Transitioning To A Nearshore Shared Services Business Model
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<div><p style="text-align: justify;"><span xml:lang="EN-US" data-contrast="none">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. </span> </p><p style="text-align: justify;"> </p><h2 style="text-align: justify;"><span style="font-size: 14pt;" xml:lang="EN-US" data-contrast="none">Organizations are Leaning toward a Nearshore Shared Services Center</span><span xml:lang="EN-US" data-contrast="none"> </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></h2></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none">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. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none">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. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none">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.</span> </p><p> </p><h2><span xml:lang="EN-US" data-contrast="none"><span style="font-size: 14pt;">Project Transition Management</span> </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></h2></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none">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. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none">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. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p> </p><h2><span style="font-size: 14pt;" xml:lang="EN-US" data-contrast="none">Inhouse vs Outsource</span><span xml:lang="EN-US" data-contrast="none"> </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></h2></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none">Technological aspects such as service configuration, hours of attention, SLAs, and the benefits of outsourcing the shared services unit may include: </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><ul style="list-style-type: disc;" role="list"><li role="listitem" data-aria-level="1" data-aria-posinset="1" aria-setsize="-1" data-list-defn-props="{"335552541":1,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" data-listid="1" data-font="Symbol" data-leveltext=""><p><span xml:lang="EN-US" data-contrast="none">Risk management is improved </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></li><li role="listitem" data-aria-level="1" data-aria-posinset="2" aria-setsize="-1" data-list-defn-props="{"335552541":1,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" data-listid="1" data-font="Symbol" data-leveltext=""><p><span xml:lang="EN-US" data-contrast="none">Agility in implementing changes </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></li><li role="listitem" data-aria-level="1" data-aria-posinset="3" aria-setsize="-1" data-list-defn-props="{"335552541":1,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" data-listid="1" data-font="Symbol" data-leveltext=""><p><span xml:lang="EN-US" data-contrast="none">Increased control of changes </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></li><li role="listitem" data-aria-level="1" data-aria-posinset="4" aria-setsize="-1" data-list-defn-props="{"335552541":1,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" data-listid="1" data-font="Symbol" data-leveltext=""><p><span xml:lang="EN-US" data-contrast="none">Streamlined visibility of costs and distribution by cost center </span><span xml:lang="EN-US" data-contrast="none">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. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></li></ul></div><div style="text-align: justify;"><ul style="list-style-type: disc;" role="list"><li role="listitem" data-aria-level="1" data-aria-posinset="5" aria-setsize="-1" data-list-defn-props="{"335552541":1,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" data-listid="1" data-font="Symbol" data-leveltext=""><p><span xml:lang="EN-US" data-contrast="none">Time-to-transition </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></li><li role="listitem" data-aria-level="1" data-aria-posinset="6" aria-setsize="-1" data-list-defn-props="{"335552541":1,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" data-listid="1" data-font="Symbol" data-leveltext=""><p><span xml:lang="EN-US" data-contrast="none">Time-to-staff </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></li><li role="listitem" data-aria-level="1" data-aria-posinset="7" aria-setsize="-1" data-list-defn-props="{"335552541":1,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" data-listid="1" data-font="Symbol" data-leveltext=""><p><span xml:lang="EN-US" data-contrast="none">Multicultural/language barriers </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></li></ul></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none">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. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p> </p><h2><span xml:lang="EN-US" data-contrast="none"><span style="font-size: 14pt;">Human Factor</span> </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></h2></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none">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. </span> </p><p> </p><h2><span xml:lang="EN-US" data-contrast="none"><span data-ccp-parastyle="heading 1"><span style="font-size: 14pt;">Conclusions</span> </span></span><span data-ccp-props="{"134233117":false,"134233118":false,"134245418":true,"134245529":true,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></h2></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none">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. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p> </p><p> </p><p> </p><p><span style="font-size: 10pt;"><span dir="ltr"><em>This article was contributed by our expert </em></span><a href="https://www.linkedin.com/in/kevinreyeszambrano/" target="_blank" rel="noopener"><em>Kevin Reyes Zambrano</em></a></span></p><p> </p><p> </p><h3><span style="font-size: 18pt;"><span dir="ltr">Frequently Asked Questions Answered by </span>Kevin Reyes Zambrano</span></h3></div><div style="text-align: justify;"><p> </p><h2><span style="font-size: 12pt;" xml:lang="EN-US" data-contrast="none">1. What processes will be in place to continuously improve and optimize our offshore strategy?</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></h2></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none">To ensure that your offshore strategy is optimized and improved over time, you must build a strong framework that includes several key processes. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p><strong><span xml:lang="EN-US" data-contrast="none">Performance Monitoring and KPIs</span></strong><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none"><strong>Regular Performance Reviews</strong>:</span><span xml:lang="EN-US" data-contrast="none"> Conduct regular performance reviews using predefined Key Performance Indicators (KPIs) to measure the success of the offshore strategy.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p><p><span xml:lang="EN-US" data-contrast="none"><strong>Real-Time Monitoring</strong>:</span><span xml:lang="EN-US" data-contrast="none"> Implement real-time monitoring tools to track productivity, quality, and efficiency.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p><p><span xml:lang="EN-US" data-contrast="none"><strong>Feedback Loops</strong>:</span><span xml:lang="EN-US" data-contrast="none"> Establish continuous feedback mechanisms between onshore and offshore teams to identify issues and areas for improvement.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p> </p><p><strong><span xml:lang="EN-US" data-contrast="none">Data Analytics</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></strong></p></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none"><strong>Data Collection</strong>:</span><span xml:lang="EN-US" data-contrast="none"> Consistently collect data on all aspects of offshore operations, including cost, time, quality, and customer satisfaction.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p><p><span xml:lang="EN-US" data-contrast="none"><strong>Data Analysis</strong>:</span><span xml:lang="EN-US" data-contrast="none"> Use advanced analytics to interpret the data, identify trends, and uncover underlying issues.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p><p><span xml:lang="EN-US" data-contrast="none"><strong>Predictive Analytics</strong>:</span><span xml:lang="EN-US" data-contrast="none"> Implement predictive analytics to forecast potential challenges and opportunities for optimization.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p> </p><p><strong><span xml:lang="EN-US" data-contrast="none">Process Standardization and Documentation</span></strong><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none"><strong>Standard Operating Procedures (SOPs)</strong>:</span><span xml:lang="EN-US" data-contrast="none"> Develop and regularly update SOPs to ensure consistent quality and performance.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p><p><span xml:lang="EN-US" data-contrast="none"><strong>Best Practices Repository</strong>:</span><span xml:lang="EN-US" data-contrast="none"> Create a repository of best practices and case studies to share across teams.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p><p><span xml:lang="EN-US" data-contrast="none"><strong>Process Audits</strong>:</span><span xml:lang="EN-US" data-contrast="none"> Conduct regular process audits to ensure adherence to standards and identify deviations.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none"> </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p><span xml:lang="EN-US" data-contrast="none"> </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div style="text-align: justify;"><p><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335559738":0,"335559739":0,"335559740":279}"> </span></p></div><div><p style="text-align: justify;"><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":279}"> </span></p></div>
KR Expert - Kevin Reyes Zambrano
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