Shared Services Start-Ups: Managing the People Impact
At Shared Services Week Europe 2007, I polled the delegates at our shared services start-up workshop on their biggest concerns and risks. A full 70 percent responded "people and change management issues" to both questions. It became clear that while their focus had been locations, processes and systems, they were realizing the critical importance of the people factor. (My rule of thumb is that shared services success is 80 percent about the people.)
A new shared services program is a massive change for any organization, as it moves activities from front-line units to one or more centers in different locations, often with a traumatic impact on many groups of people, and individuals, in the organization:
- Management, which will see its power base eroded
- Staff in the functions to be shared, as there will be job losses and changes
- Enterprise-wide employee-base, as they are likely "customers" of the shared processes, e.g., IT support, HR administration, payroll or travel expenses
This level of change can potentially result in enormous resistance, and unless handled properly, can derail the initiative. Thus, great attention must be paid to change management activities.
Managing the people aspect of a shared services transition starts with a communications plan that addresses the case for change and why the shared services program is right for the organization. Why should we change? What is the change? What will happen if we don’t change? What are the benefits? What investment is required? When will it happen? Proactively addressing these types of questions, even if some of the answers are not known up-front, helps ensure the rumor mill doesn’t take over. Further, people usually respond well to being treated honestly and openly, which helps guard against disruption.
The best way to draw up the case for change is to involve as many people in the organization as possible. At minimum, key stakeholders should be involved from the beginning. Once the case for change is developed, it needs to be sponsored at the highest possible level in the organization. It should then cascade down through the relevant reporting lines for affected employees, emphasizing key messages such as the drive toward functional transformation, direct cost savings and the freeing up of front-line resources.
When establishing a shared service organization, there is the opportunity to build a new service- and performance-focused culture. It’s important to involve existing staff via support of work-shadowing and knowledge transfer, and to ensure the new team recruited to work in the centers is equipped to "sell" shared services to the organization – in both words and deeds.
Challenging? Yes. But, if change issues and questions are handled up-front and the transition is well-managed, the shared services program will soon garner a good impression across the organization and the above "concern percentage" levels will decrease!
About the Author
Phil King (email@example.com) is Associate Partner and Shared Services Solution Leader for Atos Consulting (which is part of Atos Origin, an international technology services company.) He is a Fellow of the Chartered Institute of Management Accountants, a well-known speaker and presenter in the shared services community, and an author of many articles on shared services. From 1994-1997 he designed, implemented and ran a shared services center for North American financial operations for PHH Corporation in Baltimore, Maryland. During the past 11 years he has played leading roles on several global, European and U.K. shared services projects. He has also held three interim Shared Services Director roles, in London, Amsterdam and Budapest. Most recently, he has been involved in pan-European shared services feasibility, design and implementation, assessments of shared services options on a global scale including comparisons of in-sourcing versus outsourcing and near-shore versus offshore, as well as the development of shared services optimization strategies and leading shared services projects outside of finance – in customer services, procurement, IT and HR.
This article first appeared in SSON's May 2008 Start-Up Service Delivery eAlert. For information on how to register for this targeted e-Alert click here.