After the Go-live: Ten focus areas for effective Shared Service delivery - Part 3 - Standardize and Optimize Processes

/

Note: This is the third post in a series focusing on the continuous improvement of Shared Services. You can read Parts 1 and 2 here.

3.  Standardize and Optimize Processes

Processes should be standardized as they are transferred from the Business Units to the Shared Service Organization.  However, even under the best of circumstances there will still be more work to do.   Once the processes are actually being serviced from the SSO, additional opportunities to standardize the processes will be identified.  Additionally, opportunities to optimize the processes to enhance service delivery and reduce costs through the elimination of non-value added activities should also be identified.  If processes were not transformed as part of the shift to a Shared Service Organization but were part of a "Lift and Shift" strategy, then the SSO really has work to standardize the disparate processes transferred from the Business Units.

One framework for evaluating and improving processes is Six Sigma.  Pioneered by GE and other organizations, Six Sigma uses the DMAIC methodology to either create standard processes or optimize existing processes.  DMAIC can be broken down as follows:

  1. Define- This initial stage focuses on defining the customer of the process, their business requirements for the process, and the decomposing the actual process into individual activities along with the organizational titles responsible for each step (e.g. Accounts Payable processing).
  2. Measure- This stage creates a measurement dashboard that incorporates both effectiveness and efficiency measures (e.g. processing error rates and invoices processed per FTE per annum).
  3. Analyze -  This stage analyzes the processes in detail to understand the root causes of inefficiencies and bottlenecks.
  4. Improve- This stage focuses on the development and execution of initiatives that are designed to address the inefficiencies identified in the previous stage.
  5. Control - This stage maintains the controls necessary to maintain the process improvements over time.

Ideally this framework would be employed as part of the design process prior to transferring the processes to the Shared Service Organization.  However, even if there is standardization of processes as part of a "Transform and Shift" strategy, there will inevitably be opportunities for improvement once the processes are up and running in the Shared Service Organization.