Why "Sighted Four (04) Pistols" – aka Governance, Risk and Control – is Important in Shared Services

Very recently, the organization that we have outsourced our services to in India had to undergo an internal audit from our global audit team from Switzerland. The auditors, as part of the pre-work for the audit, called me up to ascertain the probable areas that would require their attention during their audit. I told them that the current weakness in the system is that the system does not have a ‘"Collaborative Operational Governance, Risk and Control" mechanism in place. The auditor asked me what the difference was between the current governance mechanism and the "Collaborative Operational Governance" mechanism that I was talking about. I promptly sent them a list of "Collaborative Operational Controls" that we had developed in our Services Organization. It listed controls from mundane activities that were required, to important statutory payments and report filings. So what is Collaborative Operational Governance? I always find a lot of similarities in the way that the Navy and a Shared Services operate, except for the missiles, guns, hierarchy and the uniforms! Back in the Navy, it was the duty of every Officer of the Day/Officer of the Watch to ensure that the Ship’s Log was filled in meticulously, without fail, every day/every watch. There were many controls in place to cover every activity of the warship. One of the controls that always intrigued me as a midshipman was that of counting the number of pistols kept in the Officer’s Wardroom. The Officer of the Day/ Watch had to count them and make an entry "Sighted pistols" in the ship’s log. So if we had four pistols in the wardroom the entry would be "Sighted Four (04) pistols". This control was really a no brainer. Anyone could do this. Actually the pistols were kept in a transparent locker, which meant anyone could check if they were all there. Moreover, the Officers Wardroom is accessible only to the officers, who are the most responsible people on the ship. So why should it be so important to count and log them every day? [eventpdf] Why? Because the consequences of not doing so meant that the pistols could be used for a mutiny onboard. Sometimes controls seem to be mundane and boring. However, the consequences of not recording these controls and not meticulously doing these checks may result in a situation that endangers the whole enterprise. Hence, these small operational no-brainer controls actually ensured that the warship was always ready for action, and not distracted by internal problems. Add collaboration, by way of sharing controls with the team, to this method of controls and you have a control mechanism that ensures that all checks, by every person, are centrally recorded and carried out to ensure that the organization focuses on its core activity, and does not struggle every time someone forgets to do something. Collaborative Operational Controls in Shared Services The Shared Services Organization, as we know, needs to function in a very definitive manner. Transactions are the order of the day and must be delivered to stakeholders both internal and external in a time bound manner. But with so many processes running, how do you ensure that they are delivered in a seamless manner? Collaborative Operational Controls includes everything that needs to be actioned by the teams in one place, with active links to the Knowledge Management portal, in order to trace the origin of the controls through a mere click of the button. It also displays previous actions that have been taken on these controls. A business continuity plan, such as which back-up resources are competent enough to perform these tasks, is also linked to these controls. Controls need to be recurrent in nature to ensure that new controls are auto-generated as soon as the active one is closed. Given that employees may be on emergency leave or other unforeseen events occur, controls offer a live feed to the current adherence for various processes that affect the organization’s delivery. India and other South East Asian countries seem to be a favorite destination of outsourcing. However, the biggest bane in these countries is the high turnaround rate of employees. The main reason for this is the high growth opportunity for the workforce where brilliant candidates are currently being offered insane increases to join a new company. Generally these brilliant candidates are in the middle of important projects or are playing a pivotal part in delivering services. Unless all actions they perform are clearly recorded in a central governance system, all this knowledge is lost, resulting in a dip in service delivery. Some of these actions are performed on a daily basis and may not be taken care of during a transition. Such actions actually end up re-inventing the whole wheel, with the new resources preparing their own to-do lists not to mention the high dip in service delivery ratio during this re-discovery. One of the mature companies that has used Collaborative Operational Controls actually ended up reducing more than 40% of their costs by ensuring that all controls were completed on time, irrespective of availability of resources, as leave planning was based on the controls that needed to be done. Shared Services Organizations need to implement such control mechanisms not just to provide stable operations but also to provide a platform for leaders and teams to manage their resources in a more efficient and systematic manner.

Why "Sighted Four (04) Pistols" – aka Governance, Risk and Control – is Important in Shared Services

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