First of all, what is a shared services model? It is
the way in which the operating model of the organisation is designed to achieve
the correct balance of centralized & decentralized services and
policies. In simple terms, Shared Services means providing
a standardized and consolidated way of providing services.
In the last couple of decades or so, the prime focus
of shared services model was to achieve the process and operational efficiency
– reduce costs through economies of scale. “Pick the early winners” and
focus on reducing the cost through continuous improvement and lean techniques
have been the go-to strategy for many shared services deployment. But is that
enough to sustain? Yes, would be my answer if I were to live in pre-2000 era.
But now, the answer is clear “no” because the shared services center is expected
to contribute to the strategy goals of the organisation.
Then, where is it heading? In the last few years,
truly mature shared services are planning to cash in on two things:
·
Providing Service
Excellence:
From my experience, there was always been a prevailing focus on how to move
from just process excellence to actually delivering service excellence.
As a consultant, this question that I come across regularly is how to
provide the best in class shared services deployment? The answer
lies in the design of the metrics for the shared services model and of course
metrics are not the only factor. Performance measurement is a vital part in the
implementation of the shared services model. By using the insights
provided by the metrics as an input to Business Process Management (BPM),
Organisation can really take the shared services to next level.
Let me give an example.
Once when I was working with a client and we were
examining the Time & Expense (T&E) handling process. At that
time, some of the metrics seem to project some bad numbers. By analyzing and
diving deep into the process, I realized that the consultants of the client
have increased their expense claim by multiple folds. The current process was
designed to provide the reimbursements of expenses to the consultants from the
local office instead of consultant’s home office. Later, to maintain its books,
the local office would charge the expense to the home office.
This process worked fine generally but it started to
show problems as the consultants had started to travel very frequently. After
we identified the problem, we resolved the problem
by re-engineering the T&E process. I was able to spot the
problem because of the metrics that were in place otherwise I would not be able
to solve the problem for my client. In essence, the metrics should provide the
right insights and should be revisited periodically to improve the service
offering.
·
Take advantage of new
technology advancement:
When it comes to technology, Cloud computing is the block buster kid in the
neighborhood. However, there is a grey cloud of thoughts hanging in everyone’s
mind. Can cloud add significant value-addition to a mature shared services
implementation? To me, cloud is another form of outsourcing.
In last 5 years or so, we have seen an increasing level of traditional
outsourcing in shared services implementation. But with the prevalent
adoption of cloud computing, it remains to be seen whether it will contribute
to the success of the shared services let alone increase the boundaries of
shared services model. Cloud is here to stay. Will it help in providing
the insights required to provide the service excellence is the question that
hangs in the minds of many many CEOs?
Unfortunately, we will have wait and watch but do visit my blog regularly to get latest updates about Shared Service Model.
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