Is culture important in shared services and outsourcing?
Point of View
The obvious answer is “yes” to this rather leading question. That said, when we discuss these aspects with leads of shared services and organisations that have progressed the BPO route, the common answer is “yes” but the sentiment is “after the cost reduction is achieved”.
It is highly dangerous to put the need to reduce costs which is commonly one of the key drivers for shared services and outsourcing, above the culture that will need to be created. The consequence is that over half of the organisations that have this approach fail to achieve all of their initial business case objectives.
A lack of focus on culture is another reason for some of the common issues faced in shared services and outsourcing, including higher levels of attrition when compared to other forms of employment; a lack of employee engagement and no brand loyalty to the organisation that they work with.
It is more common than otherwise for a shared services capability to struggle to describe the culture, and to really assess whether this is where it should be. Organisations must look at a range of areas including:
- Whether they have the right people in the right roles, that personalise the culture that you wish to embed in the organisation
- How the customers perceive the service, and their interactions with the shared services capability
- The vision and strategy of the capability
- How performance is assessed and in particular bonuses allocated and promotions determined
- What techniques are used to hire top talent and the messaging provided to the market to attract staff
- How top talent is retained
- The brand of shared services both internally and within the rest of the business
- Structures in place to govern operations, processes, IT and continuous improvement
- The use of KPIs and business volume indicators
Diagnosing this together will give you a better view of the culture within your shared service centre, and a lack of focus on this may be causing more problems than the organisation initially envisaged!