Lean in Shared Services Organizations – Could Deliver Big Bang for the Buck …
Business models becoming more complex, customers asking for more and more for less and less, competition much more fierce, and an incessant demand to keep costs (headcounts) down a new reality that is not just gently suggesting, but demanding more effective utilization of available, and often scarcer, resources.
Enter – shared-services organizations. A shared services organization (SSO) can theoretically consolidate support operations into a single organizational unit and substantially improve operating efficiencies by eliminating duplication and excess overhead, and streamlining and standardizing processes. The SSO should be able to deliver a substantially better service at a substantially lower cost. It should be a center of both value creation and cost reduction for the enterprise. If it cant do this, you have to ask whats the point?
In concept, establishing a well-functioning, value-delivering SSO sounds really simple. BUT, reality says not so fast. I work with companies every day, and its a very rare event (and thats generous) for me to hear someone say their internal shared service organizations deliver the highest-quality, while being the lowest cost provider of services. Why is this? Optimized internal SSOs should be able consolidate, standardize, and optimize known best practices for the enterprise, right? They should be able to align with the strategic direction and goals of the company, and orient service levels towards improving customer experience, right? I mean, theyre part of the enterprise, so they should be able to do these things at least as well and an external provider of the service, right?
Theres more to good shared services organizations than just consolidating people and systems
Often times, it does seem that a shared services organization was built simply by throwing together people and systems from different areas and groups. All I can say is good luck with this approach. In reality, it requires a change in mindset and an increased focus on the overall business, and a hard look at the processes that are really needed to drive the business. No more living in that isolated black box. Successful SSOs integrate aligned and continually optimizing processes with right-fit people, information, and technology automation to deliver a totally new level of capabilities.
a short powerpoint overview of Lean in Services Operations …
- Understand the value stream, end-to-end, from both the customer AND the producer perspective. You cant optimize what you dont understand.
- Establish meaningful and actionable service and process metrics that serve all customers of the service. Make the metrics visible.
- Focus on driving efficiency by eliminating wasteful, non-value-add steps and unnecessary complexity — from supplier, producer, and the consumer of the service.
- Constant focus on customer experience, alignment, and process improvement. Well-executed, targeted Kaizen events can deliver improvements in weeks or days, not months or years. And, those improvements positively impact all customers of the service.
There are many other examples, but the point is that if youre looking for a place from which to pull significant additional value, then you may need to look no further than then enterprises shared services organizations. And Lean may be a powerful and extremely cost-effective tool to apply. As always, feel free to contact me directly if youd like to discuss in more detail.