In today's changing digital environment, organizations are looking to deliver consistent services and outputs while leveraging technology and identifying cost savings. This is when a shared services center structure becomes relevant to CEOs, CTOs, CIOs, and CHROs.
Organizations are Leaning toward a Nearshore Shared Services Center
As part of today's global environment and digital transformation initiatives, there are many benefits in managing and delivering services with teams dispersed in multiple global locations; many companies choose to outsource their capacities and labor, including professional services and contractors that benefit from technology for working overseas.
The main driver for switching to a shared services model is cost savings while maintaining the increased quality of service. Independently of the organization size, many companies can leverage for such benefit and integrate a nearshore shared services unit, which may include functional and primary activities for their services and with world-class qualified labor.
Countries like Mexico, India, Guatemala, the Philippines, Argentina, Costa Rica, Romania, and Poland are currently leading nearshore BPO initiatives that enable a variety of options for implementing a shared services model that operates overseas and provides value not only for quantitative aspects but also key factors such as cultural and language familiarity.
Project Transition Management
A consistent transition management methodology is essential when managing organizational change, especially when shifting gears in processes that support the core business, such as the shared services unit.
Large firms often have a robust project methodology and international capacities, but the human factor is a critical driver of achieving a winning collaborative culture when problems or risks arise in such transitions.
Inhouse vs Outsource
Technological aspects such as service configuration, hours of attention, SLAs, and the benefits of outsourcing the shared services unit may include:
- Risk management is improved
- Agility in implementing changes
- Increased control of changes
- Streamlined visibility of costs and distribution by cost center On the other hand, there might be a few aspects to consider when integrating an in-house facility, whether collocated or distributed in multiple locations across the globe.
- Time-to-transition
- Time-to-staff
- Multicultural/language barriers
Even if the benefits seem to lean the scale, in-depth analysis should be completed, including make or buy, project business case, and net present value breakdown.
Human Factor
A crucial aspect of a world-class shared services center is the human factor. No organization will succeed in innovation and significant growth without people, and when managing a nearshore center, there must be proper plans and opportunities for career growth, self-realization (Maslow's), and continual education.
Conclusions
Deciding whether to outsource or set up a shared services center offshore is a complex decision that requires a robust business case; however, numerous benefits and cost efficiencies can be realized. Always consider people, processes, and technology as the key enablers for creating high-performing shared services units.
Frequently Asked Questions
1. What processes will be in place to continuously improve and optimize our offshore strategy?
To ensure that your offshore strategy is optimized and improved over time, you must build a strong framework that includes several key processes.
Performance Monitoring and KPIs
Regular Performance Reviews: Conduct regular performance reviews using predefined Key Performance Indicators (KPIs) to measure the success of the offshore strategy.
Real-Time Monitoring: Implement real-time monitoring tools to track productivity, quality, and efficiency.
Feedback Loops: Establish continuous feedback mechanisms between onshore and offshore teams to identify issues and areas for improvement.
Data Analytics
Data Collection: Consistently collect data on all aspects of offshore operations, including cost, time, quality, and customer satisfaction.
Data Analysis: Use advanced analytics to interpret the data, identify trends, and uncover underlying issues.
Predictive Analytics: Implement predictive analytics to forecast potential challenges and opportunities for optimization.
Process Standardization and Documentation
Standard Operating Procedures (SOPs): Develop and regularly update SOPs to ensure consistent quality and performance.
Best Practices Repository: Create a repository of best practices and case studies to share across teams.
Process Audits: Conduct regular process audits to ensure adherence to standards and identify deviations.
