In Part 1 of this series I outlined my perspectives on what is required to establish a solid foundation for shared services success. The article addressed the need for a clear definition of shared services in the context of each organization, clearly defined scope, goals and outcomes, adequate long term investment and visible senior level executive commitment
This paper addresses some key implementation success factors. Part 3 will address ongoing operational requirements for sustained success.
Part 2: Implementation
1. Transfer Service Delivery Responsibility
The first step in the implementation of shared services following Executive approval of the business case and agreement to proceed is to transfer the service delivery responsibility to the shared services organization. While still remaining physically separate all shared services staff start reporting to a common executive providing the basis and opportunity for commencing process and organizational redesign.
2. Differentiate Functional Governance From Service Delivery
Most corporate ‘staff’ functions have traditionally carried out both governance and service delivery functions simultaneously, sometimes frustrating clients by attempting to control compliance to policy through controlled service delivery. When moving to shared services there is a need to clearly differentiate the delivery of services to clients from governance related activities such as policy development and assuring compliance to the rules.
Differentiation can be accomplished in a number of ways. One option is to separate governance functions from service deliver organizationally. A more pragmatic approach is to have policy and service roles carried out by the shared services organization but in the context of a clear understanding of the roles and accountabilities related to carrying out these two diverse functions.
3. Define a Workable Financial Structure
For many early adopters of shared services “chargeback” was widely regarded as the preferred funding model for shared services. The term “chargeback” means “fee for service” and is the cost charged for a specific service on the basis of real time consumption. Chargeback was seen as a way of regulating demand for services as well as providing cost-transparency. However, chargeback has not been effective in regulating demand and is expensive and cumbersome to manage.
Funding models have evolved since the early days and there is now a widely accepted trend to use different funding approaches based on the extent to which the client organization can influence service demand, service levels, and/or service costs. Funding models typically include elements of corporate overhead, allocation and chargeback.
4. Implementation is a Complex Change Management Exercise
The capability to manage the change from current state processes, structure and technology to the desired future state is critical for the success of a shared services initiative. A comprehensive change strategy and plan (that includes communications, stakeholder management, training, organization design, development of a service culture, and workforce adjustment) is needed to manage the transition to the desired future state. Shared services implementations that do not effectively address this issue will be unlikely to achieve sustainable results.
5. Get the Oversight Right
There should be three distinct elements for the oversight of the shared services organization.
Business Oversight is to approve and oversee operations including vision, goals, service model, resource allocation, capital expenditures, etc.
Client Oversight provides advice and input related to client and customer short and long term service requirements, and providing performance feedback and service quality assessments.
Functional Oversight provides the functional policy and strategy framework for the delivery of shared services. This includes audit and compliance against policy and ‘rules’ as well as assessment of shared services performance as it relates to the desired functional direction.
Part 3: Operations
About the Author: Rob Cooke is a leadership advisor, strategist and coach. Drawing on a strong background in business and organizational development, Rob utilizes his extensive consulting experience to help leaders address emerging challenges, seize opportunities and execute approaches to achieve personal, leadership and business goals.