Also, in a distributed model each specialization will likely have different levels of expertise, program timing and priorities. This can create huge operational conflict for companies. One part of the organization may emphasize people development and rotational assignments, another might not.
The result is that employees will defect from one group where they may be needed most and jump to another for a better career trajectory. Continuity of Services : Shared services can promote ubiquity of programs, services and processes across a company. As organizations scale, there is nothing worse than conflicting infrastructure. Tasks such as assimilating a new employee, transferring an employee from one group to the next, even administrating a performance review can become nightmarish for managers, employees and the support groups charged with facilitating these activities.
Centralization promotes common understanding, definition, service level agreements and associated metrics. In practice the shared services leaders drive to make the service and program offerings vanilla or "we do it one way".
Yet, most businesses when growing multi-nationally or globally require more than vanilla from support functions. That is, hard driving business leaders expect support functions to be enablers — not energy sapping, procedurally heavy bureaucracies. Complex, confusing internal processes can undermine innovation, company spirit and productivity on levels that are hard to quantify but the impact on profitability can be substantial.
If the technology and infrastructure is lacking these aspects can bog down the shared services implementation for years and at the same time add greater complexity and unwanted drag to the growth and development of an company.
This may be true with regard to making sure managers complete employee performance reviews — and now that you have a central data base thanks to shared services the outstanding reviews can be identified and managers reminded to get these done. Anything that detracts from designing, building and selling products and services is generally bad for business. If the overriding objective is cost savings very typical for companies to become myopic this way then the intended effort will likely backfire.
For example, one company implemented a preferred vendor program as the recruiting function was centralized. This restricted business units in specialized disciplines from using niche recruiting firms too expensive to fit the preferred vendor RFP. The result was increased time-to-fill, lower quality candidate slates and delayed project work.
This infuriated hiring managers under pressure to deliver product; unable to hire the right expertise. The centralized recruiting function had saved money and was running at a lower cost with this preferred vendor program. Did this benefit the company overall? A short-term, bottom-line only focus is easy to justify when money is tight but this short-sighted approach can create dangerous disabilities that undermine productivity. Follow Us. What employee recognition trends should you be watching out for?
Provide excellent customer service to your employees. Three steps to a more global, strategic and operational HR shared services cente HR Shared Services? The organization can achieve some benefits with a limited set of functions, but ideally shared services will encompass all the non-core support functions. There is tremendous opportunity to globalize and expand the scope of shared services across borders and continents and across all legal entities wherever they are domiciled.
Many companies have achieved shared services in certain regions, but not in other regions. There are also some excellent examples of success across the globe.
This will ultimately depend on the effectiveness of the services being offered by shared services. Technology is becoming a real enabler for shared services and business process outsourcing. One example is global enterprise resource planning ERP platforms.
The user-friendliness and reporting of these ERP platforms has significantly improved in recent years. It introduces greater speed, efficiency, standardization, and accuracy to the repetitive high volume rules based tasks. With all sound propositions, business leaders are advised to develop a structured framework as the building blocks with clear, tangible benefits and correctly defined expectations before embarking on RPA initiatives. As a result, each region often functions as a separate unit, trying independently to improve productivity and reduce costs.
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.
Most shared-services projects first consolidate and standardize high-volume activities, such as accounts payable or cash application. Many SSOs stick with this role, and become pigeonholed as transaction-processing utilities. Forward-thinking firms 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. Learn more: Shared Services Strategy and Structure.
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:. In the past two decades, companies have moved transaction-processing activities to low-cost geographies to take advantage of labor arbitrage.
These efforts aim to improve organizational capabilities, drive processes improvement, reduce costs and execute strategy. SSOs should also consider robotics capabilities. RPA enables shared services leaders to achieve productivity increases and cost reductions in excess of those provided by labor arbitrage alone.
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