Move the Work to the Expert — not the Expert to the Work
Globalisation and competition have led companies to implode their country / business unit organisations and consolidate the "back office" of these market-facing entities into shared services. The Hackett Group estimate that over 90% of the global 1000 firms have some form of shared services structure.
The long term benefits of exploiting wage differentials and – for higher value adding activities – new skills are clear. However the process of building shared services centres is fundamentally value-destroying. There is a real cost to the loss of knowledge and disruption that arises from the work transfer process. It is not unusual to lose over 95% of the existing skilled staff involved in delivering the service today, in transfer, and with them years of accumulated knowledge and relationships.
Is there a way to avoid this loss of knowledge and disruption — especially for higher value-adding services which focus on effectiveness (doing the right thing) as well as efficiency (doing things right)? And what about expert services where the skills may not exist anywhere other than high cost locations for expertise like tax and treasury – delivered from a so called Centre of Excellence?
Virtual shared services – where staff work to a common process from physically diverse locations – has long been talked about as a way of getting the best of both worlds. The panacea would be for experienced resources to deliver new and leading processes in a cohesive culture without the need for knowledge transfer and the dislocation arising from moving work. This would be especially true for services requiring high levels of expertise and customer service.
However the reality has failed to live up to the hype – until now. Virtual working requires robust infrastructure and workflow led "real time" processes to ensure the right person gets the right information at the right time. This is required in order for the virtual shared services organisation to deliver the same level of process improvement that can be achieved by co-location within a shared services centre.
These pre-conditions now exist to make virtual shared services a reality. This paper will set out how this is happening, lessons learned and the critical factors for success.
1. Challenge – to How do you continue to deliver value-add once you have moved your routine transactions into a shared services model?
The shared services model has evolved a long way since it was first developed in the Automotive industry in the 1980s. There is, however, a common thread that runs through the "story" of most shared service organisations.
Typically, organisations build duplicate services as they grow and evolve – left to their own devices, each new entity will build a distinct front and back office. Over time these develop different processes to achieve the same ends – and thus complexity.
The shared services model is driven intially by process simplification and standardisation. A key element has been to bring activity together in order to re-gain control over process variation. Location choices based on cost reduction, including labour arbitrage or favourable tax incentives, have built on the process benefits of collocation to create a compelling business case for shared services where scale exists. This Journey is set out in Diagram 1.
However the key challenges to the shared services model are:
1. Does the model only work at scale – i.e. where the benefits outweigh the one-off costs of change? What does this mean for small and medium size enterprises and locations?
2. In a world where shared services provision is fast becoming a commodity, the drive is to develop and to continue to deliver "best in class" service delivery.
Diagram 1 – Shared Services Journey – Where Next?
Businesses that have taken the decision to build shared services are often initially delighted when their KPIs demonstrate up to 20% or even 30% savings on costs, but once those savings are achieved, typically the CFO will aim to look at new ways to continue the trend of savings — either through improvements in productivity or revenue growth. Where businesses have had the foresight to look beyond the initial potential for saving and considered future development initiatives they will know that the value-add will be delivered through better processes, skills and technology.
But what does this mean? The most obvious areas where value can be added are where the shared services provider is able to build and replicate the continuity and strong customer relationships that had once been the responsibility of in-house teams and, in tandem, deliver strong innovation and continuous process improvement. This takes skill, experience and the authority to negotiate typically in roles that require up-selling, cash collection, complaint management and problem solving, working with the customer in some instances to achieve a tailored solution to a one-off problem situation. To be really effective, this cannot be done in isolation from the business.
So how can the impossible be made possible: driving value through developing skills and the range of services, while undertaking effective innovation and continuous improvement? Shared service providers know that they must constantly improve to continue to deliver value – but the search for ongoing innovation and continuous improvement isn’t a one-sided responsibility. The answer lies with both the business and the service providers, whether in-house or out-sourced, working together to achieve measureable and ongoing improvements as part of organised and collaborative partnership.
2. Virtual Working – a way to delivery better customer service?
While knowledge transfer and understanding of process can be gained through rigorous training, values and insights gained through experience, and problem-solving skills, can only be learned over time by the vast majority of workers. And in most cases, sound judgment comes through learning through mistakes. The challenge to business leaders is how to balance the need for rigorous cost management while delivering innovation and constant improvement, which requires higher skill sets and experienced workers. This could be an insoluble problem if the required skills and experience have to be sourced from the local shared service talent pool.
By developing a collaborative approach to the solution the answer could be to aim for the best of both worlds: retaining the skill and expertise locally and training to combine these with the capability for problem solving. Would this undermine the shared service model and at the same time effectively turn the clock back on cost savings? Not necessarily. One solution may be to move the work to the expert, not the expert to the work while retaining these employees as part of the shared service organisation.
