Shared Services are a serious disadvantage in the world of fast, lean companies. A company's inability to change has impacted many large UK highstreet brands in the last few years. So why are shared services such a bad thing? I'll take you through how and why the nice, compartmentalised SSCs which are easy to reason with and account for, are so bad for business.

1. Aligning to Business Value
Introducing Business Agility & a
Worked Example

2. The Problem
• Hierarchical Organisations Are Slow
• Slow to change
– Losing out to more agile companies, inc SMEs
• Slow to Deliver
• Slow to React & Adapt to Market Changes

3. Companies Affected
• Retail Hit Badly, it can
KILL Companies
– The last 5 years include:
• HMV
• Blockbuster
• Clinton Cards
• Borders
• Comet
• The Co-operative Bank
• Oddbins
2,600
5,793
6,536
944
2,469
3,951
2,500
402
0
10
20
30
40
50
60
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2007 2008 2009 2010 2011 2012 2013 2014 (to
May)
CompaniesFailing
People/StoresAffected
Retail Company Failures (‘07-’014)
Employees Affected Stores Affected Companies failing

4. Why So Slow? Shared Services!
• Create Contention Points
• Encourage Context Switching
• Misalignment of Value Propositions
– Q: Which bit of value are you delivering NOW?
• Exposes Organisation to ‘Big-Bang’ Change
– High Risk, High Sensitivity, High Cost
– Productivity Losses at Departmental Scale, at
Best!

5. EXAMPLE: Traditional Hierarchy
• ACME Road Runner Extermination Company
• Traditional Hierarchy
• For example, focus on just quote to payment,
via fulfilment
• Value Proposition:
“We’ll Get your Road-Runner! 14-Day Money Back
Guarantee!”
…Let’s Visualise the Above!

6. Organisation Chart
ACME Road Runner Extermination Co

7. Current Process: Customer Journey
Customer
Services
Sales EngineeringHealth & Safety Customer
Services
Engineering Credit Control
Reporting,
Invoicing, PR,
Management…
Quote to Payment (Coyote’s Journey)
1. Coyote, an existing customer, contacts
Customer Services
2. Put through to sales & purchases engineer visit.
3. Sales adviser logs visit against Coyote's record.
4. Through communications:
a) Engineering gets a request which waits in a
queue until an engineer is assigned.
b) Legal prepare a new agreement for the
extra work and send it out
5. Engineer scheduled & risk assessed.
6. CS notify Coyote to expect a visit in 8 hr
window.
7. Engineer visits & exterminates roadrunner.
8. Engineer registers job completion.
9. ...Which adds a journal entry in Accounts,
incrementing the bill, in turn finalising the
contract.
10. At the end of the month:
a) Accounts report AR, AP, GL etc. to board
including aggregate of Coyote's new order
and...
b) Marketing Analysts determine last month cost-
benefit and effort and adjust for the next
month. This is reported to the board and...
c) Marketing prepare a press release to tell the
world they helped Coyote finally catch
roadrunner and…
d) Credit control raise invoices for all purchases,
including Coyote's new service!

8. Who Does the Work?
Mapping the process to business functions to hierarchy, it’s distributed across the
enterprise!

9. Problem: Nature of Shared Services
• Lots of different work from different sources
• Forces context switching between different
items in the ‘work queue’
– especially ‘in-trays’ – These are LIFO
• Hence, alignment constantly changes
• Coyote’s uncertain position in the queue
means variance is high at all stages!

10. Value Chain Mapping
If we map the activities to the average* time to process a work item & check Coyote’s
order…
* Average used for illustration only! We assume zero variance in individual task processing time. Real effects are MORE uncertain, not less!
Key
= Work Item
X = Coyote Order

11. Total Time Through the System
When calculating the expected time through the system, it’s best case is shown
below! If the order is taken at the beginning of a billing cycle, it adds almost 30
days to this!
…But Can We Do Better?

12. Some Tips: What to Do?
• Arrange Multi-disciplinary Teams
– All related functions together in one team!
• Deliver JUST that Function and Nothing else!
• Everyone Dedicated to that one Feature
• Foster Sense of Collaboration & Teamwork
– LIVE IT!
– Arrange rewards around performance
• Look for areas to constantly improve!

13. TEAM
New Team Structure
Adopt a Person Responsible for the Chain in each
Function into the team. Do it again for others.
The A-Team

14. What Does This Flow Look Like?
Continual Improvement is a journey. “Every journey starts with a first step!” Alignment and working on one
unit at a time forces Coyote’s order to flow through the WHOLE system FASTER when each person in the multi-
function team is aligned and working on [Ideally] one thing at a time!
Note how the whole team
working on one item at a
time keep the item in the
same position through the
system! Even here
….and here!

15. How Does it Perform?
• The performance boost is STAGGERING!
– Over 5 times faster!

16. Dear Gawd Man Why?
• Working Together Reduces the Mountain of Work
– Note there is less for each stage to do
• Less-Context Switching = Higher productivity
• Pulling The Next Ready Task in the order it arrived
– Maintains item priority
– No unrelated ‘distracting’ tasks jump the queue
• Marketing & Performance Analysis in the Team allows:
– Short, Fast feedback cycle
– Faster Billing
– More Predictable Income
– Higher Rate of Return
– Greater Likelihood of Not Paying Out on Guarantee
• Team is always aligned to Value
– Always Ask: “Will this help us reach our goal?”

17. Thanks for Viewing
Further Reading
“The Goal” - Dr. E M. Goldratt’s - Theory of Constraints (ToC), Amazon Kindle
www.IanCarroll.com – Lean Specialist & Agile Coach
www.vanguard-method.com – Systems thinking Website
Ethar Alali @EtharUK @Dynacognetics
Managing Director & Chief Architect
Polymath-MathMo. Programming since 9 years old. TOGAF 9 Certified, change
agent.
Blog: GoadingtheITGeek.blogspot.co.uk
Accreditations & Associations
Specialist ICT Strategists & Advisors.
Member of HiveMind Network for some of
the biggest household and corporate multi-
nationals.
Accredited Growth Voucher Advisors
certified to deliver IT & Web Growth
Consultancy as part of the government’s
Growth Voucher Scheme.
About Us