Why do Shared Services focus on the cost of labour?
Let’s first consider how organisations typically evolve their Shared Services, while there is variety in approach, broadly speaking the stages are similar (assuming governance, business case and management of change are all in place):
Wouldn’t it be better if first there was a way of balancing the work that you needed to get done (using good forecasting to get ahead of the game) with the capacity available, and that capacity was actively managed (using real data about agent production and challenging but achievable goals)? Work arrival patterns and SLAs can then be used to your advantage with performance becoming a managed output.
Organisations who adopt these practices easily achieve 20% – 25% improvements in productivity of the operation as a whole and separate to any other intervention. The staff respond positively as they can see their part in the plan with the operation feeling in control and not driven by the inbox. These types of operations are much better placed to cash the cheque from subsequent business process based changes.
Sharing in Shared Services
The desire to achieve economies of scale has been the driving force behind many Shared Services. However, as more and more transactions of a similar nature are delivered by the same operation, the work arrival profile starts to bite, peaks upon peaks and troughs upon troughs. Our experience is that Shared Services are run by finance or HR experts, which limits their confidence (especially without a framework where they can see their own work will get done) to actually share resources. Whether that be across teams, departments or domains with counter cyclical workloads.
With planning, a decent skills matrix and an open mind, the sharing of capacity is easy and can have a staggering effect on the actual number of resources needed. It is perfectly
feasible, and very common in banking and insurance, to have “multi-disciplined teams” or “on demand teams” who have skills in a variety of transactions and can be truly shared. Most transactions in Shared Services are not that hard to master, otherwise the operations would not be able to cope with the attrition replacement.
Perhaps the opportunity is greatest in the outsourced Shared Service market, who have the additional potential to share resources across customers. Often the basket of customers are in different industries or have different financial calendars – increasing the chances of counter cyclical work – but visit any outsourced operation and you will see teams ring-fenced by the customers they serve and fiercely guarded.
Resource input cost is of course important but Shared Services need to consider alternative strategies like these.
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Jon has spent nearly 20 years helping clients transform their operations by outsourcing their business process to Hewlett Packard Enterprise Services.
Throughout his career he has used technology to drive better outcomes within operations across Banking, Insurance, Public Sector and Shared Services and knows that it is critical to have a modern capacity management solution in place to realise benefits from change.
Jon is now helping to make ActiveOps, the leading platform for operations control, an essential foundation for digital transformation.