They typically emerge from developments within a business - for example, cost reduction drives or mergers and acquisitions - and they target savings of between 25% and 50%. Staffed by specialists, often in low-cost locations, shared centres promise better service, enhanced skills and best-practice processes that focus on the customer. Well, that's the theory.
Some shared service centres get it very wrong. A friend of mine was owed £2,000 by a bank. When he rang to chase payment, he was put through to the bank's shared service centre. "Your invoice isn't on our Oracle system," he was told. "It might be on a different system, so you'll have to ring a different number." What was the point of this service centre if sharing information was not part of the deal?
Top-of-the-range software does not make a successful shared service centre - people do. Switched-on IT professionals recognise that technology creates the potential, but it is vigorous change management that realises it. This means winning staff buy-in right from the planning stage and keeping them fully briefed during implementation. It also means winning over customers - adopting a "from the customer backwards" approach at the design stage, to reflect their needs and preferences.
Communication is crucial to change management. Good implementations start by identifying all the stakeholders, then communicating with them on a regular basis about the organisational, emotional and behavioural aspects of change. This may include:
- Strategies to help change the organisation from its current to its desired state
- Development of a new organisational structure
- Identification of new roles and responsibilities
- Training and development
- New recruitment.
No matter what the change, it is important that senior management bring with them the people who will have to live with the shared service centre.
Readers Digest got it right when it implemented such a centre in Amsterdam to service its finance operations across Europe. It runs on a single global instance of Oracle Financials, which it shares with its sister service centre in Pleasantville, New York. To smooth the transition from old roles to new, functions were mapped, compared and contrasted, and new job definitions were drawn up incorporating service level agreements and key performance measures.
All user training, at the shared centre and across the business, was complemented by a communications programme that reinforced the benefits of adopting the new processes.
A raft of technologies support the transition of isolated services and functions into a shared service centre. Whether implemented on a global, regional or national scale, these centres rely on an enterprise resource planning system or, at least, common financial modules for transaction processing.
These days, workflow and imaging technologies are used to scan and route invoices for approval. Employee self-service, via e-procurement or Web expenses, can also increase efficiency. Yet, despite up-to-date technologies, benefits will only emerge quickly if a shared centre's users embrace change and adopt the new processes.
Building a shared service centre is both a technology challenge and a people issue. It pays big dividends to get your staff on side and to ensure that change management supports the introduction of new systems. With the ground properly prepared, the business benefits of pooling resources, systems and procedures materialise much more quickly.
Philip King is director of shared services at KPMG