To exceed the expectations of multiple customer groups with the optimization of the delivery model, do you need to ‘pick and mix’ to maximize performance?
As the models for shared services centers (SSCs) mature, organizations have growing confidence in their ability to deliver real shareholder value. Many organizations are now looking beyond the initial set-up phase and adopting a longer, more strategic perspective on the future direction of their SSCs model.
Once the foundations for a high-performance culture have been put in place and best practices in processes have been achieved, there may be a natural shift toward the expansion of services and/or an extension of reach. This may mean moving from the provision of traditional transaction-based activities at the lower end of the service pyramid to the higher value-add decision support and analytical services.
Due to this expansion, shared-service organizations could find themselves operating in multiple geographies across multiple lines of business. Despite this complex landscape (and some would argue as a result of it), there is still the need to maintain quality while continually reducing the cost to serve.
For some, the logical next step is to make the strategic decision to identify and focus on core activities by outsourcing noncore ones such as mailroom, scanning, accounts payable, and/or complete end-to-end processes.
Many SSCs begin to develop direct relationships with trade customers and vendors. This, together with the need to manage third-party providers, means the SSC is suddenly in the intricate world of multi-sourcing and multi-relationship management. Unless this is carefully managed, the result may be a fragmentation of the service delivery model against a backdrop of falling service levels and growing customer frustration. If the SSC fails to properly manage both the provider and customer expectations, it is more than likely heading for a major service dislocation.
When faced with this complexity, how does the SSC retain control over service delivery while managing the conflicting demands and expectations of its multiple customers?
The key to successfully managing multiple stakeholders and expectations within a complex delivery model is to implement a governance framework. The importance of maintaining the right structure, communication, and governance model with all of your partners becomes fundamental to the ongoing and long-term success of the SSC.
How is this achieved? There is no single answer. Instead, each SSC needs to consider and evaluate who should form part of its decision-making forum. Should all stakeholders, customers, providers, and partners be brought together to discuss issues and actions in order to agree on the way forward? Or should the SSC engage with only its key customers before communicating any decisions and strategy?
Whichever approach is adopted, it is important the SSC remains in control and true to the organization’s core principles. As the business grows and new processes are taken on, it is easy to fall into the trap of diluting the SSC model in the drive to achieve customer satisfaction.
In summary, with challenges and opportunities such as multiple customers, expanded services, and global presence, the adoption of the following key principles will help you succeed:
1. Remain focused on the delivery of end-to-end processes. Do not get distracted by who should perform what activities. Continue to focus on improving and enhancing processes, understanding where control is exercised before addressing who is delivering the services.
2. Be flexible when designing and delivering services to your customers. Despite the need to maintain a standard approach to enable the use of economies of scale, you may find that in certain circumstances the customization and tailoring of services to meet customers’ business needs is the right answer. Never lose sight of the fact that the SSC is ultimately there to serve clients. The focus needs to be on delivering value to the customer while remaining as true as possible to the SSC’s core principles.
3. Maintain performance standards. Ensure that you implement and uphold a governance structure that works for all SSC stakeholders
You will also need to consider the right commercial, legal and organizational structure required to support the SSC. More on this area in our next column.
