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Transforming Metrics for Shared Services

transforming metrics for shared services | PeeriosityIntroduction

Designing and implementing a robust performance measurement process in a key success factor for Shared Services or Global Business Services organizations.  Doing so correctly involves more than simply adhering to a balance scorecard approach, where you have defined measures for cost, quality, productivity, and customer satisfaction.  Performance measures need to be tailored to meet the needs of a diverse set of users.   When properly designed, metrics can become both performance guardrails, and incentives for managing growth and change while ensuring performance standards are achieved.

Company Experience

A PeercastTM discussion in Peeriosity’s Shared Services Leadership research area featured a large global company with $6B in annual revenue discussing their multi-year journey to transform their Shared Services metrics.  During this process they identified three key benefits to having the right measurement system in place including 1) improving business results, 2) aligning processes with business goals, and 3) increasing the likelihood that decisions are made based on data.

Beginning in 2017 the company started on a transformation journey for Shared Services that was designed to support business growth by implementing end-to-end processes that were consistent globally, as much as possible.  As part of this transformation, it was important that measurement systems and processes also were transformed to provide feedback that was appropriate for each level of the organization, including employees within Shared Services, Global Process Owners and related Governance Groups, Regional and Functional Leadership outside of Shared Services, and the company’s Senior Management Committee.  The goal of the transformation was to simplify reporting and reduce the number of metrics shared each level, so that each scorecard focused on the KPI’s that were critical to decision-making for each audience, with an increasing level of detail provided from Senior Management to the day-to-day metrics appropriate for use within Shared Services.  Here is a summary of the focus for each audience:

  • Metrics for Shared Services employees focused on operational activities at the team level to assist in day-to-day delivery and process improvement opportunities.
  • Metrics for Global Process Owners and Governance Groups focused on the health of end-to-end processes, and the health of individual processes within an end-to-end framework.
  • Metrics for Regional and Functional Leadership focused on key customer outcomes for each process.
  • Metrics for the Senior Management Committee focused on the overall performance of end-to-end processes and organizational health.

Tailored to each audience, scorecards were created for metrics in six measurement categories, designed to provide a holistic view of performance and progress in end-to-end processes, plus a measure of organizational health.  The six categories identified include:

  1. Talent Development – metric examples: employee turnover, employee engagement
  2. Customer Measures – metric examples: customer satisfaction, number of late payments
  3. Financial Measures – metric examples: DSO, DPO
  4. Efficiency Measures – metric examples: invoices per FTE, days to close
  5. Effectiveness Measures – metric examples: first pass match rates, discounts taken vs. available
  6. Process and Program Management Measures – metric examples: process deviations, hours saved

When selecting metrics, the goal was to simplify, focusing on a few key metrics that drive the most important outcomes.  The design of each metric started with a global view, followed by regional and local differences as needed, with the goal that metrics could be measured the same way globally as much as possible.  Also important in the selection process was to pick metrics that could be automated, with minimal manual data collection effort required.

Another important design element was to have all metrics tracked against a specific target, with historical performance reported.  Targets are set using “stretch” but achievable goals.

Also critical, is to have ongoing review and changes to the measurement process, at least annually, to ensure selected measures are relevant and useful for monitoring performance and guiding improvement efforts.

For details, Peeriosity members are encouraged to sign into the members’ area to view the complete presentation and listen to the recorded Peercast.

Closing Summary

Creating and administering a robust system of metrics isn’t a trivial exercise.  The best Shared Services / Global Business Services organizations have dedicated resources, often lead by someone with a title like “Performance Metrics Manager” or “Director of Performance Management”, to ensure the right level of focus and leadership is consistently applied to the performance measurement process.

Has your Shared Services / Global Business Services organization completed a transformation of your performance measurement program?  What are the categories of metrics that you use, and do your metrics have a cascading level of detail, to best tailor the metrics to your audience?

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

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“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.

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.

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