function like HR to support the business in a more consistent, standardized manner. Unfortunately, Shared Service organizations sometimes become unresponsive to the business clients they exist to serve, because they become disconnected from the business and adopt processes and practices that make the work of employees and business leaders difficult.

It might sound preferable to simply do away with the Shared Services model if it’s that unreliable, but then an organization might miss out on the potential increases in efficiency, consistency and overall quality of services. A well-run HR Shared Services group can also improve your employee experience and enable the rest of a function like HR to focus on strategic talent issues or in finance to focus more on strategic business advisory work.

In a recent HCI webcast, AlignOrg Solutions identified the following four principles that can lead to Shared Services success.

Start with the work.

Begin by ensuring clarity and alignment with the organization’s strategy and the requirements of the proposed Shared Services function. Consider what kinds of work are being done in your organization and how a Shared Services organization might support it.

One way to evaluate workstreams is to consider whether activities are “Strategic” or “Essential.” Strategic work tends to involve executing business strategy, bringing value to customers or creating differentiation against competitors. Essential work is integral to the continued operation of your business, but is not always seen or felt by customers.  Essential work only needs to be done adequately. Activities like paying taxes or ensuring regulatory compliance tend to fall into this category.

If your Shared Services organization is going to focus on activities with “Strategic” impact (e.g., customer service centers) you should focus on the effectiveness and quality of your service delivery. If, on the other hand, it is going to perform “Essential” activities, you should emphasize efficiency and automation.

Identify key capabilities.

Before you think about designing and staffing your Shared Services organization at an operational level, you must identify the capabilities required to deliver on your strategic requirements.

Instead of following the best practice du jour, align Shared Services’ people, processes and technology with the organization’s overarching strategic goals.  If your leadership wants to foster innovation and new product development, consider how the choices of your proposed Shared Services organization could help (or hinder) that goal.

Create together.

Great Shared Services organizations are developed in concert with business leaders. It doesn’t matter which support function (e.g. IT, HR, finance, etc.) for which you are planning a Shared Services transformation, if you don’t involve your internal (and in some cases external) customers in the design, you will struggle to design an organization that will deliver what is expected. Working with your clients in this way enables you to identify the best practices that actually fit your needs, and design a fit-for-purpose shared services organization.

Plan and manage the change.

Your change management approach, which seems obvious but is often overlooked, can make or break your Shared Services transformation.  Make sure to focus your organization’s resources on this crucial stage. Effective change management takes into account the difference between change at the individual and organizational levels.

Make sure your leaders and managers are equipped with the necessary tools and training to support the change.

Although the process isn’t always easy, Shared Services transformations, when properly designed, rolled out and executed, can produce major increases in the efficiency, quality and consistency of services provided to the businesses they support.

Learn how to design and develop successful shared service strategies in the on-demand webcast, Optimizing Shares Services Efficiency and Effectiveness.