SSON: What are the first steps for companies that are looking to move
toward a shared services or outsourcing framework?
Neil McEwen: A reality check: you have to determine what is doable or not.
Firstly, if it is a very decentralized organization with a small number of people
spread globally, particularly through acquisition, the complexity in making it work
is great. Therefore, you will need to make a business case to verify that an SSO
will deliver for you. In order to make the business case, you have to look at the
totality of the function, and not only shared services with some functional pieces:
it is the whole retained organization. You need to streamline and change roles
and put new operating models in place. Also, change the totality of the function.
A shared services is not a function of cost reduction, but a balance between cost
and quality of service. In the end, you have to look for a payback theory of 18
months.
NM: As roles and responsibilities shift, the teams most knowledgeable about
business processes and outsourcing often end up in different areas of a company
or leave the organization. Most of the retained staff are usually employees who
formerly engaged in administrative and transactional activities. These workers do
what is customary: setting up shadow systems of familiar functions. As a result,
companies will not generate the cost reduction or efficiency they expect because
of those duplication issues. People do not think fully about the impact on function
and change implication of the business. Everyone severely underestimates
change management and its underlying issues: education on self-service,
retention of staff with the right skill set, and number of people spearheading the
effort.
SSON: How do you design a new operational model that can offer the
best in class and high standards of service and efficiency while cutting
costs?
SSON: How can companies that have integrated a shared services model
foster a continuous culture of improvements?
SSON: How do you help corporations that have adopted the shared
services process improve communications and service delivery?
NM: The first thing in effecting change management is defining all the
components of the group: Identify who the stakeholders are, their positions,
future locations, the issues affecting them, and the level of communication they
would need to effectively operate. Also, involve workers (at all levels) in the
design phase by making them a part of the review team. Reorganize and
restructure aggressively to reduce your HR cost per employee down to a
reasonable benchmark.
NM: You have two choices. You can move toward a consolidated service business
unit: a separate entity for all G & A functions, which actually delivers financial, IT,
procurement, HR and legal. The other is to change operations from a top-tier
internal SSC to a profit center competing directly with outsourcing providers.
SSON: What are your predictions for the change management process
landscape?
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