In our last Blog we spoke about the issues that drive the services produced by a shared services group. We talked about six issues that define the functions, cost and billing of shared services. Today, we’re going to take the next step and develop a plan for improving your shared service. While each of you may run different services, and as the saying goes “your mileage may vary,” we can quickly put together some options that you can all use to develop your plan for improving a shared service. Assuming that you reviewed the last blog (if not, read “PMO Basics:  Six Secrets For Managing A Shared Service), and now you have a handle on the basic “levers” of your operations, lets now dive into the details to find solutions and projects for improvement.   

RE-BASELINE: Have the needs of your clients changed since your service was introduced? How often do you survey your clients (or hold governance meetings, etc.) to keep your services tracked to the needs of your clients? If you haven’t done so yet, you need to survey your client base and collect the information you need to develop a 3-5 year plan for your service. You also need to institute annual client reviews where you review the events of the year with clients (changes in volume, requests for new types of services, costs and service levels, etc.) and the client can provide you with information on service needs for the coming year.  Be prepared for the occasional retirement of old services as well as demand for new services.

PRIMARY & SECONDARY CLIENTS: Does the information you’ve collected so far tell you anything about changes in your client base over the coming years? While this is just a model and the parameters will undoubtedly change (for ex.: new business groups may arise that could become clients), it is far easier to update a business plan than to manage a service without knowing where you will be next year or the year after. If you have one or two predominant clients, they will (and should) dominate your planning process. Identifying your top-tier  clients (however you define them) helps you to sort out the feedback you get from your client base throughout the year. For example, you may have one client that wants dramatic changes your model, but only consumes 1% of your services’ another client may consume 60% of your services and wants no changes. You have to decide how your model works, but in most cases the dominant client has a larger say in how your service will work.

BUSINESS MODEL: If you’ve grappled with your client’s business models, now you need to grapple with your own business model. Take the data you’ve collected from clients, plus information about your own business parameters (you may have limits on how large you can grow, what you can charge, which services you can offer, etc.) and create a 3-5 year business plan. This plan should cover the basic map of your future… which client groups will grow and shrink, your need for personnel and space, and any expected impact from technology (elimination of services, lowering of costs, etc.). What happens when you have clients with conflicting needs? …

SERVICE AGREEMENTS: One size does not fit all! Once again, you have to decide what your business model is. In some cases your organization may only want you to offer one flavor of service. However, if you have any latitude consider the following based on how external services deal with shared service clients. When you begin customization within a shared service you need to plan carefully. A completely customizable service may also be unusable, but an overly customized service can quickly become too expensive and too error prone. Think about each of these features carefully, but here are some options…

• Service Level: In commercial services, it is understood that a shared service has a slightly higher error rate and less productivity due to more standards to train against and more SLA’s to meet. If the client has exceptionally low tolerance for errors or has other needs that require a dedicated service, it is possible to run dedicated staff within a shared service. Always ensure that the service is carefully dedicated. Does the client just want dedicated staff, or do they require separate physical space? There is a wide range of options, so you need to be very clear with the client as to what they need and IF you can support that need.
• Basic vs. Premium: Within your general service cost you may prove “premium” services that not all clients need. For example, if most clients want support from 9am to 5pm, but a few want late night or weekend support, you might want to carve out this function and bill it as a premium service. Be careful that you DON’T create so large a list of options that clients feel that you are “nickel and diming” them, but DO identify the few options that are driving your cost of operation and charge for them separately. Let clients vote with their wallets to determine how many premium services are needed.
• Buybacks:  If you do charge clients directly, they may complain about carrying staff when there is no work to do. Previously, you carried these costs, and this unused capacity drove up your costs. You might share these costs by buying back unused capacity from this client… if that is not a security conflict (did they need a dedicated team because of data security?). Assuming no conflicts, every moth this client would get a credit for any time that you could use their team for other work. Please remember that this model is more difficult to manage and won’t work for everyone. But if it does work, it can solve a common shared service problem.

MANAGEMENT REPORTS: You need to be sure that the monthly report uses the correct metrics and tracks them accurately.

• Reports: Develop a standard report that covers quality (errors), speed (meeting deadlines), unit cost (resources needed per job), and type of service used (if you provide multiple services).
• Resources: Try to keep these reports as similar as possible, and keep an eye on the cost of reporting. The purpose of a management report is not to provide every possible metric, but to answer the questions: “Are we meeting our service level agreements?” and “Which of these metrics need to be improved or changed?” You want to be sure that most of your operating costs go towards production, not administration.
• Common Coin: one other consideration is that your reports use a “common coin” for reporting the use of resources. The best coin might be an hour of worker time (if different workers have vastly different costs, this may need to be adjusted). The reason for this is to be able to estimate your capacity for work. Let’s assume that one function costs 1 coin and other costs half a coin (and other functions have other costs), you can easily compare unused resources expected client workloads. This  common coin method allows you to more accurately staff your service without too many or too few resources.

SECURITY: When you have workers in a shared environment, there can be issues with the security and privacy of client data.

• Paper Management: Make sure that you have a policy for controlling  the movement of paper in and out of your shared area. You should have locked bins to put print outs into, which are hauled away and he contents destroyed every day. People should not have the ability to move paper into and out of the shared space.
• Screen Viewing: A person working for one client shouldn’t read the contents of a screen with another client’s data.  There are films that can be applied to a computer screen that makes it difficult for anyone other than the person directly in front of the screen to read. Use these!
• Physical Access: In addition to your own workers, clients may come into or near your work space. You want to take precautions to ensure that putting these clients into contact with each other does not create a security risk. If so, you may need to control their access, have separate entrances, etc. You should also keep logs of who enters and leaves to address any issues of security in the room.
• Data Devices: The bane of shared services is the ubiquity of thumb drives, smart phones, laptops and other devices with data-storage  devices that might allow your workers to copy data and take it out of the work area. You can limit what they bring into the work space, but unless you have body scanners and physically check every knapsack, its’ difficult to control. An alternative is to turn off the USB ports on all of your computers (all of these devices connect via the USB). Without a USB connection, these data devices cannot remove any data.

When you are responsible for managing a shared service, there are always more details to consider. However, if you develop a shared service that addresses these six issue areas you’re on your way to creating a world-class  service. Every service is different, and every internal service has constraints on what you can and can’t do. But if you think through your service, understand the needs of your clients and keep your operations transparent you can deliver the best possible service within those constraints. And that’s my Niccolls worth for today!