Today C-level leaders are pressured to cut costs, tighten controls and to improve performance. How to drive your Shared Service operation to the next level of performance?
Establishing performance management in shared service environments is found in practice to be less simple than is often thought. Managing the (dis)satisfaction of the business, working with (difficult) internal customers and the difficulty to measure the performance of the SSC are known pitfalls. To deal with these challenges you need to have appropriate governance in place supported by a proper application of modern performance management techniques. The focus of this blog is on the latter.
From the many business cases that companies have lined up at the start of SSC shows that the main objectives of a SSC often can be traced back to improving the quality of service and/or cost reduction. The focus on best quality at lowest cost is also evident from the fact that most of the starting SSC’s choose for an operational excellence strategy as starting point for the establishment of their organization. An effective performance management system is an essential condition for making Operational excellence possible. How to develop such a system?
Following the steps Bernard Marr described in his book ‘The intelligent company’ (2010) it starts with (1) defining the objectives and information needs. So following the strategy for which the SSC was set up; what do we need to know? And who needs to know what, when and why? So if you following an operational excellence strategy or the main drive is cost reduction ask yourself what the most important questions are which needs to be answered. And on the who needs what … in practice I often see three main levels of KPIs being used in shared service environments: (a) KPIs around the governance and management of the relationship between the SSC and her clients, (b) reporting to the executive management and © KPIs for the operational management of the SSC. In this blog I’m referring to these operational ones.
Step 2 is than collecting the information. To do so you have to think what data is needed to meet the different information needs. Understand not only what to capture but also what this means in terms of meaningful change and the development of your business.
Step 3 is perhaps the most important one; analysing the data and gain insights on the performance. What do the figures tell you? How valuable is this information in terms of tangible improvements? Remember; hindsight creates the best insight!
Step 4 is according to Marr about presenting and communication of the information. Important questions to be answered are how to best present the information to inform decision making and what are the most effective ways of reporting and visualizing the information. Mirror42 is a great example of such an enabler.
Step 5 is about making evidence-based decisions and on creating a knowledge-to-action culture. To assure such after this step the circle continues with step 1 and so on.
So to summarize:
• Utilize data to build value perception with your (corporate) team.
• Spot trends and cross reference data to truly understand your business metrics.
• Develop key controls and make us of valuable supporting tools and meaningful reporting.
• Make evidence based decisions.
• And continuously improve your organization meeting the expectations of all your stakeholders.
The article is nothing than a collection of useless commonplaces.