Key Architectural Design Issues

When setting up a shared service centre, a lot of thought needs to be given to the following areas:

• Determine a clear case for creating shared services that is based on the value-added to the business. How will shared services help the organisation manage its business more effectively? Decisions about whether a shared service environment is appropriate need to reflect a full stakeholder perspective — including leaders in individual business units, trade unions and employees.
• Review and redevelop HR processes. How do we organise our HR processes to most effectively deliver the service our customers expect? Simply pulling processes together in a central hub is unlikely to deliver a more streamlined, customer-driven service. Moving to a shared service provision requires a fundamental re-engineering of HR processes.
• Explore options for the structure of the shared service centre. How can the centre most effectively be structured to deliver its business objectives? Multinational organisations need to decide whether the shared service is most effectively delivered a number of centres based on, for example, business groups, regions or a global shared service. A key factor in helping managers to make this decision is the number of people employed in the operating countries. For example, Standard Chartered Bank introduced their shared service centre on a global basis, despite the company having a large geographical spread, because the numbers of people employed in each of the countries was relatively small. Others, for example, IBM, introduced their shared services on a regional basis, or in the countries where they have the largest numbers of employees, as in the case of PricewaterhouseCoopers. National Grid, which has major operations in the United Kingdom and the United States, designed a model described in Box 8.1.
  Box : National grid shared services

  ---

  An example of how an FTSE 20 company has evolved its shared services to meet changing business requirements is found in National Grid. In a move to bring clarity over each core people process from strategy/policy to administration, National Grid implemented a 'deep' shared services model. This model incorporated specialists into the shared services structure from areas such as resourcing, L&D and ER.
  Since then, National Grid has set out a business strategy aimed at standardising policy and ways of working across its UK and US businesses as a whole. For HR it was decided that this would be best achieved by giving senior specialists Centres of Expertise roles outside of shared services with global rather than regional remits. As a result, regional shared services now focus on process excellence and transactional execution. This aligns with the broader business strategy of standardising processes where possible and creating a global approach to policy and thinking, whilst still allowing regional execution. This evolution of the shared services model has also allowed National Grid to revisit where responsibilities lie for what they term 'professional delivery' — areas such as graduate recruitment, technical training and professional recruitment — and to determine where the demarcation line is best set in terms of CoE or Shared Services responsibility.

  ---

  
  
• Clarify the role, responsibilities and accountabilities of the HR shared service centre. The content and scope of the HR shared services centre can vary between organisations, but they largely fall into two types: (1) basic administration of, for example, relocation services, maternity leave and recruitment services and (2) providing specialist information and guidance to employees and managers on HR policy and practice and employment law. The centre may also offer pooled internal consultancy and project support.
• Clarify and communicate the role and responsibilities of the customers (e.g., line managers). If the shared service centre model will require them to act differently (which it is likely to, for example, through the introduction of Web-based self-service), they must be given the appropriate support.
• Agree on performance indicators to ensure the services are being delivered to plan by using, for example, service-level agreements and a performance management framework to measure the effectiveness of the service delivery.
• Specify the scale of capital and the nature of the resources required to get the right technology and organisation infrastructure in place. Don't underestimate!