Getting Employees and Management On with Shared Services

For a shared services project to be a success, all stakeholders must buy in to its key purpose and principles.

Use of shared services and outsourcing is increasing at a time when employee morale is already low as a result of pay freezes and redundancies.

Budget cuts could also leave some stakeholders in a position where they have little choice about implementing such projects, despite the short-term start up costs.

HR departments must find a way of overcoming these challenges if they are to make a true success of shared services projects and pave the way for further program developments in the future.

Senior Management Buy In

Deloitte's 2011 Global Shared Services report found more middle market companies are now moving into the shared services space, as the platform is now viewed as a tried and tested way of cutting costs and boosting performance.

Within the private sector it was found 25 percent of enterprises have VPs in charge of shared services centers (SSC), while 38 percent have a director leading the operation.

Just 8 percent charged leadership of the SSC to a manager and almost half have appointed a specific position for managing the collection of centers.

However, these results generally represent well established shared services centers. Some 44 percent of those included in the research had been running for 10 years or longer.

For an impression of the challenges facing newer shared services operations, the results of a survey of chief information officers (CIOs) in public sector bodies shows the issues senior management has with projects.

Almost half in Europe cited concerns that the longer term cost savings would not make a movement to shared services worthwhile, while 39 said they were concerned about losing control of their key business functions.

"This is compounded by the prospect of job losses and the legal complexity of transferring staff to a shared services model," Jessica Hawkins, Ovum analyst and author of a new report, said.

She added: "The move to shared services does involve upheaval and invariably means changing software applications, which in turn can require system and data migration and all the complexity that this entails."

Developing the Skills to Drive Shared Services

Sharing skills or gaining access to ones which are not currently available in an organization are often key drivers behind the initiation of a shared services or outsourcing program.

In the current high-pressure climate, HR departments may also look to shared services as a way of relieving internal pressures, however, this is one area where the projects potentially fall short.

Previous research from the Chartered Institute of Personnel and Development found those involved within the shared services operation were still taking part in activities which were not relevant to their new role, were wrapped up in work which should have taken place during the transition and had problems with defining their position.

There are arguments both for and against using internal staff to drive a shared service partnership. Outside persons with experience of working on projects will be able to apply this knowledge to create a smooth transition and foresee any potential problems.

However, the internal knowledge of those already employed at the company can prove invaluable and employees could feel that their role is being undermined when outside staff are brought in, particularly if the shared services program is likely to lead to job losses.

Tim Stafford, founding editor of CEB Views, believes the development of shared services staff is essential if they are to remain engaged, saying creating a career path for staff will "pay dividends."

Writing for the website, he said: "Not only does the action of creating the career path signal to employees that they are important to the company they work for, it shows them how their role contributes to the organization now, and what they have to do to move to a more senior role."

He recommended job rotation as another way in which to develop skills through an understanding of how their role fits to ensure the smooth functioning of the entire project.