Members Ask SSON: How to Plan for a Launch

From time to time, we get questions from our membership regarding shared services practice or asking for advice on certain questions. I thought there would be value in sharing responses with the broader network, and encouraging readers to add their comments in the comment box at the bottom of the screen. Question: Planning & Launching I am working with a client who has just begun building the case for shared services. They are seeking information on the following topics: • List of typical shared service functions – industry view • Financial impact • Risks, potential mitigation • Suggested Approach/Process (by function, geography) • What questions need to be answered before we start? I would be grateful if you could offer some advice. Consultancy (France) Hi XX, You raise some great questions, and they are the kinds of questions all practitioners ask themselves as they face the challenge of planning for shared services. Our website contains a lot of material on this, and I would suggest that you reference that as a starting point, and use the search functionality for a number of the issues you have raised. There is unfortunately no simple answer. However, as luck would have it, we have this week been running an Open House series [online virtual sessions – all free] and covered "planning and launching shared services" on Monday October 6. All of the sessions should be available on demand by Friday. Please check www.sharedservicesopenhouse.com for the links. To address your questions specifically, however, the typical functions within Shared Services are, in order of "popularity", Finance and Accounting, HR, and Procurement. Any function whose processes are characterized by repetitive transactional type of activity would be a good fit for shared services delivery. These days we are also seeing more front facing functions like sales and marketing, as well as the more higher-value add processes connected with knowledge management, within a shared services model. In terms of financial impact, the cost savings – obviously offset against the expense of change management, setting up a new center, training and staffing, etc. etc. – are significant, but differ from organization to organization. There is generally an FTE savings associated with centralizing non-core business services [so you might go from 100 FTEs spread across 6 locations, for example, to 60 in one low cost location] which drives significant reductions in cost, certainly in year one. Thereafter, it is the standardization of processes that drives additional, and sustainable, value by reducing the exceptions that need to be managed, or eliminating breaks in the process. Standardization often means eliminating paper, driving "e"-enabled solutions, and implementing self-service where possible. That value is financial but is also felt in terms of faster service delivery and more positive customer experience. Thus better business process performance, which supports the business in its targets. There are risks in terms of setting up in-house shared services, though these tend to be associated with the actual process transfer and the weeks/months following that. The risk in this case may be translated into uneven service or a drop off in quality etc. as the new model stabilizes itself. There may also be risks associated with new technology experiencing teething issues, being underused, "clashing" with existing systems, or not optimized. Most practitioners will agree that it is easiest to approach a shared services implementation on a country by country, and function by function basis, although I have spoken to a number of consultants who vehemently deny this, saying once the governance is in place, the model defined and accepted, and the businesses on side, you may as well go at it multifunction and even two or three countries at a time. The number one challenge or issue addressed time and again is "how committed is your management to this new model"? Establishing shared services can be a very lonely journey. You will want IT on your side, as well as the CFO and/or CHRO. A mandate or visible support from that level will make an enormous difference and prevent months of backbreaking work resulting in setbacks. I hope this provides at least somewhat of a perspective for you. Good luck on your journey, and don’t forget to check our website daily for tips. Kind regards Barbara Hodge Online Editor, SSON [inlinead]

Members Ask SSON: How to Plan for a Launch

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