Continuing on yesterday’s theme of Service Management Mistakes, the Shared Services & Outsourcing Network also has an article that describes 10 more mistakes made when starting shared services that points out some questions you should ask before you consider making a move to a shared or outsourced services model.
- Will the Service Centre Accurately Estimate Your Needs?
If you’re a small operation, it’s possible that the needs and requirements of the larger clients of the Shared Services Organization (SSO) might force themselves to the front of the delivery queue. Does the SSO understand what you will need, when you will need it, and what your priority tasks are? - Are its allocation and chargeback models coherent?
This is crucial to insure that you will be paying a fair price for the services received since you should be charged on actual utilization and not expected utilization. - Does it have sufficient implementation-focussed governance mechanisms to insure success?
A strong governance team is critical before transition to an SSO, during transition to an SSO, and after transition to the SSO to make sure that services continue to be executed efficiently. Not all issues will rear their ugly head during the prescribed implementation timeframe … some might wait a few more weeks, or a few more months. - Is there an adequate change management architecture?
Many projects fail due to underestimation of the amount of effort that will be required for change management and the support that will be required. Does the SSO have a well defined change management strategy that they will use to support the transition? - Are interfaces addressed?
Improved process can lead to great efficiency gains … which can be lost in a sea of disruptions unless you understand where the inputs are coming from, where the outputs are going to, and what other business units will be affected. Make sure that you don’t create more problems in your attempts to fix the ones you know of. - Are you planning to transfer the right processes?
A good SSO can managed transactional and knowledge processes. While they might not be able to strategically source your direct categories, they might be able to negotiate better savings on your telecommunications and office supplies contracts with greater leverage, or just collect the information faster. - Do you have a clear SLA?
While sensible SLAs are crucial to success, they have to be clear and comprehensible. According to Dick Locke, who has an entire state on his side, as a contract, they should have a reading ease of at least 40 and be comprehensible to someone with only an 11th grade education. - Have you internalized the wisdom?
While there’s no shortage of extremely useful guidelines to get you started, there’s no one-size-fits-all methodology for migration to SSO — be sure to have an experienced advisor on your side before attempting a transition. - Have you identified the real constraints?
While there will always be constraints with respect to finance, space, bandwidth, etc … accepting the constraints put in front of you without at least challenging them (in an effort to overcome them) will mean the difference between a world-class SSO relationship and one that merely gets the job done. Which organization would you rather be associated with? - Have you accurately estimated the working costs?
Have you costed the relationship to the nearest cent? Are you sure? There are operational costs, usage costs, management costs, oversight costs (which include communication and travel) and change management costs, for starters. Do you have to buy more software? Do you have to do custom integration work? Do you have to do process redesign? etc.