Are you getting maximum benefit from your shared service organisation? Has your shared service become a mundane component of day-to-day business or is it a vigorous, dynamic organisation that is continuously evolving to keep pace the changing demands of business today? Does the service quality and efficiency of your SSC compare well with that which could be delivered by an Outsource Service Provider? If you have not already considered these questions perhaps now is the time to do so.

In the main, organisations have found that shared services have not fully delivered on their initial promises. There are numerous reasons for this. Often shared services initiatives have lacked the mandate from senior management to drive standardization, migration and compliance. Sometimes it has stemmed from a lack of steadfastness to truly transform and standardize processes and systems, or to re-allocate resources. Many organisations that are only gaining incremental benefits from their existing shared services are now looking at alternative ways to rejuvenate their shared service operations. Some are looking to combine shared services with outsourcing to provide the needed leverage. Over the last couple of years, the number of F&A BPO engagements being signed has shown a rapid rate of increase. Outsourcing has become an accepted strategy. With more capable service providers on the market, companies have more choices in the functions they outsource and the operating models that they adopt.

So, if you are not looking to improve the efficiency and effectiveness of your shared service operation you should ask yourself whether you can afford to be complacent. With the efficiency gains that Outsource service providers can now provide, the threat of being outsourced can't be too far away. So don't bury your head in the sand. Compete with the external service provider. Become and "Internal Outsourcer"

Overhaul your shared service operation and move from being merely a centralized function through to being an automated centre of excellence focused on customer service. By modelling yourself on an Outsourced operation you can become an "Internal Outsourcer".

Incorporate the best features of an external service providers to ensure that your in-house operations will provide your customers with at least as good a deal as they could get from an external service provider.

1. The SSC operates as a separate legal entity responsible for its own profit and with incentives for growth. The SSC Leader reports to the Board in the same way as Business Unit Leaders.
   
   
2. A clear governance structure is in place, with clear roles, responsibilities defined and a well established process for handling requests and issues.
   
   
3. The service delivery is guided by a Statement of Work, which clearly defines the core tasks to be completed (frequency, output format etc.). Scope additions are handled through a charging mechanism via a structured change management approach. The change management approach will include monthly reviews of upcoming projects and changes which are negotiated and prioritised between Business Units and SSC.
   
   
4. The charging mechanism is based on the resource units consumed. Service unit costs are set by contract and reduce over time to incentivise continuous improvement.
   
   
5. The shared service operation is focused on customer satisfaction. Performance metrics that measure both cost and quality of service are measured and reported.
   
   
6. An effective performance management framework is in place for ensuring that management take responsibility for their functions and for driving continuous improvement. KPIs reflect both the key priorities of the SSC and the most recent best practice in the industry.
   
   
7. Continuous improvement is embedded in the daily work of all SSC employees. Contribution to continuous improvement initiatives is a key element of their performance evaluation.
   
   
8. The operation of the SSC is constantly reviewed to ensure that it takes advantage of technology advancements and recent developments in best practice. Technologies which drive profitability are funded from SSC revenues. Recent advancements in technology have meant that 'Lights out Processing', (where an organisation's transaction processes are automated to the extent of needing no manual intervention), is on the horizon. Standardised and better integrated EA systems, increased use of OCR, scanning, workflow and business to business integration through EDI and XML, and Web enabled self service are just some of the technology enablers.
   
   
9. A focus on service delivery is maintained through specific SLAs which are designed to measure the most important outputs of the SSC both in terms of service efficiency and quality. The SSC will be free to decide how to deliver, provided it delivers within the parameters of the SLA. Financial penalties will incurred by the SSC if SLAs are not met. Equally, OLAs will lay down the inputs required from the business units and their adherence to the established OLAs measured.

As the pressure on organisations to improve efficiency and reduce cost of back office support functions continues, shared services will remain high on the corporate agenda. With Outsourcing getting more established and gathering momentum it won't be long before your CEO / CFO asks the question: should we outsource? So protect yourself from this threat by demonstrating that your shared services organisation is already delivering maximum benefit.

Taking the additional leap to achieve outstanding results needs an injection of inspiration and determination. You need to examine all aspects of your existing SSC operation from process efficiency to performance management, from organisation structure and governance model to SLAs. So, how do you get started?

1. Review your strategy. Ensure that it is still relevant for your business going forward, thus keeping you at the cutting edge. Ensure that the goals and objectives of the SSC organisation is aligned with the organisation's strategic objectives.
   
   
2. Conduct a customer survey. Find out what your customers really think of you. Do they think that they are receiving a high quality service? Are you adding value?
   
   
3. Conduct a 'Health Check' of your shared service operation: process design, technology infrastructure, governance model, organisation structure, performance management framework, location.
   
   
4. Benchmark yourself against other best practice organisations to assess the gap.
   
   
5. Develop solution options that will enable you to close the gap and build a business case.

Don't wait until it is too late. Start your journey to becoming an 'Internal Outsourcer'. Defy the threat of outsourcing by taking action now.

Elaine Harrison is a Senior Manager with Alsbridge plc, the independent advisors on outsourcing, shared services and offshoring. Elaine can be contacted at elaine.harrison@alsbridge.eu or on +44 (0)20 7242 0666.