After the Go-live: Ten Focus Areas for Effective Shared Services Delivery
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1. The document outlines ten focus areas for driving performance in a shared service organization after go-live. This includes engaging in regular governance, monitoring compliance with service level agreements, standardizing and optimizing processes and technology, investing in training, and benchmarking performance. 2. Additional processes should continue to be evaluated for standardization and movement to the shared service organization to enhance efficiency. 3. Training is important, especially for offshore moves, to ensure employees understand commitments and business unit expectations as defined in governing documents.
After the Go-live: Ten Focus Areas for Effective Shared Services Delivery
- 1. Global Finance 360 AFTER THE GO-LIVE TEN FOCUS AREAS FOR EFFECTIVE SHARED SERVICE DELIVERY Author: Stephen G. Lynch Creating and deploying a Shared Service Organization is a major initiative that Ten areas of focus to requires substantial commitment from an organization. Yet the deployment of a drive performance in a Shared Service Organization is only the beginning of the journey to create a Shared Service high-performing service organization that partners with the Business Units and Organization: continuously creates value. True value creation occurs over time. As part of an on-going commitment, the following ten areas should receive management’s 1. Engage in regular attention to drive value creation in the Shared Service Organization. and consistent Engage in Regular and Consistent Governance governance 2. Monitor As part of the planning process for the Shared Service Organization, a compliance with governance structure should be created to ensure appropriate oversight of the the Service Level Organization. If the Shared Service Organization has multiple service centers Agreement globally, the governance program will guide the entire Organization as well as the individual centers. 3. Standardize and Governance committees should exist for the entire Shared Service Organization optimize and for the processes within the organization. The Steering Committee should processes be comprised of senior level executives with overall responsibility for the Shared 4. Standardize and Service Organization. They resolve issues that haven’t been resolved at lower optimize levels, provide continued funding of the organization, and guide the expansion of the Organization to incorporate additional functions that will drive valuation technology creation. 5. Invest in training Process councils should be created to give oversight to each major process 6. Benchmark to handled by the Shared Service Organization. For example, the Procure-to-Pay monitor process would receive oversight from executives in Procurement and Finance to ensure that global processes were as consistent and efficient as possible, to help performance resolve any conflicts that arose between organizational units, and to continue 7. Evaluate evaluating additional improvements that will drive efficiency while delivering value additional to the Business Units. processes to move to the Monitor Compliance with the Service Level Agreement Shared Service In every shared services project there are those in the organization, particularly Organization in the business units, that doubt the promised benefits will materialize and that the service center is truly capable of providing the level of service the business 8. Reevaluate the units enjoyed when they had their own support services. Don’t prove them right. captive vs. Once the service center goes live it’s time to hit the ground running and live up to outsourcing the promises made. This means living by the service level agreement and decision constantly monitoring the Center’s performance against the service level metrics. 9. Monitor opportunities for Standardize and Optimize Processes additional Processes should be standardized as they are transferred from the Business sourcing centers Units to the Shared Service Organization. However, even under the best of 10. Foster a culture of circumstances there will still be more work to do. Once the processes are continuous actually being serviced from the SSO, additional opportunities to standardize the improvement Global Finance 360 | Copyright 2010 | All Rights Reserved 1
- 2. processes will be identified. Additionally, opportunities to optimize the processes About Global Finance 360 to enhance service delivery and reduce costs through the elimination of non- Global Finance 360 covers the value added activities should also be identified. world of corporate finance and accounting and how these Standardize and Optimize Technology activities are impacted by globalization. Focus areas Just as processes are not completely standardized during the transfer to the include Finance Delivery Shared Service Organization, technology may sometimes not be standardized as Strategy, Shared Services, part of the move to Shared Services. While it’s true that a Shared Service Business Process Outsourcing, Organization is often created or enhanced as part of an ERP implementation or Process Improvement and upgrade, there are times when the business case for shifting resources Organizational Design. independent of a technology implementation makes sense. This is particularly Global Finance 360 is run by true when positions are moved to an offshore location. In that event, a plan to Steve Lynch. Mr. Lynch is a rationalize the disparate technology platforms is needed. Principal in the Finance Transformation practice of a In addition to the standardization of the core technology platforms, Shared global consulting company. He Service Centers often benefit by the implementation of bolt-on applications to is responsible for the marketing, enhance the effectiveness of the existing technology infrastructure. Examples sales and delivery of Finance include specialized applications for Collections or Reporting. Transformation services in North America and serves as a key Invest in Training liaison for his company’s global Finance practice. He brings more than 15 years of Training is one area that often gets short-changed as part of the Shared Services experience advising global process. Personnel are often left to learn on-the-job or to be taught by another companies on their service person in the department without the benefit of a standardized training delivery strategies and has curriculum. served over 60 clients in a variety of industries including A formal training program is always relevant, but particularly so