Implementing a Shared Services Model

Organizations have been implementing shared services for over 30 years. And continue to recognize the strategic value in moving towards a Shared Services Model.

Shared Services merge redundant business units used by multiple parts of an organization. A Shared Services Model enables the best combination of processes, systems, and people, and has a business case within the organization that has been proven to reduce costs and increase efficiency. But it also needs a cultural change within the organization.

Here, we present the first 2 steps we recommend an organization should follow for moving to a Shared Services Model.

This is part 1 of our 2-part series on the Shared Services Model: ‘Moving to a Shared Services Centre’

Find the Optimal Combination for Shared Services

An organization can drive significant gains in process efficiency and economies of scale with the move to a Shared Services Model. The move can also free resources to dedicate more energy to value-added activities that better support the business and improve profitability. But, to reach more value from a Shared Services Model, it is important that organizations enable the best combination of processes, technology, and people.

• Processes

  • Which processes should be assigned to Shared Service Centres and which processes should be kept within an area or department?
  • How are all processes across the organization going to be managed end-to-end despite being kept or within a Shared Services Centre?
  • Will some processes will need to be outsourced?

• People

  • With constant reinvention and churn, how can the organization keep their people engaged and motivated?
  • How should new and compelling career paths be developed for retained and shared service processes across the organization’s staff and management?

• Technology

  • How does the existing technology within the organization support the Shared Services Centres?
  • How does technology influence the need for constant innovation?

Define Value of Shared Services

Organizations nowadays aspire to be value-added business partners, both internally and to operating units they support. However, they rarely proffer a definition of what it means for them to add value. Nor have set plans on how they would accomplish that goal, let alone measure their success in reaching that goal.

Three different options on how Shared Services can add value to an organization are Reliability, Simplification, and Insight.

• Reliability

Within an organization, Shared Services add value by delivering trusted, dependable and predictable services. Which provides internal business partners with certainty that processes will be carried out the same way throughout the organization. Furthermore, this reliable service adds value twofold: firstly, through standardization, consolidation, and re-engineering processes productivity improvements are realized, and transaction processing costs are reduced. Secondly, it allows business partners to focus on their jobs and responsibilities, without the need to be involved in processes not pertaining to their jobs.

• Simplification

Interactions as effortless as possible, without having to go through many iterations, meetings or sessions is the best way to make both internal and external business partners satisfied. And having simple processes for all Shared Services Centres to follow allows for prompt and correct service for the business partners.

• Insight

Using the wealth of data Shared Service Teams will acquire, the organization can enhance its financial performance by decreasing cost or increasing revenue. Hence, adding value to the organization. For example, using data on a vendor with late payments to justify a price increase of that vendor the next contract term.

To continue the effort of continuous improvement, the Shared Services teams – being now value-add business partners – should document all their work. This will improve the reliability of services, simplify the effort to do business with Shared Service, and improve the organizations’ financial performance.

If you like to discuss Shared Services or Process Improvement, feel free to reach out to us here.