Three common shared service challenges and potential remedies

There is no secret sauce to stabilising and optimising a shared service centre.  It typically involves a lot of hard graft, leadership, focus on process and technology optimisation and the development of an effective team culture.
Working with a range of clients in Australia and beyond, I’ve seen three challenges that have held many shared services teams back.  Each of these, along with some suggested steps to begin remediation are outlined below.

1) Overtime levels higher than expected post transition:
Often post transition, the shared service struggles to execute the process to the same level of efficiency as the business team who previously delivered it.  During the initial month and a half post transition this is acceptable – however, beyond that period it becomes a priority to resolve to:
  • Increase process effiiciency
  • Minimise overtime and  project benefit leakage
  • Ensure that shared service teams aren’t burnt out
  • Maintain customer satisfaction.
If your overtime levels are running over 5-8% alarm bells should be ringing…
Suggested potential remedies include:
  • Review staffing levels; have you got the right level of resource to match against the actual volumes of activity passed over from the business?
  • Pro-actively quarantine legacy issues/ backlogs.  You want to demark which activities are business as usual processing and which are not and make this clear to your customerss.  Establish backlog ‘clearance’ plans, treat these as a project and if necessary seek investment to remedy.
  • Review process metrics carefully and identify root causes of delay, waste and inefficiency. Check if processes and all exceptions have been documented appropriately during transition, if necessary update work instructions and train operatives accordingly.
  • Above all, be transparent with your customer.   Highlight volumes versus baseline, backlogs, process efficiency and effectiveness metrics, root cause analysis and agent effectiveness if necessary on an individual basis.  Develop and work on a plan to address and resolve together.

 


2) Attrition levels are too high impacting effectiveness and efficient

A level of attrition in a shared service centre is not necessarily a bad thing.  Managed attrition provides avenues to enable continuous productivity improvement benefits to be realised without having to pay out redundancies.   In addition, some movement of shared service personnel to roles within customer business units is actually one of the biggest complements for a shared service team, and furthers business relationships.
Unfortunately when attrition rates are creeping over 10-15%, there is a huge cost to the business – in terms of retraining, business knowledge leakage, unsettled teams, morale and culture.  It also can be a huge management distraction.
Suggested potential remedies:
  • Try to assess root cause:  Ensure your exit interviews and employee satisfaction survey’s are capturing reasons – investigate and understand these.  Try to isolate the issue, is attrition prevalent across every team, grade or type of role? or is there something in a segment of your organisation that needs to be addressed e.g. a leader, nature of a role, workload etc.  Once identified put an action plan in place.
  • Look at the type of people you are hiring, are they the right fit for the role?  As one of my clients found, they were hiring accounts payable clerks who’d just arrived in Australia – what transpired is that once they had a job for six months, they used this as a stepping stone to an assistant accountant role in other businesses.  Think carefully about your requirements for each role.
  • Put yourself in their shoes? Assess the centre, culture, management and job opportunities through their eyes – would you want to work there in their role?  What would get you down?  Once you’ve done an honest assessment, look to optimise.
  • Seriously consider the non-monetary incentives for your team members.  Could they be rewarded in different ways? do they receive ongoing training? Is there a career path for them?  Do they know how their role/responsibilities will look in 1 or 2 years time? Are they respected by their customers and peers? Consider what you can do to make a difference to their careers.

 


 

3) Roles and accountabilities are unclear, leading to confusion or finger pointing

Often, roles and accountabilities between the shared service and business team become blurred.  Scope creeps and initial service level agreements and responsibility frameworks become outdated.  This can lead to a number of challenges, including:
  • Inefficient hand off of work between business and shared services (often involving multiple phone/email interventions to resolve)
  • Mis-aligned expectations – making it hard for the shared service team to ‘win’ in the customer’s eyes
  • Poor shared service team morale as they constantly try to ‘paper over’ the cracks in the end-to-end process.
Suggested potential remedies include:
  • Review and refresh your Service Level Agreements and service catalogue with each of your customers on an annual basis.  Get them to sign off annually. This provides an regular reset of expectations and can be used to reinforce roles and responsibilities.
  • Clearly communicate roles and responsibilities for each end-to-end process and reinforce this regularly with the business teams.  If necessary consider refresher training or remind stakeholders in other ways with desktop quick reference guides on how to engage with the shared service.
  • Coach your team in how to respond to change requests/scope creep versus your service catalogue.  Instigate a transparent, pragmatic process that captures required changes and ensures all parties are clear about the amended roles / responsibilities.  When changes are made, ensure docuemented work instructions are also updated.
  • Review your performance reporting and ensure it contains metrics that measure compliance with both shared service and business unit responsibilities, as well as overall end-to-end process measures.  The old adage of ‘manage what you measure’ is never truer than in a shared service context.  Regularly monthly reviews of performance will help you to work with your customers to align their teams behaviours to their agreed responsibilities.

Feel free to contact me at eanevans@hotmail.com if you are experiencing other challenges with your shared service organisation and want a perspective on potential remedies.  

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