Are You Ready for a Multifunctional Shared Services Strategy?
1 | FEBUARY 2014 ARE YOU READY FOR A MULTIFUNCTIONAL SERVICE STRATEGY?
ARE YOU READY FOR A
“Multi” may be the way implementations and SSO expansions are trending,
but if you don’t have these 5 strategies in place, you’ll run into stormy waters
2 | FEBUARY 2014 ARE YOU READY FOR A MULTIFUNCTIONAL SERVICE STRATEGY?
IntroductionYou are committed to implementing Shared Services and have finally gained the blessing of the Executive Board. But there
are a number of decisions yet to be made, not least of which is what form your model should take. Today, many organizations
are eschewing the one-step, two-step approach of the past, and launching an SSO supporting multiple functions, instead of
3 | FEBUARY 2014 ARE YOU READY FOR A MULTIFUNCTIONAL SERVICE STRATEGY?
Multifunctional SSO models provide services for more than one support function, generally including
elements of Finance, Human Resources, IT and/or Purchasing/Procurement. According to Hackett data,
percentage is likely to increase as companies plan to leverage existing single-function implementations
or start from scratch as a multifunctional SSO. This is also true in the public sector, which is leveraging
the lessons and opportunities learned from the private sector to set up right from the start with a
multifunctional service offering. In addition, we are increasingly seeing multifunctional organizations
that include more “non-traditional” functions like supply chain, real estate, marketing, and legal services.
So why is “multifunctional” getting so much attention?
Mainly, because shifting beyond “single-function” Shared
Services really allows the model to ramp up its scale and
capability, and leverage synergies related to location, staff,
governance, delivery and – crucially – customer experience.
It is a case of one plus one equaling more than two; or, the
impact of the sum being greater than its constituent parts.
In a multifunctional Shared Services model, different
functional silos are brought under one reporting, governance
and Customer Interaction Framework (CIF) structure.
While the different functions do not necessarily have to
be co-located, this is preferable, especially where this can
drive labor arbitrage, improved management oversight
and control, and further opportunities for standardization
and economies of sale. Not least important is the fact that
the customer is presented with “one face” and a unified
Shifting to multifunctional Shared Services implies a
‘portfolio’ type of thinking that makes the most of synergies,
leverages management, and takes a more holistic view
to supporting the business. Multifunctional services are
generally considered more strategic. Therefore, whereas
traditional, single-function Shared Services tend to be led
by a “Head” of Shared Services (sometimes at Director or
Senior Director level), multifunctional SSOs are often led by
a more senior person – often at Vice President or GM level.
While Shared Services that were set up in the 1990s and
early 2000s generally launched with a single function
(often Finance or HR sub-processes that were considered
transactional and “low risk”), once established and the
concept proven, enterprises would often “bolt on” additional
service lines. This resulted in a more evolutionary,
piecemeal shift to multifunction than a “big bang” approach.
There are pros and cons to each way forward, but as
the model becomes more established we see more and
more institutions, especially in the public sector, taking
on multifunctional launches from the start. While the
change management required may prove more challenging
in these cases (you’re dealing with not one, but two or
more functional leaders fighting to keep hold of what they
perceive as their power base), the promise of a more unified,
robust, enterprise-wide services strategy carries a lot of
weight, especially as the model has proven its worth many
times over. It is important to remember, however, that just
running multiple functions within one Shared Services model
is not the same as having a multifunctional Shared Services
Organization. If the functions run independently of each
other, without leveraging synergies or process ownership,
you run the risk of replicating the kind of silo operation that
Shared Services is supposed to counter. Instead, aim for an
integrated approach and framework, and make the most
of synergies in technology procurement, governance and
4 | FEBUARY 2014 ARE YOU READY FOR A MULTIFUNCTIONAL SERVICE STRATEGY?
WHAT TO CONSIDER
BEFORE TAKING THE
1. Senior Executive Level Sponsorship
• A major driver or “critical success factor” for the
success of any Shared Services initiative is the level of
senior management support.
• The same is true in determining whether a single
function or multifunctional route is taken. To take a
“big bang” approach to multifunctional Shared Services
requires a great deal of executive buy in, because more
than one functional head is impacted and is required to
“buy in” to the change.
• This is why the “strategic” move to multifunctional
Shared Services is often initially driven from the top.
• The more “evolutionary” move to multifunctional
Shared Services still requires senior level executive
support, but is done at a relatively slower pace and
should have the advantage of a proven track record to
help with the plan to go multifunctional.
2. Business Readiness
• The general stability of the overall Enterprise, as well as
the stability within the functions themselves, needs to
be taken into consideration.
• The way that processes are owned and performed
today is also an important factor to consider. Are
processed standardized, automated, siloed? Are
policies and procedures centrally managed and
controlled, and are they actually followed in practice?
When considering whether to start single function (and
what processes are to be initially in-scope within that
single function) or multifunction, the current landscape
and risk profile will influence the decision. While
moving at pace and going the “big bang” route does
have advantages, one should not move faster than the
Enterprise is willing, and able, to move at.
• It is important to consider what the roles and
responsibilities for the “retained” organizations within
each function will be. There need to be clearly defined
responsibility, role profiles, and job descriptions. And
it should be clear who owns which parts of all in scope
• The overall scope, not just from a functional/process/
sub-process perspective but also from a business unit/
department/regional/country perspective, also needs
to be considered. How many business functions/
departments/countries/sites will be migrated into the
SSO, in which order and over what timeline?
• Geographically is this a regional or global
implementation? Will there be more than one center
or multiple centers? Will there be one main center and
then satellite locations providing multifunctional Shared
• Will the goal be to put everything into “Centers of
Excellence” from a process perspective, or would
there perhaps be the desire to also have “Centers of
Expertise”, which usually cover more “professional and
technical” rather than “transactional and administrative”
processes and services. Obviously, considerations
around labor arbitrage benefits, economies of scale, risk
profile, etc., come into play here.
• Are the timeframes realistic and proportional to the
number of functions that are transferring?
4. Internal Politics
• This links back to senior level executive sponsorship,
leadership, buy-in and support.
• But it is not just about senior management. There
needs to be a comprehensive understanding of internal
politics, stakeholder motivations and a clear change
management program in support of whatever direction
is decided to be taken.
• The program should be supported by a clear
understanding and communication of the core business
needs that are driving the move to multifunctional
Shared Services – e.g. cost and efficiency drivers, need
to leverage centers to support an expanding global
model, aim to remove the burden of providing these
services from the business so that they can focus on
value-adding decision and business support activities
closer to the enterprise’s external customer base, desire
for more consistent processes to support automation,
requirement for a more visible and standardized overall
control framework, etc.
5. People Management
• The relationship between the SSO and “the business”
will be key to its success. This will require a clear plan,
and focus, for the new reporting and management
structures, including ownership and hand-off along
end-to-end processes. Where the move is to a
multifunctional Shared Services organization it can
actually be easier to really consider “end-to-end”
processes, because functional silos can be broken down.
• As highlighted above, the overall change management,
communication and consultation plan on this proposed
strategic initiative will be critical.
5 | FEBUARY 2014 ARE YOU READY FOR A MULTIFUNCTIONAL SERVICE STRATEGY?
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6 | FEBUARY 2014 ARE YOU READY FOR A MULTIFUNCTIONAL SERVICE STRATEGY?
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