Whether organizations are transforming business processes by setting up captive, shared services centers, outsourcing or structuring some combination of both, the moves represent a major change for stakeholders, business lines, and end users.

Organizations tend to focus on leadership from the top as the critical success factor for implementation of global services. Yet they ignore the fact that visible endorsement cannot substitute for a retained team competent to juggle a myriad of factors when developing a solution, determining the pace of change, dealing with a various personnel issues, and managing a relationship that is based on often alien commercial principles.

They must have capabilities — the abilty to implement highly complex change programs as opposed to competencies — the vital subject matter or domain skills in business processes. Having competency is critical to designing the optimum solution, however, capabilities are crucial to developing, justifying, sourcing, implementing and managing services.

It doesn’t take much to justify the need for global services capability. With many options for business-process trans- formation, getting the decision right is not a back-of-the-envelope exercise. Adding to the complexity, the team must be able to sort through an array of providers to ascertain the right structure and cultural match. The cost of changing delivery strategy must be underwritten by a complex business case. The complexity of implementation means people issues cannot be fully relegated to the human resources department.

Ensuring change sticks by leading, engaging, listening and intervening by implementing appropriate response models, while pushing for harmonization and standardization, is not a task for neophytes. Developing a performance mentality that is transparent and promotes continuous improvement when process delivery is not in direct control takes skill and rigor. Comply with evolving regulatory requirements and manage business risk; it quickly becomes apparent that every aspect of the transformation requires capability.

A recent survey conducted by SharedXpertise provides strong evidence that transformation success correlates directly to the skill sets of internal resources. Almost 200 organizations, in the process of or attempting transformation, cite the capability of the current team as the biggest barrier to the successful implementation of any strategy. And, surprisingly, although external resources are available, respondents prefer to go to it alone, rather than rely on consultants. These data suggest that, in order to implement a new delivery model, building capability internally is of paramount importance. But which capabilities are critical to achieve sustainable benefit through global services delivery?

The Six Pack

Whether building or buying, a corporate team staffed with six critical capabilities— change, sourcing, people, performance, risk and governance — is key to transformation success. What does this “Six Pack” look like?

Change: Helping the organization understand the rationale for and embrace new ways of working. In our hardwired world, change management is often a “touchy-feely” veneer applied to make new operations, locations, processes, procedures and technologies palatable to end users. Yet a recent survey indicates that the inability to manage change is one of the greatest obstacles to the take up of global services. Gauging reactions to change, identifying the right amount of change which will deliver sustainable benefit and communicating it in such a way that all parties at the minimum understand — if not embrace — change is a critical capability that few organizations invest in.

Sourcing: Developing, underwriting and implementing the right service- delivery strategy. Many business process transformation teams run to the request for proposal process. But sourcing capability requires a broader set of skills than those necessary to host a beauty pageant. The process must start with a strategic view of the interplay between tools (build, buy or some combination), scope, functionality, benefit and cost. Going to market and contract should reflect the intent of a strategic services sourcing process, not getting the lowest cost deal. Services are continually “sourced” as business needs and performance changes, through change request and re-structuring processes. The savvy corporate team understands that sourcing capability is required throughout the entire lifecycle.

People: Identifying and resolving critical human resource issues such as labor relations, work shadowing, organizational alignment and re-skilling the retained team in order for the internal function to truly become more strategic. Human resources issues make or break services delivery. Yet the management of these challenges is often relegated to an overburdened HR department whose capabilities can only support the status quo. Changes in service delivery naturally result in personnel change that must be approached in deliberate phases — assessing legal implications of staff realignment, identifying the skills required in a new model, re-designing the organization to respond to business requirements, assuring retention during cutover. Managing the relationship between delivery and people is a core capability of the services team.

Performance: Ensuring a sustainable step change in operations through service-level management, measurement, implementation of process improvement techniques and reporting. One could hypothesize that 75% of people who express dissatisfaction with offshoring or outsourcing performance never developed a comprehensive baseline of existing costs, service levels, and customer-satisfaction indicators.

Therefore, measuring “step change” is purely a notional idea ... unless programmatic performance management capability is embedded in the team and the process.

Key to global services delivery is the capability to consistently amass, baseline, interpret and report on data, which dimensions existing conditions, tracks and influences the extent to which performance changes over time. Performance-management capability is critical from the development of a strong business case whose results can be measured, improved and managed, through to operations, through the application of continuous improvement techniques, underpinned by a process that continually and transparently assesses and reports.

Risk: Effectively navigating the issues presented by global regulation, data privacy, tax and accounting and corporate responsibility as business-architecture changes. Managing global services risk is not inviting in the internal auditors at infrequent intervals in order to comply with corporate policy. Every services element — location, policy, staff complement, ownership structure — has a risk element that must be anticipated and weighed as decisions are made.

The capable team defines risk very broadly. It has the ability to identify all derailers — seemingly small to substantial, singly and in aggregate — and develops an informed response model, orchestrating regulatory, compliance, tax and risk-management expertise in the corporation.

Governance: Sustaining the benefits of change though effective relationship and portfolio management. Managing offshoring and outsourcing is like a marriage. Understanding how to behave as a good customer of services is not a competence but an ability to ascertain when to be flexible, when to partner, and when to pound on a contract in order to get and sustain results. The capability to govern well requires an amalgam of relationship skills, business intelligence acumen, legal understanding, and scorecard management. And, as an organization increasing implements new service delivery models, the ability to govern a port- folio of services will become increasingly more important.

Why are the Six Pack Missing in Global Services Teams?

Most organizations approach global services design, development, sourcing and implementation as an IT implementation. Not a surprising plan of attack; experience with complex programs generally comes from the IT world. So it is seemingly rational — and easy — to hire people constituted in similar teams, armed with the same toolkits and experience. But adjust the focus from technology to process, and a Pandora’s box of challenges opens. Often a technology implementation is single-dimensional and invisible to the end user. Changes in process delivery mean mapping and altering upstream anddownstream processes, opening up policies and procedures for review, and imposing new ways of working on end users that involves a phone calloffshore rather than a water cooler conversation.

Outsourcing often is seen as a “flick of the switch” transformation, negating the need to develop internal capability. Providers often inadvertently and subliminally sell to the desire to transfer an underperforming process out of the corporation with little fuss in order to close a deal, forgetting that a smart client means success for all.

How to Gain Capability?

Good managers, regardless of functional expertise, have at least one or more of the Six Pack capabilities. Identifying pockets of in-house talent is the first step. Borrowing staff from other departments such as HR or audit is also helpful. These team members deliver the added benefit of helping translating corporate policy.

Seeking Out Veterans of Other Global Services Initiatives

Whether the programs were successful or not, these staff have deep insights into the ability to effect services change.

Using Consultants Wisely and Well

A good adviser brings extensive experience in similar deals or shared services initiatives, and can be positioned to build expertise in internal staff.

Train, Train, Train

External training in business process transformation is becoming more readily available. External training gives managers the opportunity to pick up deep skills, and learn from other transformation experiences, both good and bad.