Can you still drive benefit once the dust has settled?
Transformation programmes in the back-office are tough. They run for several years at high intensity which, over time, leads to change fatigue and value erosion. Taking the opportunity to review progress both during and after delivery can help you keep on track.
The two- to three-year window is a critical time to test and review the progress of your programme and business case. By this point much will have been delivered, initial goals will have been met and teams will be proud, if a bit weary.
But in equal measure there will be plenty still to do and areas which have not delivered as expected. Additionally, there may be the opportunity to drive greater benefits and even advance to another level of maturity.
The current climate means that there is, and will continue to be, an increasing focus on cost management. This means ensuring a full return on the investment already made and looking for new ways to optimise existing operations.
With that in mind, here are five actions. Whether your transformation is within a single function or across your entire back-office and whether you have all or some components of business partnering, global business services, centres of excellence, shared services, outsourcing or automation; these actions will apply. They will help you identify pain – and gain – points throughout the programme and, especially, once the dust has settled.
1. Review scope splits: are you losing scale benefits?
It’s not unusual for the line to move once transition begins. As FTE numbers in a business case become real, caution creeps in and roles that could be transferred are retained. This results in business case erosion where scale benefits are lost; inconsistency reduces consolidation and the retained organisation is unable to release capacity to do other things.
Once transitions are complete and stabilised, confidence rises and this is the time to review your scope and maximise scale.
Two different media organisations that I worked with found significant differences between divisions, when comparing planned and actual scope transferred to their BPO partner. In one case as much as half of the planned activity had been retained rather than transitioned. It was all down to levels of confidence in the BPO provider during the transition period. Once services were stabilised, confidence was higher and they were able to ‘level up’ and get a consistent scope across divisions. This in turn improved the benefits realised, increased confidence and created new opportunities to broaden the BPO scope across the whole organisation.
2. Look at governance: is it working?
Attendance at governance meetings is known to wane once business as usual kicks in. A stable operation brings fewer critical issues meaning there is little to talk about and so attendance gets delegated sometimes two or three levels below the original intent. This means you don’t have the right people in the right place to make key decisions and drive benefits.
I conducted a governance review for a consumer products company and found a clear correlation between service satisfaction and overall engagement. Divisions that were actively engaged in governance were happy with service and beating their business case. The opposite was true in other divisions.
A refresh of the shared services governance structure was needed – the initial design was no longer working and a more mature model was required. We started with refreshing the agenda, including the management information provided, and then looked at frequency and attendance. Engaging with the division leads through the refresh meant the new governance model became more relevant, with the right people, making the right decisions and at a pace that allowed progress.
3. Check your service levels: is there too much green?
Service Level Agreements (SLAs) are a pain and gain point in their own right. Too many and you create a cottage industry of measurement, too few and actions and issues are left unresolved. After all, what gets measured gets done.
Looking beyond the overall achievement rate can identify areas of opportunity: too much green isn’t necessarily a good thing. It can indicate the target level is too low; that there is capacity within the team; or there is a gap in the service between what is reported and what is perceived.
Tackling the gap between the service reported and perceived is best managed through governance, but looking at the targets and the resources can yield further business case benefits.
Overstaffing teams during the early phases of transformation is a good way to ensure continuity of service but this situation can quickly become over comfortable. When combined with a desire to meet and exceed SLAs, headcount levels creep above the plan, eroding savings.
Try taking a more mature approach: look at your service levels to identify what is ‘good enough’ rather than what is ‘desired’. This will create space to improve productivity and keep benefits on track.
4. Test your ways of working: are they consistent?
When a transition has been delivered at pace often consolidation opportunities are incomplete. This is particularly true in a delivery model that includes teams across outsourcing, captive shared service centres, centres of excellence and/or retained in the business.
The nature of the work is different and the closer the activity needs to be to the business the more localised the work will become. But consistent ways of working can still be applied.
In developing a business services organisation for a professional services company, we applied the same service outcome approach to all parts of the organisation. Key performance indicators (KPIs) were focused on outcomes, the end to end processes provided the backbone and each team and team member understood their role in delivering those outcomes.
Applying consistent ways of working – from consistent KPIs, to common daily routines – across all parts of the back-office will improve efficiency, drive maturity and improve business outcomes for the whole organisation.
5. Invest in capability: are your business partners empowered?
The role of business partners changes following a transformation programme. In many cases, prior to transformation, they had a mixed role involving transactional work, reporting, analysis as well as advice and insight. Often bandwidth is limited and the time for advice and insight is constrained.
This means that once a function has been restructured – with outsourcing, shared services and/or centres of excellence performing most of the day to day work – business partners are left unsure what to do.
In discussing transformation with several diverse clients – including a drinks bottling company, a media company and a government department – there has been a common theme: how do we upskill our business partners?
My advice is to start by ensuring your business partners understand the business strategy and their role in helping your organisation achieve it. Then it’s about broadening their skillset beyond their technical capability. I believe that all business partners need interpersonal, problem solving and solutioning skills. When they’re able to engage in a discussion about a business problem and provide insight and advice to resolve it, then they will be true business partners.
The overall question that comes out of these actions is: is there a time when a transformation is ever really complete? There will be moments when the dust settles and a sense of comfort kicks in – this is exactly the time to review and challenge to keep your benefits on track.
About
Joanna Page is a Managing Director at Selida. She is a recognised, and industry awarded, leader with more than 18-years’ consulting experience across Business Process Outsourcing, Shared Services and Global Business Services.
