shared, services, challenges, ignored

Shared services concept exceeds expectations but challenges cannot be ignored

08 Sep 2003 | (Survey)

Communication, culture and change management are the three obstacles often overlooked when organisations set up a Shared Services Centre according to the results of the latest survey by Deloitte. The vast majority of respondents (95%) believe that their shared services implementations have been successful. But most underestimated the level of additional effort required to deal with ‘softer’ issues. People challenges, training and managing cultural change are all too often ignored at the set up stage.

Deloitte wanted to examine the evolution of Shared Services Centres in business today. 70 Shared Service leaders from seven major industries participated. The findings show that that Shared Services Centres are undoubtedly moving up the value chain. They are becoming an integral part of business rather than just another transactional process. According to the findings of the survey financial operations are the most frequently included in Shared Services operations, but 53% of respondents also included some supply chain processes.

"Shared Services allow decentralised organisations to increase focus and control of selected processes," says Peter Moller, European Shared Services Leader at Deloitte. "They deliver more value to business units by segregating and then consolidating non-core processes.

Organisations need to focus on the value Shared Services generate – for example through standardising and improving the quality of management information - rather than just the cost savings that may come as a result."

"All shared services leaders know that SLAs are a must – but few have implemented them successfully to date", comments Moller. "SLAs must form part of a continuous process linking the expectations of the shared services centre’s clients with delivery. They must also be used to ensure the clients of shared services centre understand their obligations in each of the business processes."

Good internal and external communication is vital and should not be underestimated. Respondents to Deloitte’s survey indicated that they use a variety of mechanisms to stay connected with their ‘customers’. 75% have implemented or are in the process of implementing service level agreements (SLAs). However of those that had SLAs in place only 26% consider them effective.

"Shared Services impacts everyone so it is essential that communication is consistent, timely and meaningful. Every team member must be involved in the delivery of the Shared Services ‘story’. Quick wins at the start are important to demonstrate success as is support from as many people as possible within the organisation at all levels," says Peter Moller.

The greatest people-related challenge cited by respondents to the survey was career progression. This is due to the typically flat Shared Service Centre organisational structure. While this was an issue highlighted by over 70% of respondents, the majority of respondents did not yet feel that it had an excessive impact on turnover of people.

Several organisations indicated that they intentionally distanced their shared services centre from corporate headquarters to enable a more independent operation. Average return on investment from shared services centres is projected as 20%, with an average payback period of three years.

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