The Secret to Success for a Shared Services Implementation

Posted by Paula Alsher on Thu, Oct 12, 2017 @ 11:17 AM

The concept of Shared Services certainly isn’t a new one. It’s been a popular business structure since the 1980’s. But, even now in 2017, the number of organizations transitioning to a Shared Services model continues to rise. Why? Because the model makes simple, economic sense. If you centralize administrative functions and share them between business units, you will standardize processes, eliminate redundancies and ultimately reduce costs. Sounds easy, right? Shared Services:  Secrets to Success

Not so fast. Here’s a little secret from our expert Change Management Consultants…transitioning to a Shared Services model is not a simple one and done. It is transformational change. And in order to reach full value optimization it needs to be treated as such.

Shared Services is Transformational Change

A transition to Shared Services is frame-breaking, meaning it will completely alter the current operating structure, including massive changes to processes, people and technology. It cannot be done incrementally and can’t be made totally safe.

Change is hard enough when it is within existing vertical power structures. But when you are looking at a Shared Services implementation you are going to have to implement cross-functionally across siloed business units, making things excruciatingly more complex.

So, how can your organization take control of an extreme, enterprise-wide change such as this? It may seem daunting, but the answer is actually relatively simple. Full adoption and sustained change at speed requires a disciplined, rigorous approach to managing the human side of the initiative {Tweet This}.

Five Steps to Implementation Success

The Accelerating Implementation Methodology (AIM) is a flexible and business-disciplined change management methodology that can help you implement an enterprise-wide change such as Shared Services. Below you will find 5 steps from AIM that will help.

Step 1: Understand the Difference between Installation vs. Implementation

To increase the likelihood of implementation success, organizations must adopt an “implementation mindset,” meaning the following 5 metrics must be used to define success:

  • On Time
  • On Budget
  • All Technical Objectives Met
  • All Business Objectives Met
  • All Human Objectives Met

Ensuring the business and human objectives are met is the difference between installation and implementation. For example, it would be easy to consider a Shared Services implementation successful when the systems are up and running, the new processes are communicated, and the restructuring has taken place. But, these accomplishments are reflections of an initiative that has been successfully installed, which is important. But installation is not enough!

To get to implementation and full benefit realization, you need to make sure sustained behavior change has occurred. No behavior change, no implementation. It’s a simple, but profound statement about the criticality of the human side of business projects.

Step 2: Define the Change in Terms of Human Behavior

In order to properly define a change, you need to identify the behavior gap between the current state and the future state. In other words, what are people doing now and how should they behave after the change? Your definition should include:

  • What is changing
  • Why you are changing
  • What are the consequences for not changing
  • How success will be measured

These questions must be translated into the Frame of Reference for every work group impacted by the change. This means that the Definition of the Change (what we call the Business Case for Action) is a living, breathing document that is used, modified, and updated through the project lifecycle.

Step 3: Generate a Cascade of Committed Sponsors

Every manager with direct reports impacted by the change must Express, Model, and Reinforce their personal and collective commitment to the change. This level-by-level cascade of demonstrated Sponsorship is the single most important factor in successful transformational change.

Step 4: Take Steps to Overcome a Silo Culture

But, if each Sponsor believes his organization is “special and unique,” and requires a customized solution to what is supposed to be a unified change you will never achieve the full impact and cost benefits of Shared Services.

Getting Sponsors aligned across these silos is the key to a successful transformation. There are 3 requirements for overcoming a silo culture:

  1. Leaders must be reinforced together for the success of the whole program. No one is successful unless all are successful
  2. Leaders have to agree on how important this change is in regards to the change agenda and the desired outcomes for the change
  3. Leaders need to acknowledge and reinforce the inter-dependencies between each silo

Step 5: Put the Right Reinforcements in Place

Reinforcement is your organization’s most powerful tool in order to get people to change their behavior. There is a fundamental principle of human behavior that states, “People follow reinforcement.” That's why Don Harrison, developer of the AIM Methodology teaches in our change management training programs that, "Every time you see a behavior, there either is or was a reward for it."

But remember, reinforcement management is less about the formal compensation and performance management systems, and much more about the daily interaction between a Sponsor and his or her direct reports. Sponsors are reinforcing behavior, consciously, or sub-consciously, every single day, through application of positive rewards and negative consequences. They can either reinforce “staying the same,” or they can reinforce “change” by their own actions.

Undergoing a transformational change such as Shared Services requires a predictable set of activities for the human elements of the change. By following a repeatable change process like the Accelerating Implementation Methodology (AIM), you will minimize business disruption, increase the speed of implementation, and manage the cultural and organizational risks that are always present. It’s the secret to a successful transformation.

Free eBook: Overcome the Challenge of Transformational Change

Topics: Transformational Change, Change Management Methodology, Accelerating Implementation Methodology (AIM), Enterprise-wide Change, Shared Services