Governance -getting your ducks in a row for Shared Services Success

Manning Charles & Associates

GovernanceGetting all your ducks in a row for

Shared Service successPeter M Salmon

Manning Charles & Associates LimitedShared Services Environment Conference

24 June 2013 - Wellington


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Photo John Morgan

http://www.flickr.com/photos/aidanmorgan/


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Session objectives

• Understanding the role governance plays in ironing out major speed bumps before they occur and providing a clear structure for what is being accomplished is important for setting off on the right foot.

• Meshing the parties goals and strategies while ensuring accountability is assigned

• Moving beyond SLAs for growth and success

• Examining the managerial, tactical and executive level of governance structures

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Adapted from "Shared Services – Adding Value to the Business Units” By Donniel S. Schulman, John R. Dunleavy, Martin J. Harmer and James S. Lusk.

SHARED SERVICES

CENTRALISEDDECENTRALISED

Unresponsive

Remote

Inflexible

Service Culture

Efficient Delivery

Best Practice

Accountable

Resourced Appropriately

Flexible

Economies of Scale

Standard Processes

Business Focus

Responsive

Partner

Redundant

Inefficient

Reduced commonality

Shared Services


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The keys to the kingdom• Shared understanding of objectives and purpose

• A framework for linking user satisfaction to service delivery costs

• Service level agreements between users and providers

• Metrics

• External benchmarks

• A framework for raising and resolving issues

• Optimized and consolidated business processes

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Why Governance?

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Manage Risk Benefits Realisation

Service Performance

Problem Mgt

Change & Project Mgt Compliance Commercials

Communication and Relationship Management

Meet obligationsManage issuesOperational managementStrategic direction

Achieve business caseOptimise utilisationContinuous improvementProcess standardisationEnable strategic leverage


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Governance

• Stakeholder interests are considered• • Business needs recognised

• Appropriate parties are held accountable

• Measurable results in place

• Necessary resources deployed

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You cannot escape the responsibility of tomorrow by evading it today

Abraham Lincoln


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Governance - clarifies

• What the rules are

• Who makes the rules and decisions

• Who enforces the rules

• What the consequences for not following the rules are

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Governance - embraces

• Documented decision guidelines, roles, and responsibilities

• Performance management and reporting

• Structured collaboration and communication

• Major resourcing and resource allocation decisions

• Risk Management

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One size does not suit everyone

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• Models must reflect the participants

• Align with ‘customer’ strategies

• Meet current and future needs

• Flexible, so that changes can be met


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Governance Questions to be addressed

• Scope Management• Demand Management• Delivery Management• Problem Resolution• Performance/SLAs• Improvement identification

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Governance – constituent elements

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Governance

Value

Measurement

Risk Management

Accountability

Based on Conference Board material


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Oversight

Principles & Decision

RightsBenefits(Value)

Principles in

Operation

Performance(SLA etc.)

Based on Conference Board Material

Governance – Hierarchical Model


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Effective Implementation

• Effective Project Management (at inception and when required)• Executive Support (CEO preferable)• Effective Communication (ongoing)• Strong Change Management (ongoing)• Phased Approach (preferable)

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Effective Governance

• Overcomes resistance – provides clear accountability against defined criteria• Differential Benefits• Loss of Control• Lack of Trust

• Manages Expectations – clear accountability reduces service failures• Excessive haste to implement• Resource / Capacity issues• Customer needs variances

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Organisational

• Governance is driven by business needs, it should provide a framework as we have discussed – it should be the servant of the organisation not the master

• Whilst specifics will vary is likely that the following layers of organisation will be present:- • Oversight – executive leadership and board• Implementation – leadership, management, • Operations – leadership, management

• Organisational structure should integrate necessary governance needs into it where required – ie appropriate allowance for checks and balances

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Key players in governanceCxO • Defines the expected result

• Sets timeline• Arbitrates competing resource demands

Executive Managers

• Develop approaches to meeting overall objectives• Recommend solution to CxO

BU Managers • Typically fund the initiative• Want cost effective solutions in areas SSC services• May initiate request for services inc new opportunities

SSC Mgt & Staff

• Establish the SSC• Provide the services required and initiate new

opportunities• Report performance• Deliver required outcomes (Value)

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SSC focus current and future• Enhancing corporate value• Enabling strategic growth• Partner service and support• Enabling BU to focus on operational matters• Effective operation of secondary activities of BU within a consolidated

operation using common approaches• Supporting BU with lower costs and improved service levels• Leveraging investment• Continuous improvement

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Looking to the future

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Are we doing the right things?

Are we getting the benefits?

Are we getting them done well?

Are we doing them the right way?

Enterprise

Operations

Business

Adapted from the ‘Four Ares’ developed by John Thorp in The Information Paradox

Strategy

Organisation

Delivery

Value


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Essential pre-requisites for success

• Trust

• Shared focus

• Robust governance

• Accountability

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In Summary• Embed governance mind-set as base for success

• Treat governance as an essential, critical strategic element in shared services not a checklist matter

• Recognise governance as core to process improvement

• Use governance in identifying value, fostering innovation and risk management

• Adopt a governance model that takes account of customers, stakeholders and operational needs

• Reflect changing conditions and strategies through updating the governance framework

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Not a silver bullet

Governance is the framework within which we manage and determine

• Information flows to support informed decision making • Decision Rights in respect of situations, in other words

accountability• Risk Management with regard to the impact of

circumstances obtaining across the organisations concerned

It is not a substitute for executive action

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Thank You


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Important Notice to Readers• This notice applies to all materials and information available in this presentation.

• All information and materials are provided on an 'as is' basis and are not intended in any way to be comprehensive.

• Any reader making use of this material does so at his/her own risk and readers are advised to take independent professional advice before acting on any information or materials found here.

• Neither Peter Salmon nor Manning Charles & Associates Limited accepts any responsibility for, nor do they give any representations or warranties, express or implied, that any of the information and materials contained in this document and presentation are complete, accurate or free from errors or omissions.

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Sources, References and Further Reading• "Shared Services – Adding Value to the Business Units” By Donniel S.

Schulman, John R. Dunleavy, Martin J. Harmer and James S. Lusk, ISBN 0470349743 published by John Wiley & Son

• Governance Models in Shared Services – Vipin Suri published by The Conference Board

• John Thorp, author The Information Paradox, www.thorpnet.com, formulator of the Four Ares

• Success Factors in Implementing Shared Services in Government, IBM Center for the Business of Government

• IT Governance: How Top Performers Manage IT Decision Rights for Superior Results – Weill & Ross, Harvard Business School Publishing

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http://www.thorpnet.com/


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Peter M Salmon• Peter is a senior executive and consultant with an extensive and successful business management

background. He combines this with significant organisational change, business assessment, professional services leadership and resource management experience. This is complemented by having worked in a number of countries and a varied range of business sectors.

• Peter's wide ranging consulting experience includes strategy, governance ,IT, programme and project advice ,financial investigations and litigation support. His other experience includes practice management including service economics and profitability, quality assurance and resource management.

• This knowledge and expertise is combined with a strong record of achievement. For many years Peter has worked with CxO level executives, management and staff to provide business focused outcomes to issues.

Should you wish to contact Peter on this or any other matter, where he might be able to assist then :-Email:- [email protected]

Peter’s website Some Thoughts may be found here :- http://petermsalmon.wordpress.com

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mailto:[email protected]

http://petermsalmon.wordpress.com/

