The Shared Service Centre… the key to our salvation or our downfall?

Lead us well or leave us be!!

Leadership, SSC, functions, centralisation, strategy and vision, what they all have in common is the “3P’s” on which all enterprises post core concept are built; which is People, Process and Profit.

So, with that in mind, the Shared Service Centre was born in an attempt to increase controls and operational expertise/effectiveness by region whilst reducing costs through standardised process design, controls compliance, cost synergies in resources by region and other benefits through the economies of scale a SSC can bring to a large regional or global organisation. 

A shared service model is a centralised model at inception and it is assumed that the key process designs creating the infrastructure will be cost effective, integrated and lean in construct. A SSC model also assumes returns based on auxiliary functions being centralised and expertise deepening through “shared experiences”. Sounding good?? It sure does to me, so where is the problem and what can we do about it to ensure our business is sustainable into the longer term whilst supporting our company’s short-term goals?

Leadership - Regional Impact of a multifunctional SSC can be devastating to a business if the SSC is poorly led at one or more levels. Impacts from poor leadership can range from service limitations to severe business disruption as a result of poor SSC leaders. Conversely, well-led SSC’s can enhance service offerings and unlock value in process efficiencies supporting business development in ‘entity territories’ that engage the SSC for key services and functions.

Risk Management – A well planned out SSC will have a plan should the building burn down, but in truth, many don’t. The risks involved in having key back office functions in one place are many including loss of access for staff to fulfil SSC service offerings or indeed the loss of staff themselves should the building become uninhabitable or destroyed. Even with a well-planned and rehearsed contingency plan, business disruption is inevitable.

Standardisation – A centralised model runs the risk of becoming overly bureaucratic often in an attempt to gain more visibility over what entities are doing and reporting on. What is necessary for one entity may be redundant for another. However, standardised protocols may create a bureaucratic attitude and culture that aids stable project management but runs the risk of dampening innovation.

I could go on, but the risks defined above merit deep thought and if you come up with scenario based solutions to these, you will have addressed major downside risks to a successful SSC operation.

To aid you in this, the following should be considered in any review:

• ü  What are the objectives of the SSC by function, by service, by entity? Is the company engaged in centralised processes or is it totally new as a concept? Are the change management structures in place to handle this change? Will the project unlock or produce value if successful? What are the risks in if partly successful or if it fails? Is scope comprehensively defined bearing the company culture in mind?
• ü  Are the services of the SSC clearly thought out, mapped out in the existing structures and considered in terms of value creation from their existing place in entities (or totally new) to a shared service centre environment?
• ü  What company culture exists and will it need to change to incorporate an SSC? What leadership practices are preferred in the organisation? Is there a detailed and effective selection process in place to deal with selection of leaders and subsequent employee workplace practices supporting the service level provision of the SSC?
• ü  What process management methodologies are being used and are they suitable in practice to fulfil the scope definition set out for the SSC?
• ü  What risk management and project management structures are inset with the SSC structure to deal with SSC change management projects along with strategic risk management issues?
• ü  Does the SSC have a senior level leader that has reporting relationship with the board (C-Suite)?
• ü  Is there a detailed plan balancing service level provision, continuity of service, work place practices and culture along with leadership in place to ensure the SSC is a functional unit that fits into the overall company culture and organisational setting, yet is flexible enough to enact change as a flagship unit of the company?

All good thoughts, which should factor into key planning sessions and the execution of outcomes therein. The road to heaven or hell for SSC, client entities, it employees and its customers will be determined by these outcomes which can create salvation in sustainability or herald its downfall in the weeks, months and years to follow.

Credits/Sources;

Pics:

www.glazette.com

www.paulhypepage.com

www.stellendalepark.co.za

www.ibm.com

www.govopps.co.uk

www.martin-smith.biz

           

Credits:

The back office, a single vision and the value proposition

Many value propositions synergised into one…

When thinking about the value proposition in business, we often confuse true value with just profitability, especially when thinking of the back office. This is fine if the business or proposition does not have sustainability in its design, which can be an appropriate omission in some industries, markets and territories. For the rest of us, sustainable business can be an attractive proposal, even radical when we think of how we could reposition our functions, structures and approach in the market place to make us more responsive, flexible and insightful in how we conduct business, why we conduct business and how we deliver our message of “who we are” to the customer in a seamless delivery with our goods and services. This concept transforms the value proposition of the back office formalising the interdependency between business development and structural consolidation of the business in growth, which has management, organisational and process management implications.

