13 Lessons from Shared Services Implementations

Shared services provide an opportunity to cut costs, improve service and consolidate staffing levels. Now that you’ve decided to embark upon the journey, how do you achieve your goals and launch a successful operation? How do you avoid making costly mistakes and the potential risk of failure of an operation that took a lot of time and effort to stand up?

Avoid these key missteps by learning from others who have already forged down this path and learned the hard way. Although many challenges may exist, these 13 lessons learned from successful implementations will help steer you down the right path when establishing your HR shared services. Here are the common challenges many organizations face:

1. Obtaining and Maintaining Executive Support

Innovators must develop strong executive support upfront and throughout the project. Success requires education, planning, assessment, and specific actions to gain and maintain that support. You should understand and evaluate stakeholder positions to guarantee executive support is available, counteract undermining activities, and fast-track the project through the layers of bureaucracy.

2. Forming the Right Team

The right project team can make or break implementation and operations. Team members must be able translate knowledge and related experience into a structured approach for their respective project sub-teams.

3. Developing a Workable Plan

A thorough plan is essential; however, planning must be flexible and iterative to achieve success.
Business case: Plan and execute a carefully thought out business case, addressing all elements of the implementation, and clearly analyze and document baseline results for ongoing reference.
Palatable approach: Overall project phasing must be reasonable to achieve early benefits and not exceed available resources. Objectives must be analyzed to ensure clarity on project tasks, deliverables, resource assignments, and timing.
4. Overcoming Resource Constraints

Overlapping project demands can negatively impact your implementation schedule, budget, and resources.
Human resources: Top functional and technical resources are in high demand and often have limited availability due to current job responsibilities and special projects. Coordinating and collaborating with other organizations and project teams to understand existing and planned projects, identify potential competing priorities, and manage new issues will help lead to a successful implementation.
Investment affordability: Many organizations are dealing with reduced funding, resulting in significant difficulties securing investment funds for launching shared services. Modifications to scope and phasing opportunities may offer a soft launch solution without requiring significant upfront cost.
5. Managing the Project Effectively

Task underestimation: Companies sometimes underestimate the complexity, level of effort, and/or duration of tasks, resulting in a strain on resources, budgets, and skills.

Schedule slippage: These issues can result in schedule slippage. Establishing a solid project plan at the outset with built in cushion is critical. Conducting frequent sponsor meetings to quickly resolve issues and closely monitoring and tracking progress can help minimize schedule problems.

6. Overcoming Politics and Bureaucracy

Resistance comes in many forms as various groups within the company attempt to maintain or gain control, or even sabotage change efforts. Layer this on top of the approval bureaucracy often present, and schedule problems are guaranteed to appear.
Internal competition: Internal vying for an increased statement of work, bigger organization, bigger budgets, or better technologies is counterproductive to a streamlined, effective organization. Emphasize a team approach for success.
Value realization: To help manage ongoing budget pressures, actively measure project results, clearly communicating benefits achieved to stakeholders.

7. Leaping over the Technology Hurdles
Technical challenges: Clearly defining requirements, setting progress checkpoints, testing systems and interfaces, monitoring security access, and involving end users in testing and training will ensure technology is implemented well to be an effective enabler.

Vendor issues: As technology moves towards a SaaS world, implementations increasingly rely upon more vendor support. Establish contracts with milestone achievement payments to guarantee on-time, on-budget delivery, and establish weekly governance meetings to discuss any project or relationship concerns.

8. Getting Timely Decisions

Decision making can be difficult, especially in consensus-based organizations. Empower teams to provide insights or voice concerns, but assign an overall decision maker, and clearly document issue resolutions and decisions to avoid revisiting and rework.
9. Avoiding Surprises and Mitigating Risks

Mid-implementation scope change: It is tempting to add services or remove them from scope as a result of political pressures, technology issues, and factional inertia within the team. While this may be unavoidable, ensure the impact will not counteract change management currently underway.
Business case surprises: If benefits are not obtained as quickly or at the level anticipated, or if unexpected costs arise mid-project destroying your projected return, efforts may be derailed by leadership or other groups within the organization. Reduction in scope can offset the above impacts.
10. Selecting the Right Staff

Leaders’ long-held relationships often interfere with the selection of qualified staff. Shared services most often require customer-oriented employees who are comfortable using technologies and are flexible problem solvers. A zero-based staffing approach is preferred for retention of top performers.
11. Preparing Customers and Stakeholders

Organizational change impacts: Understand the enterprise landscape and how the proposed change in service delivery, organization, resources, processes, and technologies may impact stakeholders, customers, and employees. Adequately prepare those impacted to guarantee a smooth transition.
Change management: A project will not be successful without a detailed change management plan. When planning, be aware of common failures: ineffective leadership change sponsorship, not learning from past change initiatives, lack of dedicated resources and planning, limited understanding or organization, group and individual changes, poor support or alignment with middle management, ineffective communication to support the change process, and employees’ resistance to change.
Communications: Implementation teams can never over-communicate plans and expectations to stakeholders. Thoughtful, deliberate, and long-range communication planning is critical to project success.
12. Preparing Staff

Training, while critical, is often compromised to allow more time and/or resources for other tasks. It can carry or sink shared services depending on the effort extended.

13. Testing Launch Readiness

Testing processes, training, and technologies is critical to success. Frequently, implementations stop short of ensuring all activities have yielded the desired results.

Technology testing: Ensure that unit, system integration, and user acceptance testing criteria are upheld, allowing for system correction and retesting of failed test scripts prior to moving to the next phase.
Dress rehearsal: Conduct testing that evaluates people, processes, and technologies working together in a realistic operational environment. Leverage role players to request and receive service, thus training staff on new processes and educating role players on the new service delivery model.
Undoubtedly, other problems may arise, but understanding potential pitfalls ahead of time and preparing for them will lead you to obtain your goals, joining those who have achieved the ultimate path to success.
This article was coauthored with Doug Utley and Tina Krebs. It is a glimpse of what we will discuss during the workshop session at the upcoming HR Shared Services & Outsourcing Summit.