Transitioning decentralized processes to a Shared Services design can be challenging regardless of which functional areas are being consolidated. Even companies with prior consolidation experience can run into roadblocks that cause added complexity and delays, with each new project having its own unique twists and nuances, regardless of the quality of the project plan or the number of external consultants engaged.
Recently featured on a Peeriosity PeercastTM was a major food products company with extensive operations across the globe. In November 2013, this company began a global four-year efficiency and effectiveness program designed to fuel strategic growth, with Global Business Services (GBS) as a key part of the larger overall initiative. The company made a strategic decision to transition and transform select processes to a global business services model within four functional areas: Human Resources, IT, Finance, and Supply Chain. They chose these functions because they provided the greatest opportunity to align processes globally and offered initial cost savings. They considered GBS as a key part of delivering fuel for strategic growth for the company as a whole.
The overall GBS vision and purpose for the new organization were centered around the following five pillars:
- Customers – Create a seamless and satisfying internal and external customer experience
- Strong Company Culture – Build a service-oriented culture enabled by a motivated team that grows with us
- Continuous Process Improvement – Achieve and sustain best practices in effectiveness and efficiency in service delivery
- Innovative Outcomes – Create a mindset of innovation to drive business value
- Successful Financial Delivery – Create a culture of financial discipline and operational excellence
This company utilizes a GBS model that uses local, regional and global locations to perform end-to-end services, with the global center being located in the Philippines and regional Shared Services hubs in Eastern Europe, the United States, and Mexico, with some as captive centers and others fully outsourced.
During the PeercastTM, the featured company shared information about GBS priorities, the North America growth journey, their service excellence culture, facilities design, and employee engagement efforts during the transition. Also included was a detailed listing of lessons learned during the project, a few of which are as follows:
- Moving the organizational culture is heavy lifting and an ongoing journey
- Going too lean on resources too soon
- Establishing clear GBS/Shared Services career paths
- High-touch transactional processes complicated by customer-specific nuances
- Too aggressive with our future state organizational sizing timing
A poll was developed in conjunction with this PeercastTM, utilizing Peeriosity’s iPollingTM technology, which focused on the consolidation approach and standardization timing utilized by companies. Reviewing the results, the “Lift and Shift” approach was tied for most popular, with 28% of the companies favoring that methodology, with the phased approach by major process area also receiving 28% of the responses. 12% of the companies prefer a phased approach by business unit, while the phased approach by geographic location and transitioning in conjunction with a system implementation each received 8% of the responses.
The second poll question then looked at the preferred timing for standardization and process improvement when consolidating processes into Shared Services, with the majority of responses (88%) split between standardizing some processes prior to the consolidation (44%) and standardizing them after moving them to Shared Services (44%).
The following are some comments made by Peeriosity members related to this poll:
Consumer Products Member: If you have staffed your Shared Services organization with talent around process improvement, standardization, and harmonization, you will have the right talent to perform this work after the transition. On the other hand, it may be more difficult to influence any changes needed in upstream/downstream processes.
Computers & Electronics Member: We utilize a combination of listed approaches.
Non-Profit Member: In our case, with only a single location, we optimize the process after moving it to the Shared Services organization.
Healthcare, Pharmaceuticals, Biotech Member: On the standardization timing question, the answer could be “it depends!” Sometimes, if you are up against a deadline, you have to take work and processes that are not consistent or standardized. However, once you are standing up in your Shared Services environment, that’s when you can insist that a new service offering or a process that is to come into the Shared Services environment be supported by one policy and standardized process.
Consumer Products Member: We use a combination of a phased approach by major process area and a phased approach by business unit, in most cases.
Healthcare, Pharmaceuticals, Biotech Member: Some functions were lifted and shifted since all users were on the same system (e.g. payroll); others were moved as part of a new phased system install (e.g. A/R); where if we could standardize, we did. When we had a timeline we had to hit, we did as much as we could and then cleaned things up afterwards.
Consumer Products Member: Over the years, we have leveraged nearly all the approaches outlined to meet differing business needs. “Lift and Shift” is the favored approach when speed is needed.
How has your company learned from its experiences in consolidating and standardizing processes into a Shared Services environment? Has your approach in the past been effective and what would you do differently in future transitions?
Who are your peers and how are you collaborating with them?
“PeercastsTM” 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 MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees.
“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPolling.
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