when positions consumer products and are moved offshore and processes have been substantially transformed. In an industrial manufacturing, offshore move there is typically little to no continuity of personnel. Remember aerospace & defense, that the Shared Service Organization will be working to perform to the Service transportation, technology, Level Agreement and silence any remaining critics of the move to Shared entertainment and financial Services. It’s critical that employees understand not only their job but also the services. He has also served as commitments of the Shared Service Organization and the expectations of the a Controller in private industry Business Units as codified in the governing documents. Equally important is an and as an auditor in public ongoing commitment to training to bring new recruits up to speed and to keep accounting. existing employees’ skills fresh. Mr. Lynch is an active content contributor on the topics of Benchmark to Monitor Performance Finance Transformation and globalization and has presented When a Shared Service implementation is performed correctly, a benchmark at various forums including the exercise will have been completed as part of the current state discovery process. IQPC Shared Services & At that point in the transformation effort, baseline performance metrics are Outsourcing conference. He can established to understand the gap to high-performing companies and to help be found on the web at prioritize the roadmap for the journey to high performance. www.globalfinance360.com. A benchmarking exercise should be conducted on a regular basis after the go- Contact Information: live. A successful benchmarking program will have clearly defined metrics to Steve Lynch measure both the effectiveness of service delivery (i.e. cycle time, defect rates) and the efficiency of the processes (i.e. the cost and organizational structure Toll-free: +1.800.216.2512 required to deliver the services). Additionally, there must be systems to Office: +1.719.481.2599 automate the majority of the data collected. Otherwise, the demands and associated costs of collecting the information will soon outweigh the benefits of 1042 W. Baptist Road the benchmarking program and the program will eventually be dropped. Suite 194 Colorado Springs, CO 80921 [email protected] www.globalfinance360.com Global Finance 360 | Copyright 2010 | All Rights Reserved 2
- 3. Evaluate Additional Processes to Shift to the Shared Service About Global Finance 360 Organization Global Finance 360 covers the world of corporate finance and Once the Shared Service Organization is up and running, the governance accounting and how these committees responsible for oversight should regularly be engaged in identifying activities are impacted by additional processes and activities that could be moved into the Shared Service globalization. Focus areas Organization. There will also be opportunities to bring additional Business Units include Finance Delivery into the fold. The goal is to continuously evaluate new opportunities to leverage Strategy, Shared Services, the investment in Shared Services and to continue the value creation process. Business Process Outsourcing, Process Improvement and Organizational Design. Reevaluate the Captive vs. Outsourcing Decision Global Finance 360 is run by Despite the best efforts of the sourcing team to evaluate the overall delivery Steve Lynch. Mr. Lynch is a strategy in the captive vs. outsourcing decision, the reality is that conditions Principal in the Finance change and assumptions that were once thought reasonable are proved to be Transformation practice of a untrue. As part of the ongoing effort to maximize the effectiveness of the delivery global consulting company. He structure, the Finance Management team should periodically reevaluate the need is responsible for the marketing, to outsource a process that was previously handled in-house. However, the sales and delivery of Finance process works both ways. Sometimes an outsourcing relationship isn’t working Transformation services in North out as planned and it makes sense to Insource the process to provide better America and serves as a key service. liaison for his company’s global Finance practice. He brings more than 15 years of Monitor Opportunities for Additional Sourcing Centers experience advising global companies on their service In a world marked by globalization, new countries and cities are regularly delivery strategies and has developing the maturity necessary to be seriously considered as a service served over 60 clients in a delivery location. A balance is needed between the critical mass necessary to variety of industries including obtain economies of scale and the opportunity to move processes and activities consumer products and globally to refine the global delivery system and leverage lower labor rates. industrial manufacturing, Additionally, it can make sense to grow the support processes in geographies aerospace & defense, that require additional support, such as an expansion of operations in Asia or transportation, technology, Latin America. entertainment and financial services. He has also served as Foster a Culture of Continuous Improvement a Controller in private industry and as an auditor in public High-performing companies make a commitment to continuous improvement in accounting. every area of their operations. This improvement focus is centered on both the Mr. Lynch is an active content effectiveness of service delivery as well as the relentless pursuit of ever contributor on the topics of increasing efficiency. Senior management must be visible in their commitment to Finance Transformation and the process, not only in word but in deed. Funds must be allocated to the effort globalization and has presented and the Shared Service Organization’s management team must be held at various forums including the accountable for delivering on promised and potential benefits. Formal quality IQPC Shared Services & programs such as Six Sigma can play an important role continuous improvement. Outsourcing conference. He can be found on the web at Conclusion www.globalfinance360.com. By committing to these ten principles, a Shared Service Organization will be focused Contact Information: on delivering the value necessary to support strategy, optimize processes, reduce cost and drive innovate practices over the Shared Services lifecycle. Steve Lynch Toll-free: +1.800.216.2512 Office: +1.719.481.2599 1042 W. Baptist Road Suite 194 Colorado Springs, CO 80921 [email protected] www.globalfinance360.com Global Finance 360 | Copyright 2010 | All Rights Reserved 3