One of the most frequent questions we hear from our members is this one:\u00a0 \u201cWhat are the lessons learned from other companies that will help us successfully implement our Shared Services\/GBS initiative?\u201d<\/p>\n
To answer this question, we pulled together a list of what we consider to be the 19 most important success factors to successfully implementing Shared Services or GBS.\u00a0 Here they are, in alphabetical order:<\/p>\n
Ultimately, the success of your GBS organization will be determined by the level of support that you earn from one key constituency \u2013 your internal business unit customers.<\/p>\n
Your dashboard of all-green cost & productivity metrics quickly loses its sparkle if customers indicate a level of dissatisfaction with your services.\u00a0 Your KPIs become \u201cwatermelon metrics\u201d \u2013 green on the outside, but red on the inside.<\/p>\n
You can avoid this outcome by embedding a customer-first mindset throughout your organization.\u00a0 Regularly ask yourself, and your customers, two questions:<\/p>\n
Even if you don\u2019t get the answers that you\u2019d like, simply opening this dialog will have a positive impact on your relationship with your customers.<\/p>\n
Organizations can be tempted to move forward with a GBS project without documenting the baseline of cost, productivity, and quality performance.\u00a0 \u201cAfter all\u201d they say, \u201cthat\u2019s the past and we\u2019re looking forward, not backward.\u00a0 Plus, it\u2019s time consuming to create all of that data.\u201d<\/p>\n
These organizations are setting themselves up for months, or years, of emotional arguments about whether the old model was better than the shared services model.<\/p>\n
It\u2019s also inevitable that shared services will make mistakes.\u00a0 When that happens, the knee-jerk reaction from business units is often \u201cthat never happened when we did this work ourselves.\u201d<\/p>\n
The only way to refute this argument is with data that shows how shared services performance compares with prior performance.\u00a0 And the only way to do that is by documenting the baseline of pre-shared services performance.<\/p>\n
Successfully implementing a shared services delivery model requires a significant change management effort.\u00a0 Change management plans almost always include a communication plan, but too often they don\u2019t include much else.<\/p>\n
In addition to a comprehensive communication plan, your change management plan should also address:<\/p>\n
– The vision of the future\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 – Executive involvement<\/p>\n
– KPIs & Metrics\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 – Quick wins<\/p>\n
– Stakeholder engagement\u00a0\u00a0\u00a0\u00a0 – Governance & RACI<\/p>\n
– Risks & associated mitigation<\/p>\n
The responsibility for change management goes beyond the change management team and extends to every member of the project team.<\/p>\n
Depending on the number of processes included and the geographic scope of the internal customers, GBS implementation projects can take between 9 and 24 months to complete.<\/p>\n
The pace is very fast, and there are likely dozens of significant milestones to complete before the service center is fully operational.<\/p>\n
As you complete interim milestones, you might be tempted to \u201ctick the box\u201d and move on to the next item on your project plan.<\/p>\n
That\u2019s a mistake.\u00a0 As you make progress, don\u2019t forget to celebrate incremental success along the way.\u00a0 Your team is working long and hard, and a team lunch (or equivalent) will go a long way toward keeping them engaged and motivated.\u00a0<\/strong><\/p>\n The most common question that you\u2019ll be asked during a shared services project is this one: Why are we doing this?<\/em><\/p>\n If different team members and sponsors have different answers to this question, the organization will be confused and less likely to accept that this change is both positive and inevitable.\u00a0 You\u2019re going to need a clear and concise answer to this question that everyone on the team understands and believes in.<\/p>\n You\u2019ll also need to repeat the message regularly.\u00a0 The Marketing Rule of 7 suggests that people need to hear a message about 7 times before it actually begins to sink in.<\/p>\n This means that by the time you\u2019re getting tired of repeating the same message, your stakeholders are just beginning to understand what you\u2019re talking about.<\/p>\n Decentralized finance teams are expensive, but they do offer this advantage: Physical proximity can make up for inefficient processes.\u00a0 The AP processor can go upstairs to the purchasing department to clear up questions about purchase orders.\u00a0 The credit analyst can go down the hall and talk to the sales rep about an incomplete credit application.<\/p>\n When GBS employees are no longer co-located with business units, it\u2019s critical that both groups understand their roles and responsibilities.\u00a0 For example, if both procurement and GBS think the other group is responsible for new vendor set up, problems are inevitable.