Transitioning work activities into a new service center is a step that has been completed by hundreds of companies and, with the exception of acquisition or divestiture events, typically occurs in abundance early in the lifecycle of Shared Services.  Closing a major regional service center is a significant event that isn’t often planned for, or even considered to be a possibility.  For regional centers that process a significant volume of a company’s transactions, the risk of any mistakes in transitioning work activities is greatly magnified.  And, where work activities were consolidated a decade or more ago, assembled project teams will lack direct experience in designing and implementing the required work steps to effectively carry out such an effort. 

Peeriosity’s Shared Services Leadership research area recently held a Peercast^TM discussion that featured a large global company that closed one of two large regional centers in China and transitioned work activities to other centers.  Training and key knowledge transfer occurred in three phases:

Phase 1:  Training of new hires in the receiving locations on the basics of processing

Phase 2:  Key position and specific process documentation in the location being closed

Phase 3:  Reverse job shadowing in the receiving location

To support the transition, about 20% of the staff in the location being closed were retained for three months past the transition date as “subject matter experts” to be available to help resolve any problems or issues.  About 8% of the staff took advantage of opportunities to relocate to other regional shared service center hubs.

Transition planning and implementation were accomplished entirely with existing company employees and without the support of external consultants or hired experts.  Key success factors identified include:

• Budgeting the transition costs early, so there weren’t surprises or issues with approvals
• Retaining an SME team for three months after the site was closed
• Offering relocations to key staff
• Extensive cross-training
• Clearly defined retention and completion bonuses

A supporting iPolling^TM question further explored the topic by asking member companies about their experiences with closing an existing location for Shared Services and, if they had experience, what the most significant challenges were for making the transition.   The results indicate an even split between companies that have experience in closing an existing location for Shared Services and those with no experience in closing an existing location. 

For the 50% of companies with experience, the biggest issue identified by 46% of the companies was the challenge of transitioning processes smoothly while minimizing the impact on the customer.  Retaining key staff was also an important challenge, cited as being the most important by 24% of respondents, with the potential of losing key knowledge or resources identified as being most important by 18% of companies.  Here are the details:

Below are a few of the comments from iPolling participants:

• There have been shutdowns for both reasons, a) consolidation to another shared service operation, and b) to a different type of organization.  In one instance I would say the customer impact and minimizing that was the top issue; however, the people part of the transition was most difficult to plan for and manage, in both cases.

• For the biggest challenge question, it is difficult to pick one answer, as each one is a significant risk factor.

• For us, the biggest challenge was minimizing the customer impact while trying to retain key talent and knowledge during the transition. These two were closely linked because retaining talent and knowledge was an important component of achieving our objective of minimizing customer impact.

• While it is important to clearly define work processes unless you retain key staff your risk of losing key knowledge goes up, and that takes time to recover from.

• When people are uncertain about the future, they will look for other opportunities. It is important to identify key resources early and put retainers in place to keep them.

Has your company ever shut down a mature Shared Services location?  If yes, what were your greatest challenges and key success factors? 

Who are your peers and how are you collaborating with them?

“Peercasts^TM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion.  Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content.  Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member.  Using Peeriosity’s integrated email system, Peer Mail^TM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees. 

 “iPolling^TM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to all respondents and their comments. Using Peeriosity’s integrated email system, Peer Mail^TM, members can easily communicate at any time with others who participated in iPolling.