Our interviews with these innovators revealed some consistent leading practices at various stages of the shared services journey: - Gain leadership support/buy-in from politicians and senior management.
- Develop a strong shared services business case, strategy and plan.
- Create the shared services organization as a stand-alone entity.
- Create a strong governance structure that includes user departments and service-level agreements (SLAs).
- Manage the workforce issues.
- Ensure the right enabling capabilities are in place.
- Transform the internal culture.
- Measure performance.
A few of these key elements for shared service success are particularly relevant to Canada. Develop a strong shared services business case, strategy and plan Define a clear vision, business strategy and operating model. This advice is so fundamental as to seem a given; yet, we were struck by how many of our respondents told of problems during implementation that could be traced back to planning that was either incomplete or not detailed enough. Nearly all spoke of the importance of spending the necessary "up-front" time as an important lesson learned, and we think it bears repeating here. A successful shared services implementation requires a vision that is clear from the outset, extends far beyond initial deployment of the solution and is shared by stakeholders. Create the shared services organization as a stand-alone entity Most of the innovators created new, stand-alone shared services entities as part of their organizational transformation. Though sometimes "hosted" by another organization, the shared services organizations typically were set up as separate entities with their own management team and, in some cases, with their own accounts and balance sheet. Establishing the shared services organization as a separate entity is a key success factor: It separates the shared services centre from any negative connotations associated with existing business units or an organization's headquarters; it avoids conflicts of interest by providing clear purchaser-provider clarity; it combats lack of trust and concerns about service levels that are often expressed when a peer organization takes over services; it disengages the shared services organization from entrenched work paradigms and instills new values and a culture of operational excellence; and finally, it allows the shared services organization greater latitude during the design and implementation stage for establishing entirely new operational procedures that will in turn create higher value results. In contrast, if the shared service were purely managed within a business unit, it would raise the risk that management focus would be lost amid competing priorities. Create a strong governance structure that includes user departments and service-level agreements Sound governance is key to a successful shared services implementation, as it not only helps to manage the strategy for implementation and ongoing issues, but also defuses territorial issues and establishes accountability. Several of the organizations in our research found that a governance structure that included their client agencies was optimal, as it built and sustained buy-in. Manage the workforce issues Communicate and manage workforce issues throughout the journey. When shared services centers are established, they typically will draw staff from multiple constituent agencies, which creates a number of complications. The reorientation of roles and responsibilities and change in internal culture will require substantial staff training. Additionally, governments must address fears about job losses or relocations, loss of morale among employees who feel they are moving to a less-important organization and issues related to pay parity and changes in working conditions and job descriptions. The leaders stress the need for open and regular communication with staff during and after the transition. Staff needs to understand the vision and strategy and appreciate the new customer-focused mindset of the shared services entity. They need to understand the conditions of their new employment. And most of all, they require reassurance about their new roles and value. Listening to employees' concerns is the first step. Doing more with less, while desirable at the organizational level, may be resented at the individual employee level. It is critical to instill pride in the employees as they take on their new roles, and to acclimate them to a continuing process of change. What about the Technology and ERP? The executives we interviewed perceived technology as a key enabler for moving to shared services. In many cases, the right technology had enabled simplification, standardization and automation of previously complex, diverse, tedious and duplicated manual tasks. For example, the U.S. Defense Finance and Accounting Service consolidated 300 sites down to 27. Not surprisingly, executives there believe the successful move to shared services could not have happened without a solid technology platform. In other governments, reengineering of systems in the long term was regarded as vital to realize the full savings and efficiency potential of shared services. In this regard, a "shared vision" between the leadership in the shared services organization and the chief technology officer is a key success factor. Particularly important is a single enterprise resource planning (ERP) system, which was regarded as a key enabler for successful shared service implementation by a number of executives. Indeed, much of the initial cost savings included in business case for shared services come from the consolidation of ERP systems resulting in lower licensing and maintenance costs. Following the initial savings from consolidating ERP systems is a larger wave of process efficiency benefits. ERP is a fundamental element of shared services success. Without a solid ERP strategy many organizations may be challenged in their shared services initiative. As a matter of fact, organizations that are contemplating shared services that do not have a strategy or are working in multiple ERPs are starting with their hands tied. Despite the value of leading-edge technology, several interviewees grappled initially with legacy systems, either because of lack of funding for information technology upgrades or lack of authority or control over IT policy. The current economic and social environment is pushing governments to make transformational change. Governments are at a crossroads. The move to shared services is a journey that takes time, effort, focus and discipline. Many governments have a long way to go on that journey to realize the full potential of shared services. Those governments that recognize the dramatic change inherent in shared services—change far beyond technology deployment—have often found it vital to bring in outside help, either to assist through the transition or to partner with the government to deliver the shared services through a business process outsourcing arrangement. Their successes to date seem to make one point very clear: If you are not already thinking about moving to shared services for your organization, you probably should be. Next: Authors |