Are corporate shared services adding value?

Market and community expectations are changing, with stakeholders demanding organisations become more responsive to changing circumstances.

Shared services environments for Human Resources, Information Technology, and Finance departments should theoretically be able to respond well to changing needs, as they are defined by service delivery and outcome measurements. But many leaders have doubts regarding the value of traditionally defined corporate shared services.

In part, this is simply a reflection of the reality of service delivery. Customised services and specialist in-house capabilities require significant investments. In many cases the cost of delivering the corporate shared services was the key consideration in their design. Other factors such as service quality or adaptability have traditionally been far lower in the list of priorities.

Workplace attitudes to organisational design and the allocation of programs of work to workplace teams have also changed in recent years. There is now an increasing emphasis being placed on the use of small multi-disciplinary teams.

While this approach is often described as an agile model, it is typically only loosely based on traditional agile software development methodologies. Regardless of how it is defined and described, a multi-disciplinary team approach can be challenging and expensive to implement. This challenge can be further increased when your workforce is missing key in-house functional expertise, as a consequence of workforce functions having been centralised or extensively outsourced.

Strategy is crucial to shared services effectiveness

Trying to be all things to all customers is a widely used corporate services strategy. It is a recipe that leads to under-performance and disatisfaction.

There will be business units and customers within your organisation that need differentiated services. By definition, elements of your corporate strategy will also have a higher priority than other deliverables, and involve an identifiable subset of your workforce.

Organisations using a corporate shared services model need to carefully align their shared services delivery to their strategic priorities. Understanding who the priority “customer” is for each shared service is critical to service quality and customer experience.

Poor alignment with strategic priorities can easily undermine any benefits that might accrue. Strategy is not static, so corporate shared services need to be able to be tailored as required.

Service differentiation will most likely increase complexity, impact costs, and increase the need for flexibility. It will also make it more difficult to accurately benchmark service delivery, and potentially change the measures you consider important. This will be counterbalanced by improved performance against strategic goals, improved corporate services delivery, higher workforce satisfaction, and reduced risk.

The need for differentiation should not preclude elements of corporate service delivery from being commoditised. But it does make it more likely that your organisation will need to consider using an increasingly complex blend of in-house and externally delivered corporate shared services.