Shared Services Optimisation: Working Smarter Not Harder
So you’ve implemented shared services in your organisation. Perhaps you’re asking yourself “what next?”
The answer is simple: Now it’s time to leverage your shared services to enjoy the best possible benefits from your new structure. In other words, you need to work smarter, not harder. And that means optimising.
But how do you go about doing that?
Well I’m glad you asked. Because below, I outline several ways you can optimise your shared services to get the best possible benefit from them.
Internal Controls Optimisation
While internal controls within your organisation are important, have you ever thought about what they’re costing you?
For example, in almost every business, all spending over a certain amount must go through an approval process. Similarly, leave requests must be approved by a particular person. However, this may not be an optimal situation.
That’s why, once you have centralised a function in shared services, you should ask the following three questions:
- What are the current business processes?
- Are the business processes common?
- Is there a better way to carry them out?
At Stennett Consulting, we’ve helped organisations significantly reduce their internal overhead costs by reviewing their internal business processes. Sometimes even a very simple change can generate value. For example, by simply analysing the dollar value, number of transactions, and quantities of transactions that require approval, then adjusting your delegation thresholds, you can potentially cut the administrative loads of internal compliance in half. Done correctly, this has a minimal (if any) impact on the quality of governance, but it significantly cuts the cost of these internal controls. It also frees up a lot of time within the organisations that can be spent in other, more profitable ways, allowing everyone involved to achieve more by working smarter, not harder.
Measure, Benchmark, Analyse
As is the case with optimising any area of your business, shared services optimisation thrives on data. The more data you have, the easier it is to identify areas for optimisation, and make informed and educated decisions about the changes that need to be made.
Generally speaking, you’ll want to gather as much of this data as possible via natural processes, without creating an impediment to getting the job done for your staff. One way to achieve this is to implement IT systems which streamline workflows, and also include features for tracking efficiency and workflow processes.
(In addition to providing you with lots of data, these can have the added benefit of streamlining existing processes before you’ve even made any further changes.)
Once you’ve collected sufficient data, analyse it. Look for areas where improvements could be made by simplifying or streamlining your processes. You can also use the data to introduce benchmarks for performance in different areas. Information is power, so use this information to guide your decisions and planning as you implement strategies to allow your staff to work smarter, not harder.
Process re-engineering can take you down two paths.
The most obvious one is about making existing processes as efficient as possible.
But there’s also another, less obvious, path when it comes to process re-engineering. And that is questioning whether existing processes need to exist at all.
When taking this second path, you need to approach the question of processes by considering what your final outcomes are. Are there other ways these can be delivered?
For example, rather than simply increasing efficiency in order to reduce the average cost per hour for onsite IT support, think first about the final outcome you need to deliver with this process. That outcome is IT support. The question you must ask, then, is: how else could you deliver it? In this example, you may decide that you could migrate some or all of your systems to a cloud-based platform with integrated support, or some other alternate way of delivering the outcome. This would eliminate the need for onsite support, allowing you to offer remote support, and thus significantly reduce the cost of IT support by reducing facility costs, rental costs, and overheads. It may also give your organisation greater surge capability by leveraging a common pool of non-dedicated resources.
In this scenario, you didn’t make changes to improve your process. You re-engineered the process entirely to lower the cost of delivering the outcome. (If that’s not working smarter, I don’t know what is!)
Outsourcing & Automation
Another way to optimise shared services is to identify tasks that could be outsourced to lower the cost of labour, or that can be automated through better technology and process design. This is an increasingly popular way for businesses to work smarter, allowing them to better utilise their local staff, and enjoy the other benefits that come from outsourcing and automation.
For example, in the finance space, many businesses have chosen to outsource different tasks to take advantage of the significant savings that come when a business uses qualified resources offshore. The market for skilled labour is now well and truly global, and there are a number of organisations that specialise in the administration of business process outsourcing (BPO).
At Stennett Consulting, we’ve also noticed a growing trend among more progressive large corporates for utilising freelance services to complete administration tasks. These corporates have achieved significant savings from doing so. Of course, this is not about just about saving money, but also about looking at how you can fund more growth and innovation by re-imagining your business model.
While not every task can be outsourced, reducing the cost of low value-add activities, thereby allowing your organisation to invest more money in high value-add activities, will always improve efficiency and profitability.
Dedicate Resources to Business Improvement
When there’s a lesson learnt, whose responsibility is it to actually make sure your organisation learns it and takes the appropriate action/s?
Time and again in organisations and businesses, “lessons learnt” are recorded, then forgotten – usually because there aren’t any resources allocated to implement changes to business processes.
To prevent this from happening, you need to set aside dedicated resources for business improvement. This is about having someone around to learn the lessons learnt, and drive the necessary changes to improve business as usual.
By making process improvement an internal, embedded function, you can take control of ongoing process reform, rather than relying solely on external consultants (yes that’s right, I’m actually advocating for NOT using consultants for everything). While there’s still a role in your organisation for an external consultant (ok, so maybe I am advocating a little for the consultants), if you’re focusing on quality internally, your consultant can focus on innovation projects, rather than delivering “business as usual” work. This means that both you and your consultant/s will be working smarter, not harder, for better results.
The “Second Step”
Successfully implementing shared services is only the first step in your organisation’s shared services journey. Optimisation is the second step. By implementing the five suggestions above, you’ll be well on your way to optimising your shared services so you can work smarter, not harder.
If you’ve set up shared services in your organisation or business: What’s one step you’ve taken to successfully optimise this function in your business?
For those who haven’t set up shared services: What’s the biggest obstacle stopping you?
Let me know in the comments below.
Who is Adam?
Adam Stennett is management consultant with a specialist interest in shared services. In addition to implementing shared services models, Adam has considerable experience in optimising shared services to help businesses and other organisations get the most out of their new investment.
If you’d like to learn more about working smarter and optimising shared services in your organisation, or you’d like to discuss specific optimisation strategies for your unique situation and circumstances, Adam can help. Send him a LinkedIn message today.
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