<\/p>\n To prevent problems, you\u2019ll need to identify each step in the end-to-end process and make sure that responsibility for completing that step is clearly understood and agreed to by both the business unit and the shared services team.<\/p>\n Service level agreements are often used to document roles & responsibilities at the activity level, as well as to identify the KPIs that will be reported to monitor compliance with the SLA.<\/p>\n Developing a mission, vision, and strategy for your new shared services organization is critical for three reasons:<\/p>\n Without a defined strategy, some of your internal customers might expect you to focus only on labor arbitrage and cost reduction while others hope that you\u2019ll provide services more like an internal consulting group.<\/p>\n Some stakeholders may expect you to rapidly expand your service offering while others expect you to stay in your lane \u2013 whatever that is.<\/p>\n A strategic plan allows you, your customers, and your team to have a common understanding of your organization, and where you are headed.<\/p>\n \u201dMy biggest problem is figuring out how to spend all of the money in my budget\u201d \u2013 said no GBS leader, ever.\u00a0 For more than three decades, shared services leaders have continually been asked to do more, with less.<\/p>\n Embedding a continuous improvement mindset throughout the organization is critical if you\u2019re going to achieve the cost and productivity goals that are certain to come your way.<\/p>\n There are five key steps to implementing a successful CI program in your organization:<\/p>\n To be successful, you\u2019ll need more than just support<\/em> from the top \u2013 you\u2019ll need active involvement <\/em>from the project sponsor(s).\u00a0 Prior to launching the project, set expectations with the sponsor that they will:<\/p>\n Attempting to implement a shared services model without active involvement from the sponsor is likely to result in an unsuccessful outcome and a frustrated project team.<\/p>\n Despite all of your best intentions and detailed plans, there will be times when problems arise.\u00a0 Recognize that there has never been a perfect GBS implementation, and there never will be.<\/p>\n One strategy to reduce the impact of problems is to front-load your implementation with business unit customers who are supportive of the GBS model and likely to work with you to resolve problems, rather than broadly advertise any problems that arise.<\/p>\n No matter the mindset of the impacted customer(s), you\u2019ll need to:<\/p>\n The first phase of a GBS project is usually a feasibility analysis that lasts for 10-12 weeks.\u00a0 Prior to an official decision to proceed, the team is made up of project resources and there is little need to think about the operational leadership team.<\/p>\n Once the project is approved for implementation, it\u2019s time to recruit and appoint the operational leadership team.<\/p>\n The project team remains responsible for finalizing process designs and migrating the work to GBS.\u00a0 Having the operational team on board early allows for a smooth handoff and prevents issues that may arise if an operational manager disagrees with elements of the to-be process.<\/p>\n Ideally, one or more members of the project team will accept operational roles in the new shared services organization.<\/p>\n Not surprisingly, the initial focus of the GBS organization is on delivering reliable services to internal customers, including:<\/p>\n Once these processes are stabilized, the focus broadens to include additional topics such as continuous improvement, customer relationship management, and training.<\/p>\n Ideally, these roles would be filled by full-time associates, but budget constraints may prevent that, especially in the early years.<\/p>\n Even if it means adding responsibilities to existing team members, don\u2019t forget to include responsibilities for improving processes, improving customer relationships, and training & developing associates.<\/p>\n Many GBS organizations charge their internal customers for the services that they provide.\u00a0 Many more do not, and both approaches have their benefits and concerns.<\/p>\n If you elect to charge for services, adopt a methodology that enables you to have meaningful conversations with your customers.\u00a0 If you charge or allocate costs to customers based on revenue or headcount, you will have a difficult time addressing how your customers might partner with you to reduce their charge.<\/p>\n A better methodology allows your customers to reduce their cost by adopting best practices that benefit both you and them.\u00a0 Some simple examples include:<\/p>\n Most organizations establish an initial set of KPIs and metrics that are intended to show compliance with the overall charter for GBS as well as improvement over the pre-GBS model.<\/p>\n These are generally volume, cost, or productivity metrics such as:<\/p>\n While these metrics are necessary in order to gain the confidence of business unit customers, recognize that they have a very short shelf life.<\/p>\n In the early years, significant improvement over baseline performance can and should be celebrated.