The A-Z for Setting Up a Multifunctional Shared Services
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This May, SSON was thrilled to host Shared Services & Outsourcing Week Europe once again, returning for its 24th edition. Located in sunny Portugal, the week was crammed with thought-provoking discussions, game-changing insights, and, perhaps most importantly, an overwhelming sense of community.
Day one of the event allowed delegates to get immediately stuck in with various workshops, focusing on topics such as Global Process Ownership, Automation, and AI. However, for those who are newer to their GBS journey, Sumit Mitra, the CEO of TESCO Business Solutions, had just the thing.
In his workshop The A-Z for Setting Up a Multifunctional Shared Services, Sumit provided a comprehensive guide of all the factors to consider for your organization’s transformative roadmap. So, let’s dive into a few of Sumit’s steps to success:
Cost
Unsurprisingly, cost is step one. Considering cost/efficiency remains the top strategic target within the industry, examining cost is an expected but critical factor to a successful shared service.
Sumit appointed cost savings to the “Value Creation Model” within a shared service, consisting of both direct and indirect savings. On the one hand, an organization’s direct cost efficiency will plateau or “dry out”, whereas the indirect value can be endless. With this in mind, organizations should not focus on direct cost avoidance and instead prioritize adding value through revenue uplift.
But how do you drive cost transformation? Sumit has clear advice:
- Build a delivery model to realize savings.
- Identify and consider risks.
- Generate a business case and return on investment.
- Bank the benefits and then keep improving.
Talent
Despite the continued focus on cost, delegates were invited to highlight key value drivers for organizations. Cost was of course highlighted as a driver, but was overshadowed by digital transformation, value, compliance, service management, economies of scale, and finally talent.
You are likely familiar with the current “war on talent”. Well, Sumit argues “talent had won the war.” Organizations continue to struggle with talent management, rising attrition, and changing demands within younger demographics. The future of talent, according to Sumit, is therefore “not about headcount, it is about skill count.”
Supported by data from McKinsey & Company, Sumit identified some key reasons for staff turnover:
- Under-valued by manager or wider organization.
- Limited opportunity for career advancement.
- Lack of flexibility with working models.
Sumit’s key piece of advice for the delegates is connection. He recommends ensuring talent is connected to the purpose of the organization, which increases a sense of belonging. Talent feeling a part of the wider, common goal can help with feelings of underappreciation, as the workforce understands the importance of their contribution.
Beyond this, connection can be further cultivated by building first-line manager capabilities. This is especially important for the emerging Gen Z workforce, as the younger generation’s changing perception of work leaves them feeling disconnected from the brand.
Sumit’s final piece of advice to establish a connection is by leveraging data analytics. Although it is widely known that utilizing analytics assists in monitoring efficiency, identifying bottlenecks, and generating actionable insights, Sumit sees the tool as “listening every day.” Data analytics within talent management are not only for the benefit of the organization but also for the workforce. Clear data allows the workforce to be heard, so instances of burnout, dissatisfaction, and inefficiency can be identified and dealt with effectively.
Business Partnership
Sumit then posed the question: who is your customer?
As a shared service, it can be easy to consider the enterprise as a customer, as you are aiming to add value to the business. This is the answer many delegates gave. But, Sumit highlighted the danger of this mindset, as it leaves the shared service as a subservient entity of the enterprise.
In reality, to truly add value, the enterprise should be considered a business partner/ stakeholder. Building a relationship on equal footing makes way for more collaborative, unified decision-making, that incites stakeholder advocacy.
Sumit listed a few ways to develop this dynamic, starting simply with performing basic operations well. Once your shared service is meeting SLA agreements effectively, you need to then manage the perception of these services. Even if a service is technically running well, if the organization has a poor experience with the service, they will be dissatisfied. Organizations should ask themselves, are our services easy to use by the organization?
If the answer is yes, the final step is to develop an emotional engagement with the enterprise. This sense of familiarity is key to achieving more authentic value adds, as the partnership is built on a foundation of knowledge and trust.
Overall, organizations should look to balance value with cost, commit to strong talent management, and advocate for a partnership with the wider enterprise. But, these are just three out of ten steps to success Sumit detailed throughout the session.
