The Need for Structure

A recent survey reveals a shockingly informal approach to shared services communications.
By Debora Card
A recently completed TPI survey that involved a detailed review of shared services organizational structures and metrics identified little formal structure in place to drive alignment in strategic objectives or the measurement of success. These results point to three clear opportunities for shared services centers (SSCs) to improve their results by adopting a structured framework to “plan, execute, and manage.”

Looking for new ways to improve the perception of your SSC? Consider this three-step model to ensure you’re focusing your attention on what matters to stakeholders:
Step 1: Understand Your Stakeholders
As HR professionals, we know the value of listening to “the voice of the customer” and “360-degree feedback” as a key input into HR strategy. However, TPI’s 2010 survey revealed a surprising absence of formal mechanisms for obtaining stakeholder input.
Fully 70 percent of respondents indicated they used informal and ad-hoc communications as the primary method for exchanging information with key stakeholders. Indeed, according to the TPI findings, few organizations employ customer councils and even fewer (a mere 10 percent) have executive advisory boards.

It is not surprising, then, that without a construct for two-way communication and collaboration, the biggest challenge cited by 80 percent of survey respondents is “selling the value” of their SSC to stakeholders, followed by change management—cited by 40 percent of respondents. Both of these challenges are best addressed through consistent, two-way communication with both the users of the service (employees and managers) and those who fund the service (executives) to ensure strategic alignment. The industry best practice calls for scheduling quarterly strategy meetings and monthly communications with key stakeholder groups.
Step 2: Align Initiatives to Strategic Objectives
Survey results showed a significant misalignment between what respondents reported as their top strategic objectives and where they were investing in continuous improvement initiatives.

Although end-user satisfaction was the number-one strategic objective, only 20 percent of respondents had conducted past initiatives to address this, and 60 percent planned future initiatives. On the flip side, cost savings, which was ranked in the middle of objectives, was planned by 90 percent of respondents for future initiatives. Similarly, enterprise standardization, which ranked sixth out of seven strategic objectives, was planned by 80 percent of respondents in their continuous improvement initiatives. Best practice would execute improvement initiatives that clearly align with strategic objectives.
Step 3: Measure and Report on Key Metrics
Finally, as management guru Peter Drucker said, “You can only manage what you can measure.” Yet, based on our survey responses, meaningful measurement for shared services remains elusive. On average, less than half of SSCs have formal service level agreements (SLAs) of any kind.

Of the 57 percent of HR SSCs that measure SLAs, fewer than half have established targets or measure more than basic “telephone statistics.” Why? SSC managers indicate difficulty getting at the source data to measure meaningful SLAs.

Very few metrics can be pulled off of existing systems, and most respondents were not using tools to facilitate service level measurement other than basic Microsoft
Office tools, such as Excel and PowerPoint. Best practice establishes 10 to 15 metrics across categories such as availability, timeliness, accuracy, and satisfaction, with specific targets against which performance is measured and reported on a monthly basis.
Applying Best Practice Structures to SSCs
While clearlly not common practice based on the survey results, SSCs looking to deploy best practices for improved performance must establish “continuous loop” feedback mechanisms not unlike HR performance management processes to achieve four outcomes: 1) establish strategic objectives in concert with key stakeholders; 2) align investments with efforts that directly address those objectives; 3) identify metrics and targets that reflect the expected results of those initiatives on the objectives; and 4) report back to stakeholders on their performance against the metrics and achievement of objectives. After the last step, the cycle begins again by engaging stakeholders in refining your strategy for continued future success.

Tags: Consultants & Advisors, HRO Today Global, Professional Contribution

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