The most effective shared services organizations (SSOs) share certain characteristics. For a start, they think globally, expand rationally and locate services wisely.
This article has been updated from the original, published on October 16, 2015, to reflect current conditions and research.
There are many ways that SSOs can deliver and demonstrate value to their internal customers, and hundreds of things managers can do to improve the three main components of shared services — people, process and technology — but the most successful teams typically share five characteristics.
Think globally from the start
Most companies try the shared-services model in their home country first and then export the concept to other parts of the world. As a result, each region often functions as a separate unit, trying independently to improve productivity and reduce costs.
“Successful organizations take a long-term view of shared services from day one and establish policies and organizational structures for a global model,” says Cliff Struhar, principal executive advisor at Gartner. These firms are careful not to get carried away and open too many physical offices, usually opting for a major global center and several minor regional centers. The leader of the SSO is responsible for all global operations and for providing consistent service to business units in all regions.
Consistently expand the function’s scope and scale
The first job of most shared- services projects is to consolidate and standardize high-volume activities, such as accounts payable or cash application. Many SSOs stick with this role, and become pigeon-holed as transaction-processing utilities.
More forward-thinking firms work to expand both the geographic scope and the breadth of their service offerings. For these companies, there are no opt-out options for business units. The SSO serves every country, location, business unit and employee of the company. Progressive companies expand the scope to include expert functions and don’t limit the criteria to whether the SSO yields the same kind of cost savings as those achieved by taking on high-volume transaction processing.
Use “global process owners” (GPOs) to standardize processes
Many shared-services projects target cost and productivity improvements within a single process (such as accounts payable). The most advanced companies often go well beyond those limitations and appoint GPOs for end-to-end processes such as order-to-cash or purchase-to-pay. GPOs look to standardize these activities across all locations, and they:
- Measure and improve process quality
- Apply best practices
- Manage external relationships
- Monitor customer satisfaction
- Identify technology needs
Move rule-based work to low-cost regions
Transactional work no longer has to be done locally. Today, technology and communications systems mean this work can be done almost anywhere. The best firms deliberately locate specific activities in specific locations, and decide which activities should be handled in-house and which should be outsourced. Their sourcing decisions don’t just depend on labor and other costs; they also want access to the latest technology and standardization across processes and locations.
Invest in training and recognize the importance of employees
As SSOs look to increase the value they provide to business-unit customers, successful organizations don’t treat employee training as a discretionary cost; rather, they see training and development as an investment. Our research shows that problem-solving skills are critical to providing a better service for internal customers — ahead of other competencies such as seeking resolutions to any problem and being a good communicator — and problem solving is four times more effective than any sort of functional expertise.
Notably, a sixth characteristic — around robotics capabilities — is growing as a priority as technology evolves. “Advanced robotics such as cognitive computing and machine learning tools could perform tasks that SSOs currently have difficulty automating,” says Struhar.