Using the "bloom" in cloud-based technology as well as the myriad available communications solutions it is now possible to provide a result encompassing a virtual network of these services using a home-based office model. The home-based model would deploy existing in-house roles that may otherwise be transferred to the shared service organisation, harnessing the experience, skills and knowledge as well as exploiting the value of existing customer relationships while keeping costs under control. Hence:
- Retaining key worker knowledge
- Enabling rapid up- and down-scaling of resource to match demand trends
- Removing the need for expensive secondments or relocations
- Reducing the need for provision of office space – it has been estimated that up to 20% of the cost of local government services relates to premises
- Enabling flexible work patterns to extend the talent pool
The way to manage this would be to provide an end-to-end solution that allows your employees to work in their home environment, yet still have the same secure corporate access to all the technology, information, and communications that they need to perform their roles — just as if they were working in the office.
* You've got AA virtual friend...
Some of the advantages to the home workers are:
Based on article by Andy Lake email@example.com
Following a successful pilot, the NHS Direct’s Board has agreed to progress with its plans for home working, providing nurses with the opportunity to experience a new way of working.
The Board has agreed that NHS Direct will recruit 100 nurse home workers across the organisation by March 2011. Current staff will also be eligible for home working but this will be gradually rolled out over time.
The results of the pilot show that since the pilot started:
Significant benefits: The pilot home workers have claimed significant benefits, including the reduction in travelling time and an improved working environment, with quieter surroundings and no background noise allowing them to focus fully on the calls. Nurse advisors wanting to work extra hours have found it much easier as they can log-on at home for shorter periods which would not normally be worth travelling into a contact centre for.
One of the pilot home workers, says: "Working at home has certainly improved my work and home life. The fact that I don’t have to travel over an hour to work anymore means I’m much more relaxed when I start my shift. I can do everything I did in the contact centre from home, and from the patient’s perspective there’s no difference to the level of care they receive. I have the same access to support from my team leader, who visits regularly and is available over the phone. I also regularly talk to the other nurses working from home and, even though it’s often in a virtual capacity, there is still a great sense of team spirit."
A survey of 500 NHS Direct nurse advisors showed that 85% would be interested in undertaking their role at home on a permanent basis. Of these, 63% said they would be prepared to increase their hours if they worked at home, and 90% said they would be prepared to log on at busy times. The main reasons nurses gave for not wanting to work at home were isolation and loss of social interaction with work colleagues. These factors have not impacted the nurses undertaking the pilot.
The significance of success in the NHS is that it demonstrates that home working is just as attractive, and workable, for those working in the public sector as for those in the private sector.
3. Challenges — Virtual working is attractive but not always easy to implement
Increasingly, the benefits of including an element of home working in an overall de-centralised strategy are flicking the interest both at operational delivery and board-room level alike. However, going down this route is not as simple as dishing out laptops and telling managers to get on with it. Building trust in remote service delivery is hard work and needs clear thought and planning.
Careful change management is required to design and implement appropriate and robust routines to avoid marginalisation of home workers; to have inclusive procedures to ensure the business culture, health and safety and compliance with local legislation is maintained; to train those managing remote teams and to ensure home workers themselves know what is expected of them and what support is available if needed. Managing people is imperative if the costs are not to escalate delivering sub-optimal returns. A critical success factor will be ensuring timely and relevant communications between teams. With the vast majority of shared services staff being under 30 years of age it would make sense to make use of social networking tools as well as more traditional communication channels to enable businesses, teams and individuals to exchange information with speed and informality.
In addition, business leaders need to consider;
- how best to share knowledge on improvements and best practice between the business, the SCC and the home worker team;
- how to innovate, and more importantly cascade and embed those improvements – given that a global business will often have more than one SCC possibly not even on the same continent.
Here, critical problem-solving and continuous improvement skills must be harnessed requiring people to collaborate across functional and process boundaries to ensure successful innovation becomes the norm.
Including home workers in the "Continuous Improvement" (CI) process could be a smart way to use these more experienced and skilled team members. Using the technology and a bit of imagination to develop a tool kit that includes Skype, webinars, instant messenger and, of course, video conferencing, virtual working continuous improvement will provide a stylish solution that addressed the critical risk of loss of knowledge and disruption that arises from the work transfer process and provides a sound business case for the retention of the most valued existing skilled staff involved in delivering the services today.
Smart managers in shared services and beyond have realised that a home-based employee strategy actually removes complexity from the day-to-day management of their operations, rather than adding to it.
Homeworking is no longer seen as just an opportunity to reduce operating costs; it is now considered to be a competitive advantage within the markets that your organisation serves.
Management readiness and employee engagement are the true keys to the success of any homeworking strategy.
A successful homeworking strategy in any organisation is driven by the demands of the business — not the technology.
And a final word from Peter Hubbard; CEO of Cloudbase Systems Ltd: "Delivering a successful homeworking strategy does not require a heart and lung transplant for your operations; keep it simple, remove complexity and don't be deterred by those that tell you it can't be done...once you have home-based agents in your organisation you will never go back."