\u00a0 Eventually, internal customers become less concerned with cost and productivity and more concerned with the value <\/em>that you bring to the organization.\u00a0 It is never too early to begin thinking about how you will capture and quantify this, even if you\u2019re not ready to include it as an official KPI.<\/p>\n After a year of planning, the doors are open and the center is operational.\u00a0 At this point, you\u2019ll likely have a phased plan to migrate work from multiple business units \/ countries to the GBS.<\/p>\n As you develop your staffing and hiring plan, recognize the benefits of intentionally over-staffing the organization ahead of demand.\u00a0 Admittedly, this may result in additional cost for a short time.<\/p>\n Conversely, consider the potential damage caused by being caught short-staffed:<\/p>\n Hiring ahead of demand might be more expensive, but it can prevent a number of negative outcomes from happening.<\/p>\n Post migration, the shared services employees may be thousands of miles and multiple time zones away from their new colleagues.\u00a0 Drop-in visits to ask questions aren\u2019t possible, and even phone calls may be difficult.<\/p>\n The best way to ensure that the new employees have the ability to successfully complete their work is to provide accurate and complete process documentation.<\/p>\n Prior to migration, the incumbents (or technical writers) must thoroughly document the processes complete with screen shots, written narratives, and any supporting documentation required to complete each task.<\/p>\n Even if in-person work shadowing is part of the transition process, documentation is still critical.\u00a0 After all, there may be unexpected turnover of new employees after the shared services center becomes operational.<\/p>\n Review the process documentation and ask yourself, \u201cIf I had nothing but this material, could I do the job?\u201d<\/p>\n You\u2019re going to need resources who are subject matter experts in purchase-to-pay, record-to-report, and order-to-cash.\u00a0 You\u2019re going to need team members who are strong in project management, IT, HR, and change management.\u00a0 You\u2019re going to need SME time from resources in each business unit and every major country where you operate.<\/p>\n As you identify candidates for these roles, it\u2019s likely that some managers will be reluctant to offer their best people.<\/p>\n Remember, you are developing the delivery model for the next decade, or longer.\u00a0 Do you really want to do that without a team of A-players?\u00a0 Enlist the involvement of your executive sponsor, if necessary, to ensure that you have the best resources to support the project.<\/p>\n Early iterations of shared services models focused heavily on cost reduction.\u00a0 One source of cost reduction came from reengineering processes to eliminate unnecessary steps.\u00a0 Another source came from labor arbitrage \u2013 moving work from high cost locations to low cost locations.<\/p>\n Chasing labor arbitrage is an expensive effort that has an ever-shorter shelf life.\u00a0 Years ago, highly desirable locations such as Prague, Barcelona, and Dublin quickly lost their appeal as dozens or hundreds of companies opened centers in those cities.\u00a0 Today, the same thing is happening in cities such as Panama City, Budapest, and Bucharest.<\/p>\n Robotic Process Automation and Artificial Intelligence software have enabled companies to fully automate many routine, repetitive, and rules-based activities, eliminating the need to find the next low-cost labor location.<\/p>\n During the course of a GBS implementation, you\u2019ll need hundreds of decisions to be made.\u00a0 If you have to wait days, or weeks, for those decisions, your project timeline will be in jeopardy very quickly.<\/p>\n You can prevent this by developing a clear governance model at the outset of the project.<\/p>\n Which types of decisions are you able to make as a project team?\u00a0 Which types require your sponsor\u2019s approval?\u00a0 Which ones require the consent of the executive steering committee?<\/p>\n You can reduce the need for steering committee involvement in too many decisions by empowering the project team to make all decisions that are operational (versus strategic) in nature.<\/p>\n Plan your calendar of steering committee meetings to coincide with the major project decision points and milestones.\u00a0 You don\u2019t want to finish your location analysis and have to wait weeks to present your recommendations for approval.<\/p>\n <\/span><\/span><\/span><\/p>","protected":false},"excerpt":{"rendered":" One of the most frequent questions we hear from our members is this one:\u00a0 \u201cWhat are the lessons learned from other companies that will help us successfully implement our Shared Services\/GBS initiative?\u201d To answer this question, we pulled together a list of what we consider to be the 19 most important success factors to successfully […]<\/p>\n <\/span><\/span><\/span><\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[8],"tags":[],"acf":[],"yoast_head":"\n\n
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