To share or not to share

To Share or Not to Share, That is the Question: Three Considerations before Sharing Services

If you are a part of a large (or growing) organization, you’re probably interested in leveraging your human capital across multiple business units, divisions, regions, or brands. In a relatively short amount of time, shared services have proven to be a popular way for companies to reduce costs, improve customer service, and increase process effectiveness. In fact, in 2011 89% of global executives reported that they thought sharing services was a strategic choice for their business.1 Yet, these benefits have only become truly feasible in the last few years thanks to advances in business applications and information systems.

With so many advantages to implementing shared services, it may be tempting to get started right away. Before you start consolidating divisions left and right, here are few things to think about to make sure you take full advantage of shared services in your organization:

First, you should define which functions can be shared across your organization. A good place to start is internally facing functions like financials, human resources, information technology, etc. Even in a very diverse organization, these areas are most likely to have enough similarities in methodology and practice that shared services could be easily implemented.

The next thing to think about is creating clear definitions of organizational hierarchy and boundaries. Who can have access to which data? What kind of security settings are required? Can business workflows be directed to shared services for approvals? Taking time to lay out the ground rules and access permissions now could save a great deal of pain later.

Speaking of hierarchies and boundaries, this brings up the most important question. Can your business systems run both shared and segmented functions under a single platform? Shared services personnel won’t be as effective if they’re asked to jump from one application to the next to complete daily operations.

It’s clear that shared services are here to stay, but it’s also not something to rush into. Just imagine how many integrations, security setups, workflow modelings, and data synchronizations must be developed and configured to make shared services work! It’s pretty easy to see why a comprehensive IT strategy must be developed first to realize all the benefits of shared services in the long run.

If you do decide to go the shared services route, it’s worth mentioning that Microsoft Dynamics AX is particularly well suited to handling shared services. For example, take a look at the screen below (Click the image if you’d like to see a bigger version.) shared-services
In this view each shared service is clearly defined and is treated like any other organizational structure.

Whether you already have shared services or are thinking about implementing them in your company, it’s always a good idea to make sure you clearly define the functions of your services, set appropriate boundaries, and, ideally, run them under a single platform like Microsoft Dynamics AX.

1 The Shared Services and Outsourcing Revolution is Here, Shared Services and Outsourcing Network, 2011.

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