Starting situation – complexity of the SSC set-up cancels out efficiency gains
An international telecommunications company had already decided to set up a shared service center, but because of a lack of implementation skills, this had not yet been implemented. The company was unsure of what factors it needed to take into consideration in order to actually achieve the expected gains in efficiency from outsourcing business processes. In particular, there was much discussion concerning the questions of location and operational model, as well as process security during the transition phase. As a result, buy in from the operational units was low right from the start of the project.
Project approach – using forceful arguments to secure acceptance
The central task was to evaluate the location options for the shared service center. For one thing, it was necessary to compare the increased profitability with the estimated cost resulting from severance payouts and relocating staff. Choosing suitable benchmarks and performing detailed analyses of the costs during the transition phase and during ongoing operation, taking into account different location and operational scenarios, formed the basis for a well-founded, quantitative business case. The choice of the activities to be carried out at the SSC was validated by means of a process analysis. Providing an implementation roadmap, including temporary duplication of roles, and drawing up contingency plans helped promote acceptance of the changes among the management staff. The efficient management of the center was assured by means of SLAs based on KPIs. However, in order to obtain broad-based support within the company and from the public, it was essential to soften the consequences of the restructuring by providing an internal job market and assuring timely communication. This combination of qualitative and quantitative arguments brought about a clear decision, with the required internal commitment, and made successful implementation possible.
Finding – setting up an SSC needs to be finely calculated and carefully implemented
Companies often pursue SSC concepts with the sole aim of reducing costs. However, if things are done properly, setting up an SSC can also lead to significant improvements in quality. The companies that succeed in this are those which master the change process, and which take their employees with them on the journey.
- Location and provider options evaluated for the set-up of an SSC landscape.
- Business processes restructured, and transactional activities bundled into SSCs.
- Instruments created to ensure ongoing, successful management of the centers.