Wake up! Opportunity is Knocking!
Recessionary times translate into nothing short of an incredible opportunity for shared services organizations. With corporations mirroring financial markets’ uncertainty, there is no time like the present for proving your shared services organization is a reliable partner in business. Economic and financial market uncertainty yields five key opportunities for your shared services organizations, including a chance to: 1) Improve operations, 2) Add value, 3) Re-brand and market yourself, 4) Expand scope, and 5) Raise your talent level.
Each of these opportunities can contribute to cutting costs and increasing your company’s bottom line.
1. Improve Operations
In order to enhance operations, your shared services organization should be in a mode
of continuous improvement from day one of operation and continue to be so throughout its maturity. The concept of continuous improvement is developed through the use of internal performance metrics that provide indicators for areas where improvement is needed. Additionally, methods such as process re-engineering and process improvement should be accelerated during times of economic recession to maximize efficiency and decrease costs. Examining strategic sourcing can uncover areas of operational improvement; for example, a focused approach to vendor management can consolidate spend and lower cost. Work which is not adding value to the organizations should be sought out and removed from the organization; resources should be redirected during difficult times to areas where they can add the most value.
2. Add Value
Adding value can be achieved by scrutinizing costs and leveraging service level agreements. To scrutinize costs, it is necessary to pay close attention to customer usage patterns in your shared services organization. By examining usage patterns, there may be opportunities to reduce or eliminate higher-cost services and drive customers to more efficient services. When analyzing costs, shared services leaders ought to be able to recognize if they are paying the right people the right amount of money for the right work. When leveraging your SLAs, you want to be sure they are scalable, they are utilized in the customer negotiation process, performance metrics are included, and they are used to eliminate low value or inefficient work.
3. Re-Brand and Market Yourself
It is crucial to be aggressive with your rebranding and marketing plan to establish shared services’ role in the company. Take time to re-examine your shared services organization value proposition to ensure it is aligned with your stakeholders and business needs and allows you to add value in the organization. For example, marketing your capabilities to manage compliance during recessionary times is favorable for areas such as FMLA compliance, travel and expense compliance, and contract compliance within vendor management. Branding should contain a marketing plan done by customer segment and by product and service in order to reaffirm knowledge of your market.
4. Expand Scope
Tough markets provide an opportunity for business units to identify ways of cutting costs; for this reason, it is important for the shared services organization to evaluate opportunities for scope expansion according to the market and business needs. Be aware of which services are needed that are not currently being provided, as well as who your potential customers are. Now is an opportune time to leverage shared services to serve additional business unit customers. Along with seeking out additional scope for your SSO, quality also should also be improved across your functions to aid in increasing expansion. Leadership and customers will more quickly transition additional work once quality has been proven.
5. Increase Talent Level
Talent should be assessed and the bar raised, since you will need to maximize the efficiency of your labor costs during tough economic times. Formal performance plans should be used in assessing talent and should lend an obvious understanding of performance levels. High performers are then rewarded accordingly, and poor performers are professionally and ethically weeded out, all with due diligence. New channels for shared services talent should be identified and tapped for resources. To elevate your level of talent, a succession plan must also be in place and renewed annually.
Opportunity for Shared Services
These times often call for companies to use costcutting techniques to generate a profit, which means shared services can have a major strategic impact. If efforts are focused on increasing operating profit through a reduction in shared services costs, this direct decrease in a fixed cost will have a dollar-for – dollar impact on the bottom line, resulting in larger profit gains for your organization.Wake up! Opportunity is knocking!