Anyone work in an organization that leverages shared services?

N2IT

I've worked with several in the past, usually consolidating HR with IT.

Anyone experiencing this and if so what's your thoughts? I understand the concepts of Shared Services and Outsourcing (SSO), but was wondering your thoughts. I was also wondering if you seen any other variations of this business model.

blargoe

I've had mixed experiences.

The company I recently left had consolidated global HR functions such as benefits and payroll into our parent company a few years back. At some point, a push toward IT Shared Services was made. All 23 child companies had to eventually standardize ISPs to one of two options (depending on their geographic location) and join the enterprise MPLS. Also, software and hardware contracts were all rolled up to the parent with the child companies existing as riders... Standardized on Dell hardware everywhere. Those projects went pretty well, other than local IT in some cases being extremely upset that they could no longer use HP or Lenovo laptops.

Then, enterprise messaging (email, IM, mobile, etc) was selected as the next target for shared services. That project was and still is an unmitigated disaster. It kicked off over two years ago, and they still have only successfully migrated the parent company and part of my old company, which was stupid enough to go along with being in the pilot group. Politics, broken promises by management and vendors, disinformation, people being promoted way past their level of competence all contributed to making that project a failure.

For commodity services like messaging, it makes a lot of sense to have it hosted in one place if you are responsible for multiple companies. Lots of wasted resources if you have 20 companies doing it 20 different ways.

the_Grinch

In my experience it has never gone well. We've worked with a company who would buy up small medical facilities and bring them into their fold. They would look at the equipment and say "make it work." Dells way past warranty, sub-par internet connection (this company would send image files to a central server), and POTS telephone lines when the rest of the company was VOIP. All about a solid project plan, proper testing, proper phasing, and proper funding. Also, understanding management that is aware of the risks and bumps in the road that are involved.

paul78

I'm actually a big proponent of shared services. But it's not a one-size fits all.

Generally speaking, the organizaton needs to be of sufficient size where scale actually outweighs the additional overhead to support such a model. Where I work, we do couple shared-services while attempting to labor arbitrage certain functions. There are always functions which do make sense from a shared-service model. Engineering is one where I think a standardized platform offering to the internal businesses can pay off.

Other functions IT functions like certain operational support functions which may be business specific may be better off not being consolidated. But at the same time - having too many-like functions in different internal businesses could lead to inconsistencies and the corporation as a whole may appear fragmented to it's customers. One way to solve that may be to use a matrixed approach where you could have a centralized corporate function like HR or Legal but certain key functions are cross-matrixed directly into the line-of-business that they support.

One other way is to treat the shared-services by the internal businesses as internal vendors with formal SLAs and oversight. Where I work, that's actually part of my job. I deal with some of the shared-service organizations that support my line-of-business. It's overhead to the corporation but the dollars do work as as being more cost-efficient.