What Risks Are Involved In Moving To A Shared Services Centre?

There are many benefits for organisations to move over to a Shared Services Centre (SSC). We covered some of the key benefits in our blog – How Shared Services Can Benefit Organisations, however, there are also many risks associated with the move; the key to reducing the risks involved is in the project planning, communication and management.

We are often asked what the biggest risks are when considering a move to a SSC Target Operating Model (ToM) within an organisation; therefore, we have highlighted the top five risks below, together with some tips on how to overcome them.

  1. Lack of Senior Management/Executive/Board-Level Sponsorship

Without top management/Board-level Sponsorship and engagement, implementing the transformation and associated business change to a SSC structure will become fraught with significant time-consuming and costly challenges. With Senior Exec/Directors publicly committed and leading by example, we have found that the benefits of the change are more seamlessly communicated within the organisation, thus reducing the fear or “resistance” to change by employees, resulting in a much smoother transition to the “new world”.

  1. Lack of communication

Should all departments, country heads and senior management adopt a “silo” mentality, then the project will undoubtedly be unsuccessful, as staff will push against the SSC once it is set up. In order for the implementation of a SSC to succeed, the senior management and Exec teams are required to pull all internal department heads and any country management together to create effective cross-communication between the functions eg involving departments and country heads as part of the process, and ensuring they have opportunities to build relationships with their counterparts, as well as addressing any concerns that may arise.

  1. Poor Planning

If the business and staff fail to realise the benefits of the project that have been set out in the business case to move to a SSC, the project is unlikely to meet expectations. Ensure a checklist is included within the process to review the benefits that have been achieved and identify the work that needs completing. This will highlight any critical gaps between the planned and realised benefits.

  1. Cost overruns and delays

Many projects encounter the problem of costs exceeding original budget, thus resulting in the business case for change being negated, and cost savings taking longer than planned to materialise. Ensure all costs and anticipated savings are rigorously calculated, and open for benchmarking throughout the project.  Implementation costs should be thoroughly managed and early warnings highlighted when costs look set to over run.

  1. Lack of understanding of business processes and service delivery

Attempting to implement a SSC ToM without understanding the business processes and service deliverables is recklessness for any business and will result in a poor-performing SSC in terms of the quality of information provided, and operational performance, which in turn may have increased cost implications as well as time overruns for the project.

Therefore, it is vital that as part of the planning, the “as is” and “to be” processes are fully detailed and correctly “mapped” across all functions “in scope” for the proposed SSC eg Finance, HR, Procurement etc In addition, an agreed service standard should be derived, along with a delivery structure and the steps to bring these all together.

There are various other risks that are also associated to moving to a Shared Services Centre, some of which are highlighted below.

  • Resistance to change
  • Threat to corporate reputation
  • Loss of knowledge and expertise
  • Inadequate staff training and development before the migration
  • Failure to understand the complexity the new SSC will bring to the organisation

NDJ Consulting has significant experience in providing the resources required to support organisations wishing to adopt a Shared Services Target Operating  Model; if you wish to discuss you recruitment needs, please contact Neil Jury.