Shared Services Model – Where is it heading towards?

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.

Change Management – Story diffusion techniques

Change, change & more change – The only constant thing in life. In my experience, I have been involved in quite a few change programmes. In order to induce a change into a system, be it small or large organisation, you need to have a solid value proposition and this should be communicated using a powerful story. So, what are the ingredients of such story?


In this regard, I glean over to borrow a framework from Everett M. Rogers to explain my take on introducing change. There are six parameters in total. 


1. Relative Advantage: 
The degree to which a change brings a value-addition to the existing organisation. The relative advantage can include both hard – increased revenues/profits, market share etc. and soft factors – prestige, convenience, brand image.


Many of the smarter planet concepts of IBM creates, or at least wants to create, an appeal to citizens of the world by just showcasing how information can help us take better decisions. 


2. Observability: 
A change should not only make a visible change to the way organisation functions but also provide a clear picture of how tangible the benefits are and how long does it take to realise the benefits? 


This is where lot of IT implementation has taken a hit in the two decades or so. Did they provide enough visible benefits or simply did live up to its hype? Probing question about the benefits realisation are a given. Therefore, it is essential that a change story should not only outline the benefits but also go the extra mile to explain how benefits will be measured. 

3. Triability: 
Can the change be introduced in a phased manner? Can we do a pilot of the change process to see the visible benefits that the “Observability” parameter promised? The answer to these questions partly lies on the business of the organisation. 


If the organisation has similar Strategic Business Units (SBU), then the change can be trialled in one and based on the success, other SBUs can adopt this change. 


4. Compatibility: 
This ingredient runs very closely with Triability factor. Fundamentally issue to answer here is - Compatibility of change with the organisation’s culture, value and business model. 


I was looking at a company, which recently launched a marketing campaign. The initial idea of the campaign was great however; it failed because the back office struggled to keep up. The marketing campaign was just like a swan gliding smoothly in a lake/pond but the back office was the function beneath the surface struggling to keep the float. 

5. Complexity: 
The story should be simple enough but at the same time convey enough for everyone to comprehend. Here is where I think there is a lot to learn and borrow from the movie industry. 


For instance, the movie “Inception” takes the simple idea of stealing ideas and planting ideas but at the same provides enough information to keep the audience.
                                                                                                      
                                                                                

6. Perceived Risk:
We always here about resistance to risk and that is because people perceive a change to have a negative impact on them - Be it their influence, power, self-image or the loss of job itself.


I was doing some work on “The Vodafone Way” programme. It was a massive transformation programme taken to reposition the service offering. During the initial phases of the change planning, there was an increased anxiety about the job security for a certain division of the organisation. Vodafone faced a challenge because it has to refresh part of its labour force. 




Therefore, it took two-step training scheme to cover people with obsolete skills. 
   • Identify and move employee to jobs  created as part of this transformation programme.
   • Develop a coaching plan to transition redundant workforce to jobs in the market. 
Although the risk still existed, Vodafone mitigated the risk by having a transition-training program in its change implementation plan. 


While formulating and packaging such a story, it is not necessary to have equal proportion of all these six parts. Adapt the story based on the business scenario and the target audience. Having said that, here is my recommendation: 


Top-Management: Cover all six parts and give a very balanced story.
Middle-Management: Provide a story that is easy to comprehend – less complex and it should be compatible to their existing skills and to an extent should feed the ego. 
Blue-collar worker: Perceived risk is of the key essence as the employees are scared about the job security.  


Upcoming related article: Stakeholder Engagement and Management