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The 5 habits of highly effective SSCs

The 5 habits of highly effective SSCs

How many times we are wondering what’s the secret for highly effective SSCs in our attempt to be more productive?

To understand better what we are talking about, first we should look at the evolution of Shared Services, which involves 5 levels.

  • Level 1 called decentralization is about local needs, duplicated efforts, poor central controls and multiple platforms.
  • The second level is represented by centralization and is about consistent controls, limited scope, labor arbitrage and a single instance of ERP.
  • SSC is situated on level 3 and consists in client management, process efficiency, standardization, improved controls and increased scope.
  • At level 4 we have global services that have a multifunctional scope, governance model, end-to-end process and hybrid model.
  • And last, but not the least, integrated services that involves value-add, data intelligence and business partner.

Some of the challenges that SSCs is facing are: insufficient labor and processes, lack of customer focus, high level of exceptions, shadow systems, and one of the most important, lack of vision and insight.

What can we do about those challenges in order to have more highly effective SSCs?

  • Evolution of services
  • Technology utilization
  • Flexible operating model
  • Service the internal customer as if external client
  • Consistent end-to-end process

1.Evolution of services

SSc service offerings are growing beyond traditional “back office” processes and incorporating Administration, Purchases, Legal, Marketing, Logistics and others

In the past if SCC tradition was composed of IT, Finance and HR, nowadays the SCC multifunctional besides IT,Finance and HR, we also have Purchases, Admin, Legal, Logistics, Marketing and Sales.

Effective SCCs it is composed of:

Functions:

  • Stable operations
  • Common support areas

Support of Senion Management

  • Executive buy-in
  • Multiple stakeholders
  • Big bang vs evolutionary

Planning

  • Defined scopeâ
  • Single center, multiple center, hub and spoke
  • Center of excellence

Organization model

  • Break-down silos
  • New org structure and reporting

2. Technology utilization

Technology helps SCC provide effective, efficient service. Technology utilization could be divided into 4 phases:

ERP

  • ERP systems under a single implementation to help achive greater operational efficiency for the SCC

Technology enablers

  • RPA, document management tools, electronic billing, automatic reconciliations, case management, self-service tools

Cloud computing

  • Increase capacity through a greater number of applications and faster implementation at a lower cost

Social media

  • Provides the SCC with opportunities to enhance collaboration and share best practices, internally and externally

3. Flexible operating model

The BPO market has grown significantly in the last decade covering financial, accounting, certain functions of HR and customer care.

The age dilemma is make or buy?

  • In house
  • -outsource
  • Hybrid (in house + outsource)

Things to be considered:

  • Cost vs control
  • Level of maturity of processes
  • Access to skilled labor
  • Contract negotiation
  • Time zone and language
  • Transaction volume
  • Flexibility demanded
  • BPO risks
  • Geographic coverage

4. Service the internal customer as if external client

The Customer Interaction Framework (CIF) distinguishes a Shared Services organization from a single act of centralization and fosters a spirit of partnership between the SSC and its clients.

Without CIF:

  • Lack of clarity on responsibilities
  • Perception vs reality
  • Focus on negative aspects of service
  • One-way communication
  • Strained relationships with customers
  • The efforts required to maintain/improve morale

With CIF:

  • Customer oriented
  • Defined delivery expectations
  • Performance measurement and reporting
  • Enhances service delivery and efficiency
  • Improved customer relationships

For example, for client feedback is important to continuously monitor the client satisfaction both informally and formally. Also for performance measurement is important to have comprehensive KPIs, measures and metrics framework, SSO & client.

5. Consistent end-to-end process

Is an integrated model, that adds value to services due to analytics and insight, improves processes and helps to coast savings.

What are the advantages of using this process?

  • Promotes standardization
  • High efficiency
  • Promote cross-training and automation
  • Capture synergies and improves customer service

What are the disadvantages?

  • Difficult to recruit function leaders
  • Major change management
  • Complexity of understanding customer

In the end, highly effective SSCs means to continuously invest in services, to use technology, to have a flexible operating mode, to service our internal customer as if external client and to have a consistent end-to-end process.

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