IMA's Implementing Organizational Changes at Speed Blog

Shared Services: A Transformational Change or Pie in the Sky?

Posted by Paula Alsher on Tue, Jul 17, 2012 @ 05:24 PM

Shared services models continue to attract a lot of attention-- but like any transformational change shared services is fraught with the same types of challenges other "one company" solutions confront. 

What's especially surprising is that organizations attempt to implement a shared services model without a common implementation framework.  If you are "beginning with the end in mind" you must model the end-state in the way in which you implement.  That means that individual workstreams should be following a single best-practice change management methodology so there is one vocabulary, a common set of deliverables, etc. 

The "business case" for consolidating non-core functions into one centralized organization with streamlined processes is extremely attractive as a way to increase efficiency and reduce operating expenses.  Like other transformational changes, shared services is justshared services can be pie in the sky "pie in the sky" unless implemented with the end-goal of benefit realization, not just installation.  Since shared services is highly disruptive, you can anticipate lots of resistance to change and other significant barriers, including:

  • Poor scope or project definition-- what is in, what is out; changing role definitions; etc. for the shared services implementation
  • Poor implementation history leading to lack of faith in the ability of management to do what is necessary to pull the shared services implementation off for the long haul
  • Ineffective sponsorship for the shared services implementation; not a primary focus for senior leaders and the implementation is given lip-service but not the level of visible commitment required 
  • Weak motivation for the change.  Is this really about improving service levels or just another cost-containment strategy?
  • Lack of cultural fit (culture is extremely powerful, so if the shared services implementation is inconsistent with the culture, the culture will win!)  For example, is there a culture where leaders are reinforced for protecting their turf or is the culture risk-averse?  If so, shared services will be counter to your culture
  • Ineffective communication planning for the shared services implementation (substance, variety of delivery methods, messages targeted to audience versus top-down communications one size fits all)
  • Reinforcements that are aligned with the old operating model

Here are some things to be aware of from a shared services implementation perspective:
1.  You can expect to have a lot of resistance to the business change, even if it is entirely logical from a business perspective. This will be especially true in the ranks of middle managers and directors who will be giving up their power base

2.  For many organizations, it is extremely challenging to implement across the organizational structure's vertical columns and overcome the existing power structures-- it is the paradox of enterprise-wide change

To be successful in implementing a shared services model, you must have:

1.  A well-defined business case for action that clearly lays out the motivation for this change, and what it will mean (, anticipated impacts) for each of the target audiences

2.  Clear performance measures for service levels and a process in place for ongoing measurement.  The more often you measure, with implementation-specific reinforcements attached, the faster you can go

3. A plan for building the required sponsorship in all the areas impacted by the shared services implementation

4. A communication strategy that relies heavily on face-to-face communication, with messaging designed in the "frame of reference" for targets of the shared services implementation

5. Reinforcements that are aligned with the desired business outcomes and behavior change, including reinforcing senior level sponsors for shared versus individual outcomes

The "human side" of shared services implementations are complex, so there is great value in having a single vocabulary and implementation method like the AIM (Accelerating Implementation Methodology) that serves as the foundation of the implementation.

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Tags: Sponsorship, Transformational Change, Culture, Resistance to change, Shared Services