 So which saying is cooler...“Sell Sell Sell”, “Everybody is a Marketer” or “Cash Is King”??? For me, it’s “Cash is King” given my finance background, but in reality, all three are valid yet the customer is only interested in one answer to the question of “who we are”?  Are we the company that satisfies our customer’s needs on every level, in every area and on every approach? Do we deliver satisfaction and the same message managing expectations on a single strand that flows from initial approach to a 10-year account review?  Is our relationship with our customers evolutionary where we grow our business in partnership with our customers and our employees?

Once we fully determine who we are, we can then set about delivering our brand message to our customers that resonates as a “reason d’etre” for our employees, our customers and our management group. Synergy and integration lies at the centre of this wonderful picture, which brings us to how our overall performance as a company can translate into an effective sales message, which in turn lends credence to our sales approach revealing the value proposition in the eyes of the customer.

The key to this in integrated and synergistic approach is in my view lies within the process infrastructure of the business and how it binds the difference functions together in everything from planning to daily operations.

When we think of our function whether it be sales, production, finance, marketing, etc, it is easy to become lost in our functional interests making changing market demands difficult to respond to as a function and as company. Most can’t even entertain the concept of being flexible enough to reposition our organisations early to capitalise on identified market changes reaping the rewards of being one step closer to the customer and thus one step ahead of the competition.

 So, what to do??.... Chip sides of the customer and the organisation through Limit, Inhibit, Prevent, Control???? The response is indeed appropriate in some industries that has well defined inelastic products, are inflexibly vertical in their management structure and autocratic in nature. However, in companies that are in industries which have company cultures facilitating innovation and flexibility, the ability to “be as one” in a single message meeting customer needs is a thought intensive and demanding process. So where to be begin?

Start with the end in mind. Before the details can be worked out, the company needs to think of the desired value proposition, how much is left with suppliers, how much is retained in the company and how much is passed onto the customer through the provision of goods, services and ideas? Is the platform suitable in terms of process infrastructure such as lean six sigma, which delivers value and responsiveness in process infrastructure design, improving with time and changing market conditions?? Is the process platform ‘customer friendly’ delivering a balance of maximum returns with minimal effort on the customer’s part?

Understand your market(s), map your strategic plan and develop your process infrastructure to meet the requirements of your customers through hearing, seeing and feeling one penetrating ‘company message’ from all functions in the delivery of goods, services and ideas. When developing your strategic plans, its advisable to use big data analytics gleaned from your internal and external sources in identifying trends and insights relevant to your plans. Those who do so effectively are likely to gain competitive advantage. Once the process design creates and distributes value in service as much as in products to the customer where the single message is heard (we are…), then your outputs will feed positively into company practice, performance and culture setting the long term potential of the company’s value proposition into motion.

Be mindful of current process structures, organisational inhibitors, company culture and existing practices both good and bad.  The need to understand your current internal organisation is on par with the need to understand the external marketplace. Great process design will not be effective if context is not accounted for in any project execution. Project plans, which do not include scheduled step-by-step actionable tasks from the work breakdown structure, will not effectively forward the process infrastructure from its current state to its desired state. In some companies, effective process management can take years to get right, but as my dear old mother once said to me “the sooner you start, the sooner you will be finished!”  

Realism, not idealism is needed in planning change.  Be careful to appropriately plan your change initiative understanding its scope, impact and timing to deliver a comprehensive unified process infrastructure to the company as a platform with realistic cost estimations, risk management, timing calibrations and completeness in the project plan. Whilst important to not ‘pad’ your numbers and estimations, its also important to be able to stand over your stress tested plan, to sell it and not be pushed into compromising concessions by questioning and possibly unruly senior managers who should know better. After all, starting with the end in mind is enabling the business to reap a return for its investment through a value creating process platform that integrates the business as much as it does people and processes, by binding them together.

Being able to stand in front of a customer and say “we are…” is truly a wonderful feeling when we are part of something that is greater then the sum of our parts in a verifiable and unified way. The value proposition transcends monetization and creates intrinsic value in commitment, engagement, innovation and longevity in a company who would find itself bound and driven forward by its people as much as its management team and processes.

Source/Credits:

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#Process Management, #Capitalism, #Business, #Projects, #Organisation, #Organization, #Management, #Development, #Sustainable, #Controls, #SSC, #Integration, #Restructure