An effective governance structure can strengthen Shared Services in a number of different ways, including its alignment with company goals, resource prioritization, and focusing on the needs of its key stakeholders on a more comprehensive basis. The approach taken in regards to Shared Services governance can vary somewhat depending upon such factors as the overall corporate governance, the type of company culture, and the lifecycle stage of the Shared Services operation.
During a recent PeercastTM, a global company with over $20B in annual revenue shared their experiences in setting up their governance structure and how they used it to increase the contribution of Shared Services to the company as a whole. Operating a large Global Business Services organization with a combination of captive and 3rd party delivery centers located in the United States and India, as well as several in-market teams based in Europe and Australia, the company provides a wide variety of cross-functional services related to Finance, Human Resources, Corporate Services, and Safety & Security. Within the overall GBS, the structure is several support pillars called Governance & Enabling Services, Finance Management, Continuous Improvement, and Change Enablement.
To start the discussion regarding their GBS governance model, the featured company shared the key objectives in this area, which are as follows:
- Provide framework
- Identify clear responsibilities
- Provide oversight
- Review periodically & continue to evolve
GBS has implemented a governance operating model across all service delivery towers that will help ensure that it operates efficiently, meets service expectations, and delivers year-on-year value. Below is a description of each of the six key elements of that model:
- Strategy & Policy – Align GBS strategies and priorities to the overall company.
- Services & Engagement – Provide & maintain Service Catalogs, SLAs, statutory service agreements, and chargeback model with customers.
- Organization & Oversight – GBS’s organizational design and reporting structure are in place to deliver services. Committee structures are in place to provide appropriate oversight of the organization.
- Process & Controls – Appropriate processes implemented to engage with stakeholders, ensure appropriate internal controls, and establish the design and content of policy manuals & procedures.
- Performance & Vendor Management – Appropriate scorecards, measures, and metrics are in place to track performance internally & 3rd party contracts.
- Enabling Technology – Appropriate tools are used by GBS to automate/improve service delivery activities and make governance tasks efficient.
The formal governance structure for Global Business Services includes the GBS & Functional Governance Board, which sets the overall vision and success targets, GBS Customer & Process Councils, which represent customer needs and resolve issues, and the GBS Organization, which identifies functional/process standardization opportunities and shares operational performance results.
More details regarding the company’s governance structure can be accessed by Peeriosity members on the member website, including a PeercastTM recording and member presentation material.
iPollingTM Results Review
A recent Peeriosity poll developed using the iPollingTM technology provides some excellent insights regarding Shared Services governance. Looking at the results of the first of two questions, the poll looked at what type of governance structure was being utilized at companies to provide the strategic direction and vision for Shared Services. The Shared Services leader was the most popular response at 39%, followed by the CFO at 25% of the companies.
The second poll question then focused on the degree to which Corporate, Operations and Shared Services aligned to a common strategy and vision for the Shared Services organization. Most companies (66%), are either completely aligned (35%) or generally aligned (31%). An additional 23% of the surveyed companies feel that they are only somewhat aligned with Corporate and Operations, while 12% indicated that changes are currently taking place that require realignment.
Some of the poll comments from Peeriosity members include the following:
- Our Shared Services leader reports directly to our CFO – helping ensure complete alignment with Corporate.
- The Shared Services Leader sets the strategic direction based on the demands and current/future requests from customer groups.
- Our vision was initiated based on the overall global HR strategy, proposed by the HR Shared Services team and approved by the top team of HR.
- Combination of Company CFO and Transformation CFO.
- Shared Services strategy is completely embedded in Corporate strategy.
Ensuring that the proper Shared Services governance structure is in place is a critical success factor for any company. While the actual approach may vary between companies, the key is to ensure that the proper oversight is provided, along with strong communication channels formed between key stakeholders and Shared Services leadership.
What is the status at your company with respect to implementing an effective Shared Services governance structure? Is your current approach meeting your needs or is it time to take another look at this critical aspect of your operation?
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 iPollingTM.
Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers. Membership is for practitioners only, with no consultants or vendors permitted. To learn more about Peeriosity, click here.