Why Define The Four P’s?
A number of years ago, I was a participant in a strategic leadership programme, at one of the UK business schools, where we were provided a reasonably detailed overview of the inner workings of each of the primary operational and support functions of some global organisations.
This did not make us, non-specialists, experts in all the various business activities, but did provide sufficient understanding of each, to allow us contribute positively to cross functional discussions and debates, and by bringing our different lay perspectives to the table, enhancing overall decision making.
One of the functions covered in the programme was marketing, and I will always remember the means by which we were taught to remember the key marketing principles, namely the Four P’s, (Product, Place, Price and Promotion). This provided a deep enough understanding of the subject for us to add value in meetings with subject matter expert colleagues.
The two critical aspects of this learning method being:
- It is memorable: evidenced by the fact it has stuck with me for a number of years; and
- It is simple: both in concept and structure, I always appreciate things following the KISS (Keep It Short & Simple) principle.
As there is a growing drive to review the opportunities to expand the remit of Shared Services and Global Business Services to adopt more activities in end to end business processes, it would be an appropriate time to identify a similar, memorable and simple means by which Shared Services operational business leaders can provide an overview of the key Shared Services operational responsibilities to their executive colleagues, removing old engrained assumptions and bring them up to date on the Shared Services of today and tomorrow.
What Are The Four P’s?
An identification of the elements of the Shared Services 4P’s, to be used to enlighten executive colleagues on the critical elements of Shared Services, would be as follows:
- Partners
- People
- Process
- Performance
All are linked to a greater or lesser extent, depending on the business needs, however focussed leadership in all areas is fundamental to the success of the Shared Services function.
Partners
Historically, Shared Services partners represented the business entities, either group companies or defined business units for whom they provided their centralised support services (i.e. Finance, HR, IT, Master Data, Purchasing / Procurement, Legal, etc.), also the business entities for which the operational leadership colleagues are responsible.
Partners would also include customers, vendors and some government departments, where close liaison would be required to optimise processing capabilities and efficiencies. The partner concept has now been further expanded to include aspects such as the local and wider communities, and the environment, providing the Shared Services centres the requirement to accommodate a far wider stakeholder base than originally envisioned, significantly evidenced over the past 18 months or so of the global pandemic and changed working arrangements.
People
This is likely to be one of the more straightforward categories to explain, as colleagues will be doing many of exactly the same things for their team members, in areas such as appraisals, learning and development, mentoring, engagement activities, succession planning. However, there are other areas where leadership colleagues may not be focussed on quite so acutely as the Shared Services leadership, one being having the opportunity to develop high quality talent to embed in business operations, either as part of a career progression or as a learning activity to bring frontline business knowledge back to the centre, post assignment.
A further advance in the development of Shared Services talent, to be highlighted to colleagues brought up primarily on the labour arbitrage benefit to be derived from Shared Services centres, is the move towards establishing Centres of Excellence (CoE), which operate very much in tandem with the “Process”, P.
It is now expected talent provide a far higher adding of value to the organisation by moving them away from the standard data and transactional processing activities and into CoEs enabling them to provide more challenging and interesting deliverables in the analysis and interpretation of the information, processed and derived by other either automated or hybrid means.
Process
Process is a primary objective of defining the ‘four Ps’, as it is where reasoned proposals can be formulated to provide the Shared Services greater responsibilities over end to end business process activities, throughout the organisation, allowing the various business leaders to concentrate on their primary functional area without concerning themselves about establishing relevant information support, as there is a single source of the truth: the CoE.
This Nirvana state has been achieved very rarely, to date, but it is the grail of global Shared Services leaders and unless it is focussed on as the ultimate goal of not only the Shared Services leadership but also the executive group of the organisation as a whole, there is little chance it will ever be achieved.
With regard to the actual processes in place, this will vary significantly between organisations with such factors as location, maturity, scope (what services are shared), and model adopted (Captive, Outsourced, Hybrid) requiring to be taken into consideration. As identified in “People” above, processes are becoming more intelligently automated, particularly in transactional activities tending to be more standardised, rule based and repetitive in nature, allowing people to be deployed to more interesting adding of value roles.
No matter what processes are implemented, it is inappropriate to rest on ones’ laurels and continuous improvement. Process waste control systems require implementation, such as LEAN Six Sigma, which will be readily understood by many of the operations and supply chain leadership, helping allay some concerns around transferring some of the stages in their processes to Shared Services.
The use of other evolving technologies such as machine learning, predictive analytics and blockchain are further advancing the digitisation of Shared Services processing, facilitating the ability to have more complete, accurate and timely information available, when required by business operations.This advance in processing capabilities has provided the Shared Services leadership the opportunity to achieve many of their critical objectives.
Many years ago, in the 1990’s, during the early stages of Shared Services development, we knew what we wanted to achieve with the centres but were severely restricted by the lack of technological capabilities. This situation has been turned very much on its head, with there now being a plethora of technology solutions available to the functional leadership, so clarity of focus on Shared Services objectives must be maintained at all times. When appraising a new process technology solution presented to me, I always consider the following:
“Just because it can be done, doesn't mean it should be done.”
Therefore, how does this allow me to meet or exceed the overall objectives of the Shared Services function?
This approach should also be considered for adoption across the board, in organisations, when defining their respective digitisation strategies.
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Performance
The measurement and reporting of performance is a fundamental deliverable for shared service operations and can be split into two primary categories:
- Reporting for client entities
- Reporting for the facility
Leadership colleagues should be well aware of the agreements and issues relating to the first category, and how important it is for the client entity and the Shared Service facility to work in harmony with reference as to how and when the information being reported upon is made available, along with any agreed review commentary.
This is where confidence in the Shared Services ability to perform was previously established with the business process leadership, and is likely to provide the tipping point for agreements to transfer a wider range of operational process stages to the SSC.
No one size fits all, as far as internal reporting for shared service centres performance is concerned. However, well led centres should prepare a range of qualitative and quantitative, effectiveness and efficiency measures on a periodic basis to appraise actual performance against internal goals and, where possible, also against industry standards. This would usually be in the form of a Balanced Scorecard, ensuring focus is maintained on the most important performance aspects of the SSC, in addition surveys of customer satisfaction and talent engagement should be included in the scorecard results every six months or so, depending on overall company policy.
Conclusion
As stated at the outset this was not, nor could ever have been, designed to be a definitive statement of shared services activities, as there are far too many variations on the shared services theme out there.
It was focussed on ensuring there was an opportunity to think of shared services in a standard, simple and memorable manner, to connect with decision making colleagues who may have an out dated understanding of support services role and performance.
Using four of the core operational functional areas is important when reviewing the extent to which more end to end process should be the responsibility of shared services, most likely as part of an overall review of corporate digitisation.
It is also critical, if not fundamental, for there to be unified executive support for the expansion of shared services responsibilities, within an organisation, or such expansion is likely to fail, as is the case with many corporate change programmes lacking such high level support.
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