The shared service model is an attractive proposition as it holds a promise for cutting costs and improving the efficiency of your business operation. But they say nothing good ever comes easy, and a shared service centre (SSC) is the perfect example for that. Implementing it in your office space requires some careful planning, and in that spirit, here are 7 common mistakes which can make this grand endeavour an even grander failure.
Forcing an SSC
An SSC is certainly an alluring proposition, but that doesn’t mean it should be treated as the panacea for all business plights. Before undertaking such a hefty task, consider if it’s really worth it for your particular office space and if there isn’t one worthier.
Not Measuring the Starting Point
It’s easy to get carried away by all the potential benefits of an SSC and dive in headfirst. But without the indispensable preliminary steps like measuring service levels and their costs beforehand, the actual benefits will always pale in comparison to the potential ones the client had in mind.
If you don’t know what the starting point was, then you can never accurately measure how far you’ve come and the metrics and performance of the new model.
Not Having a Clear, Documented Idea of Every Individual’s Role in the Process
An SSC is a complex enough model as it is, comprised of an interconnected web of various individuals’ unique functions and roles. Just like the metrics reveal the overall performance in numbers, documentation of each employee’s responsibilities will reveal the story behind those numbers and how to make them better.
In fact, this kind of documentation is important to any business model, not just for a SSC. Don’t mistake it for pointless bureaucracy just because it involves documents. This provides invaluable insight, like the picture on a puzzle box that guides you and helps you figure out the place of each piece.
Not Appointing a Full-Time General Manager Early on
The SSC is certainly not the kind of endeavour that can reap success without the proper coordination. For that, a part-time, non-specialist for whom the position as GM of the SSC is just one of multiple hats, simply won’t do – you need to appoint a full-time GM who will be focused entirely on planning and foreseeing the operation long before the go-live moment.
Many business operations leave the appointment of a GM for the last moment, which leads to imminent downfalls. It’s like hiring a sports team’s head coach a day before the start of the season.
Overlooking the Transition Period
The transition period often doesn’t get the respect it deserves. But as with many business endeavours, especially more complex and demanding ones like an SSC, the transition period can set the tone of the entire operation.
Because many organizations tend to channel all their thoughts into an SSC that is already up and running, they forget that a bumpy transition period can actually result in very tangible negatives, like delayed and even lost financial benefits, not to mention something on an even bigger scale like stakeholder dissatisfaction.
Settling for the Status Quo
While analyzing the past and present is an important part of making the future better, designing an SSC for the immediate present and only with past lessons in mind, without leaving enough leeway for adaptation to the future, is basically dooming the SSC to imminent obsoletion.
Creating and implementing an SSC is a lengthy process that spans constantly changing business landscapes and needs. As such, the team that gets it up and running has to do so on the go, giving it a solid foundation, but also making the model flexible enough to fit in new business climates and respond to arising demands.
For that, foresight is key – any decision you make today, you have to ask yourself if it will also be the right one tomorrow.
Having no Risk Management or Monitoring
Risk management is a crucial safety net, especially when it comes to something of the complexity calibre of an SSC. You need to be aware of the inherent risks of such an operation, have contingency plans ready to go, and of course, a monitoring system to signal the need for their initiation in the first place.
Just because a certain decision may cut costs, for example, doesn’t mean you shouldn’t consider any other, possibly unreasonable cost at which it will do so. In other words, you need to have the big picture in mind, and all the possible risks within, in order to avoid shortsighted strategies.
An SSC can do wonders for your organizations, but wonders in the business world are never really miracles, but rather the result of strategic thinking, careful planning, and looking at operation from all possible angles.