Introduction and challenges
The shared services model has become standard for support functions and its usage is growing within operations. It consists of bringing together staff and resources in an organization or group dedicated to providing more efficient service and better expertise to the company’s operating entities. The benefits are numerous: economies of scale, professionalization, agility, standardization of processes, and the development of expertise. Moreover, a shared services model allows local management to focus on operations and customers.
The impact of the model is multiplied when it is applied to all or several support functions (e.g. finance, HR, procurement, IT, customer service) and certain business processes (e. g. logistics, engineering) with strong variations: local, regional or global shared services, governance by function or cross-functional, use of outsourcing.
Companies that do not have a shared services organization are left wondering how they can catch up with their competitors. Companies who have already implemented a shared services organization are wondering how they can go one step further and increase performance and productivity. Regardless of the company’s level of maturity, managers must ask themselves the following strategic questions: What is the target vision of shared services? Over what scope of activity should it be deployed? What are the future locations of the centers? Is outsourcing relevant to my organization? What is the business case for this new organizational model? How can you establish a realistic roadmap? And particularly, how should the transformation be managed?
How we can help
Beyond the methodology, Argon & Co has shared services expertise to help its clients make the right strategic choices. Developing a shared services strategy and roadmap involves three key steps:
- Diagnosis of the existing system
- What is the maturity of the support functions in the company?
- On which functions and activities are shared services deployed? In which geographies?
- How has cost and performance evolved?
- Identification and evaluation of different scenarios to inform the choice of shared services’ target vision. Some commonly studied macro-scenarios are:
- Consolidation of activities in national and global shared service centers with localization scenarios
- Outsourcing of certain activities
- End to end process integration
- Expansion of the functional scope and development of the governance model
- Develop the transformation roadmap and business case
- Evaluation of all opportunities and constraints related to the implementation, whether technical, HR and social, economic, political, etc.
- Analysis of the different possible trajectories and recommendations
- Development of a realistic business case integrating project costs and benefits