It's Not Always Oil: Why Services Become is a Career of Choice for Gulf Nationals
How to develop a Shared Services organization: rationale, change levers, and implementation
How the restructuring of traditional back office activities can develop a platform for new roles, new skills and progressive careers
When I introduce myself to an organization as an Advisor on Shared Services, I often get puzzled looks or a cold handshake in response. This is not surprising, since the term “Shared Services” is often viewed apprehensively by executives, managers and employees alike.
Deeper conversation soon reveals the reason – the concept is not fully understood. If you ask, “What is Shared Services”, you will get answers ranging from “consolidation of the back office” through to “a cost cutting exercise”. No wonder the concept is viewed as suspicious. To functional executives it sounds like losing control; to managers it’s another change and more hard work; and for employees, the possibility of losing their job!
Although implementing Shared Services is frequently described in such simple terms [see SSON’s “Jargon Buster”], however, it really is so much more. It’s true that moving to Shared Services is often used by organizations to lower the cost of business support provision, but Shared Services deliver many more benefits within an organization:
Figure1: Implementing a Shared Services model can deliver significant benefits
These benefits can be broadly classified as:
- Enhancing the quality and provision of internal business support through economies of scale, simplification, standardization, transparency in delivery and the use of leading-edge automation to increase efficiency.
- Delivered correctly, it can become a valued strategic support partner for an organization, helping bind a wide and diverse enterprise and provide a competitive advantage by supporting the growth agenda, whether organic or acquisitive, to drive the organization to the next level.
- It can also help the bottom line in more ways than one, producing not only reduced overhead costs, but providing a platform for a happier, more productive workforce through employee career development – and freeing up employees to spend more time on their core jobs.
Given these benefits, it’s not surprising that the move to implement Shared Services is starting to gather momentum in the Gulf region, for organizations that are becoming aware of this business model and its advantages. There is an additional benefit: Shared Services can directly support some of the objectives of the national governments in the region.
National Government Objectives
Over the last few years, each GCC government developed and released a series of action plans to overcome the challenges of the future due to the expected reduced national income from carbon-based exports. There are common objectives outlined in the various national development plans (see Figure 2), which, upon examination, align to the adoption of a Shared Services or outsourcing model. This applies particularly to the need to enhance the knowledge and potential of Gulf citizens and reduce the dependency on foreign workers.
Figure 2: Objectives in the various national plans across the GCC share common themes
Shared Services can help the organization and contribute to the national agenda. But even as its adoption gathers pace across the region in both the public and private sector, it is still not fully understood by managers and employees.
This prompts the question: “How can Shared Services attract and develop the best talent, experience and graduates within the Gulf Region and support the Governments’ objectives to enhance the knowledge and potential of their citizens?”
To answer this, we need to take a deeper look into the concept and mechanisms of Shared Services and outsourcing, and how the restructuring of traditional back office activities can develop a platform for new roles, new skills and progressive careers.
What, Exactly, is Shared Services?
First, let’s all get on the same page by understanding the concept of sourcing business support services – either internally, by developing Shared Services; using an external Business Process Outsource provider; or through a combination of the two.
From Small and Medium-sized to larger Corporates, all organizations have some form of Finance, HR and IT functionalities that support the day-to-day activities of a business. Many have a Procurement Department supporting purchasing activities and maybe Facilities Management to ensure that offices and workplace buildings are maintained and fit for purpose. In Financial Services, the back and middle office operations is where products are serviced and delivered to the end customers of a bank or insurance organization.
These are “business support” functions.
All have the potential for consolidation into a Shared Services model if the structure of the wider enterprise they serve meets certain criteria.
If an organization is multi-unit, comprised of different trading divisions or lines of business, or has diverse geographical coverage, each business unit needs the support of these functions to sell and deliver their products and services to their customers.
However, as an organization grows and expands, business support is often established locally, directly servicing a particular business unit or geographical area and thereby developing its own way of “doing things”.
Quite rightly, the focus of business unit management is on building and driving the new business activity and making it a success, with support functionality taking second place. Yes, it is needed, but providing it works it is not a primary focus. And often the needs of new business units or those in new countries are somehow perceived, by existing business support functions, as “different”. Their focus is on supporting existing entities.
As a result, business support gets fragmented and siloed across an enterprise, causing a headache for executives tasked with delivering those activities.
In a drive to provide efficient and effective business support to business units in such a structure, organizations often use the concept of Shared Services:
“A business support or operational service delivery model created by bringing together one or more back office functions or operations into a shared delivery unit used by multiple divisions of the same organization.”
Impact on Management and Workforce
Moving from a functional, siloed way of supporting the business to a dynamic Shared Services approach requires a step-change to be delivered operationally and organizationally, with new accountabilities and responsibilities for all those moving into the new structure. The most obvious change is in the way “back office” processing is undertaken.
Within every Shared Services Center is a hub where the day-to-day processing work is done. This is where the key changes are felt in moving from a back office, siloed structure to a consolidated, lean Shared Services operation. The impact of these changes makes a career in Shared Services attractive to employees and offers them much broader opportunities. How? The operations core in Shared Services is run in such a way that work that was normally undertaken in local functional silos – previously considered “specialized” – becomes standardized and is simplified via tools and techniques designed to enhance efficiency and make fluency and migration of staff easier. How staff are managed also changes, with leaders trained in new management methods that augment Subject Matter Experts' (SME) skills with a culture of customer centricity and continuous improvement.
Employees working within the operational processing core, delivering services to the internal customer, need to be taught and encouraged to take ownership and accountability for the work they do at all levels. They need to learn a new way of working that is focused on performance rather than doing the things that they have always done in the ways that they have always done it. This applies to both management and employees alike and requires a change in behavior to embrace this new culture. Again, at all levels.
Management must learn new skills to support this way of working and ensure they:
- Take ownership, accountability and responsibility for the work they lead, driving this concept down to employees
- Adopt, develop and manage best practices
- Drive continuous improvement in what they do and how they do it
- Dynamically deliver what the internal customers need with a customer-centric focus.
This requires managers to adopt a lean management system that covers:
- Structuring employees/teams under their control into efficient processing lines; and cross-skilling staff through appropriate training to ensure that fluctuations in volume or resources can be addressed accordingly
- Simplifying and standardizing the day-to-day work through standard operating procedures
- Tracking and measuring daily activities, working with teams to solve service delivery performance/issues quickly using tools like performance boards
- Ensuring daily volume anticipation and balancing of workload within (and across) teams
- Taking ownership and accountability of change to how work is performed; working with both the team and specialized resources to fine-tune process and associated systems
- Defining managed team development plans to ensure capacity building; and using a skills matrix to ensure team members skills are correctly enhanced for the individual and across the team generally (the cross-skill and upskill of managed resources)
Sounds dynamic? It is.
It may seem like it adds an additional layer of complexity to the management team, which has traditionally been defined by its subject matter expertise, but this approach leads to upskilling operational management capability.
Figure 3: Example of a typical career path in a Shared Services center operations hub
One of the most common complaints I hear from core process team leaders is that they cannot see a career path for themselves in Shared Services. They cling to the siloed functional mentality – “Once in finance, always in finance”. However, developing, mastering and leveraging these new skills offers an opportunity to move around the Shared Services Center (see Figure 3), building knowledge across different aspects of business support services, which in turn leads to broader opportunities both in Shared Services as well as the wider business organization. The intimate knowledge of business support services is so valuable to the business.
Interestingly, traditionally movement between functions has been limited but within Shared Services, such moves should be encouraged – not just internally but also in and out of the wider enterprise.
So, working in Shared Services operations is a truly an opportunity for all …
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