A Look at Key Assessment Activities of a Shared Services Implementation
By Deborah Viers Traylor, CPP
Over the past decade, many organizations have been cashing in on the cost-saving benefits of shared services (SS). Shared services is a centralized, customer-focused transaction processing center for delivering most human resources and payroll services. The shared services model allows organizations to streamline and automate HR processes. The role of HR shifts to a more strategic business partner within the organization.
When an organization chooses to implement shared services, the project must cut across many boundaries within organizations--geographical, structural, and political. Executive-level support is required to remove the inherent roadblocks. A credible business plan that outlines the timing of investments, and provides an acceptable return on investment (ROI), can assist with getting executive buy-in.
Develop a Business Case
The business case should include estimates of benefits, costs, and key assumptions. Investment alternatives should also be considered. The business case should also provide executive management with the information necessary to make investment decisions on the proposed project. Business cases often go through various lifecycle updates; it is a dynamic tool, and the business case should be updated appropriately based on the shared services program. It may be presented in a variety of formats and usually includes an executive report with supporting calculations.
Determine Project Scope
Identify the business processes, software functionality, geographic parameters, and potential organizational impacts that are driven by the project.
Analyze Current Processes and Work Distribution
Collect, assess, and if necessary, update the current process documentation, including activities, responsibilities, enabling systems, and functionality. From there, determine the current level of effort for the organization to perform each activity within the selected process. The outcome should include a work-distribution analysis, which will feed the business case.
It is important to collect current process documentation to understand process flows and handoffs, as well as to understand how many resources are currently performing processes such as those in HR, payroll, etc.
When the organization is currently utilizing other vendors for selective services, it is important to determine whether these services are to be retained or changed, and how they will be integrated within the new service-delivery model. For example, if the organization processes its benefits through an outside vendor, it may wish to maintain this relationship by routing benefits-related customer inquiries to the vendor through the service center. A significant cost savings can often be realized by refining, consolidating, or terminating existing vendor contracts where appropriate to best fit the new service delivery model.
This initial vendor evaluation will be useful when gathering current process documentation, conducting process design workshops, finalizing the detailed process design documentation, and designing the new shared services operating model.
Assess Current Benchmarks and Effective Practices
The objectives of this assessment are to gather benchmarks and effective practices relevant to the processes within the project scope and to analyze this information against current performance. Benchmarking can help uncover improvement opportunities and provide an understanding of performance gaps through comparison to industry peers and top performers.
Perform Stakeholder Assessment
The stakeholder assessment enables the organization to better understand who its key stakeholders are in the organization, how they are affected by the change initiative, and what expectations and anticipated concerns they may have. This activity feeds a number of other change management activities, including:
*Stakeholder Management Plan
*Change Readiness Assessment
*Project Communications Plan
Develop Project Plan
Workplans necessary to effectively execute the project should be developed. The overall plan provides information on what is required; why it is required; how it will be achieved and by whom, using specific equipment, applications, and resources; and when events will occur.
Return on Investment
The primary outcome of a shared services assessment is a baseline to measure the process improvements and benefits realization. The ROI can then be determined by doing an evaluation of organizational capabilities against four key dimensions of strategy: service delivery, organization, operations, and technology.
This should better position the organization to realize the full value of its shared services organization after it "goes live." The analysis can also help to determine any gaps in the current state and desired future state, and focus the organization on closing the gaps and realizing the full potential of its shared services organization and the ROI.
Deborah Viers Traylor, CPP, is a Consultant for DVT Consulting LLC, and a Vice President of the APA.
