Do,s and Do-not,s of Shared Services

Do’s & Don’ts For Working With Shared Services Center

SSCs or shared service centers have made life very easy for organizations who are now focusing on their business development and are sending non-core functions to the shared service providers. Organizations today are outsourcing processes like payroll management, human capital management, procurement, finance and accounting which includes record to report, order to cash, revenue assurance and many more. While these functions are not less than vital for organization’s sustainability, they are certainly non-core. Just because improved management of these functions can bring in cost efficiency but does not bring in revenue, they do not become any less important for an ambitious organization.

Organizations look at many aspects to be able to decide on their shared services partner. They decide between hybrid vs outsourced vs captive shared services, considering the key cost management areas they could identify in their business. They judge every application on reputation, experience and many other factors along with their process competencies. But more than just few times, they forget the basics and the association does not give as much as it should, to either parties.

We have here put together 9 do’s and don’ts for organizations which are currently considering shared services for their business processes :

Do’s & Don’ts :

1. Clearly define and divide the activities between the entity and SSC – Good fences make good neighbors! Define every role and responsibility clearly with no chance to confusion. Do not leave ambiguity. Best is to list down all actions needed at all levels at each step of the process and define the responsibility. Everything should be clearly mentioned on the SLA.
* We have also put together the elements of an SLA, you can’t take chance upon. This article might prove to be useful for you at this moment, when you are working on creating one for yourself.

2. Avoid overlaps – Anything which is not black and white is Grey! And grey becomes no one’s land!! If both are responsible, actually no one is responsible. Ensure that there is no common share of responsibility, else each of the teams might leave it to the other and it will go completely unattended. You should know and clearly define what controls and sub processes you wish to keep to yourself and what is to be sent to the shared services partner.

3. Don’t expect SSC to know it better than you – It’s your work after all and no one can know it better than you. Your processes, standard practices, controls, everything is best known to you internally. Don’t expect SSC to know everything beforehand. They would know the best practices and general practices for processes but not specific to your business/industry. Therefore give them as detailed understanding of your work as possible and give them time to dive deep into your system.

4. Co create, and co own – Generally SSCs have a pre-designed system. Most processes fit well into this pre-defined structure. If your requirements differ from what is applicable in general, instead of finding faults & flaws in the system, work hand in hand with the shared service provider to develop your system, review the performance and improve it further.

5. Are you ready yet? – Ideally this should have gone to #1 position in this list. If you have decided to go for SSC, waiting would make things difficult and urgent only. But if you are not ready yet, things will be even more difficult. You need to ensure that your organization and each process under consideration is matured enough to be outsourced to a shared services company. It’s a good idea to check advantages and disadvantages of shared services for your organization before taking the decision for SSC. At the same time, if you have decided to outsource already, do not take too long to execute.

6. Give time to the processes to mature – Rome was not built in a day! And SSC is no expert of your own processes and business. Give them time. There are lot of steps and challenges before you can see a fully matured and efficient process and this needs time to think, conceptualize, execute and optimize.

7. Gone are the days of customer – vendor relationship – its partnering now. While the fact that “Customer is King” can’t be denied, you would agree that considering SSC equivalent to your own team and entering into a partnering kind of relationship with them, working hand in hand for smooth transition, will only give you a greater advantage.

8. Be open for change – Best practices don’t come without change management. You might have your own processes but introducing best practices will only help you retain control with minimum deviation. You need to keep acceptance for change in your current processes.

9. Contribute ideas – all we see today around us must have started with an idea. Though the SSC team is supposed to be the process re-engineering experts, giving thoughtful ideas, but a small idea from you or your team members might bring about a great change for good. And the good will be for you only.
Don’t hesitate in participating fully in the complete process of establishing a robust system and smooth transitioning. A good hand holding will result in better transition, change management and efficiency of system which will in turn be most beneficial to your organization.

About Sunil Agarwal

Sunil is a qualified CA with 14 years of varied experience across banking, IT, Manufacturing and Service Industries. He is amongst the first few handpicked professionals from within the group to initiate the idea of EBEX, a shared service delivery platform.

Sunil is associated with the group for 6 years. Prior to EBEX, he was engaged with Dish TV managing their SAP Application. In his earlier stints, Sunil has worked with ICICI bank, Wipro Infotech and Dalmia Cement at different positions and has a flare of Accounts, IT as well as Operations.

At EBEX, Sunil is not only responsible for managing SAP and allied services for mostly all entities under the Essel group, but also works on ideating and creating Business Processes for bringing efficiencies, standardizations and enabling smooth transition to digital formats of processes.

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