Over the last couple of decades, organizations have made significant progress utilizing shared services and outsourcing to optimize and improve performance. Over this time period and even in a more accelerated manner in the past 5 years, Shared Service Centers (SSCs) have tended to become more global, multi-functional, virtual and cross-organizational (i.e., operated by more than one entity/business partner). In short, they have become more sophisticated, evolved and intricate.
When evaluating your business operating model, strategy and goals, here are five critical success factors to keep in mind for optimizing shared services and achieving the next level of performance.
- Culture – when many SSCs started, it was essential to create a SSC culture focused on operating like a profit-oriented business. This remains mission critical, but despite 20+ years of experience in this arena, the concept is still elusive for some organizations. SSC leaders play key roles in articulating, selling and bringing to life the vision and SSC value proposition for customers and employees alike. Most internal business units will continue to sign-up for shared services, if (and usually ONLY if) they can achieve a steady track record of lower costs, relevant subject matter expertise, and world class service.
As part of the culture, processes must be re-designed and people continually incented to relentlessly focus on the ultimate customer, as well as their changing needs. As part of your culture and operating plan, build in competitive benchmarking and significant training to facilitate achievement of your specific, clearly-defined goals.
2. Continuous Improvement (CI) – this is a huge driver of success. It is no secret that SSC customers want lower costs and responsive service. How do you get there? Another main role of a SSC leader is to own end-to-end processes and focus on continuous improvement to deliver what customers need. Click here to visit TSI’s Process Improvement page for more information. Leveraging ISO, Six Sigma, Quick Change, and other CI frameworks will provide ample ROI, SSC employee ownership, and drive results in this area.
A key point here – measure, measure, and measure again. Balanced metrics and broad-based communication of successful performance milestones will sell your value and keep all stakeholders focused on the goals and activities that matter most.
3. Technology and the Cloud – go all in to leverage technology and the cloud. The options and possibilities are ever-evolving and complex – ERP, CRM, eCommerce, workflow, AI, mobile apps, predictive analytics, data visualization, bar coding, cloud integration, Google apps, and the list goes on… Bottom line here, you can’t afford to not have an up to date technology strategy and plan to generate top-box performance through automation, innovation, and technology utilization. Create a truly differentiating customer experience – Click here to visit TSI’s Customer Experience Training page for more information. Finally, spreading the costs and benefits across multiple business units, functions and channel partners lessens the risk and increases the odds of achieving the required benefits.
4. Service Level Agreements (SLAs) – this is a necessary continuation of CI from above. SLA’s will drive CI and customer satisfaction. It is a very worthwhile exercise to develop and iterate comprehensive SLAs – including: in-scope services, ad-hoc requests, agreed service turn-around times, quality of outputs, roles and responsibilities, metrics, cost/pricing, issue reporting and escalation, dispute resolution and other special requirements. Integrate SLAs into the culture via training, measurement, and rewards. Be careful, there is a real balancing act to assure SLAs are neither too complex nor overly simplified.
5. Local/Regional/Global Centers of Excellence (COE’s) – this is one of the more challenging elements of an organization’s operating model. It poses several questions, including – What are our core competencies? What functions and services should be shared locally, regionally, or globally? What geographies should they be located in and why? What are the risks involved? And, can certain sub-processes or activities be virtual outside of a main SSC? Naturally, as processes become standardized and routine, they are candidates for shifting to lower cost COE’s and geographies (e.g., APAC). However, for processes like Tax, a local level of subject matter expertise is required. The answers to these questions depends in large part on an organization’s geographic footprint, knowledge of a specific country’s legal, political and regulatory environments, as well as a host of many other issues. Collaboration with multiple business and channel partners can help provide guidance and direction here.
Evolving your operating model to optimize shared services and take advantage of new tools, practices and opportunities can pay handsome dividends. Keeping in mind the above critical success factors will greatly increase your odds of success. Contact TSI at tsi@transforming.com to learn more.
