Successful scope expansion for an existing shared services operation requires careful planning. Scope expansion can take a number of forms such as new services, new customer groups, and new geographies. “Shared Service Expansion” is the fourth session of a HR Shared Services learning series that ScottMadden is presenting along with Shared Services & Outsourcing Network (SSON). In this session, we cover an approach for planning expansion and keys to adding scope while balancing the demands of your current shared services operation.

1. HR Shared Services Expansion
SSON Shared Services Learning Series
2011

2. Agenda
I. About ScottMadden
II. Expansion is Good
III. Service Expansion Strategies
IV. Executing the Service Expansion
Copyright © 2011 by ScottMadden. All rights reserved. 1

3. I. About ScottMadden

4. About ScottMadden
Decide Design Build Improve
• Strategy • Service delivery • Project planning • Process
development and model and management improvement/cost
integration • Detailed current • Service/transaction reduction
• Benchmarking state, future state, center • Operations/
• High-level and business case • Process redesign technology
business case • Sourcing model assessment
• Technology design,
• Change • Organization selection, and • Benchmarking
management design and staffing support • Customer and
• Change • Change employee surveys
management management • Change
management
• Service expansion
Our Functional Expertise
Finance & Supply Chain Real Estate & Engineering
Accounting Management Facilities Services
Human Information Administrative
Multi-Function
Resources Technology Services
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5. II. Expansion is Good

6. Benefits of Shared Services
Improve Service
& Enable Scalability
• Standard Processes
Reduce Cost • Issue tracking & closure
(20% to 50%) • Performance Metrics
• Common model for expansion
Control Gain Control
Cost & Leverage Data
• Aligns skill set with work type • Data centralization
• Eliminates redundant labor • Improved reporting & analytics
• Tracks service usage/costs • Improved compliance
• Economies of scale • Better decision making
• Automation of processes • Focuses on demand mgt.
Companies can achieve all three, but can design for quicker results on any one.
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7. Advantages and Disadvantages of Growth
Advantages of Growth Disadvantages of Growth
 The shared services model works  Investment requirements—up-front costs to
— Improves service delivery transition and centralize technology, staff,
equipment, and facilities
— Lowers total costs
 Additional bureaucracy
 Economies of scale
 Size can hamper responsiveness
 Synergies (e.g., on-boarding of new employees)
 Requires broader technical expertise at the top
 Standardization of processes and elimination of to manage additional functions
redundant processes
 Perception of kingdom building
 Shared technology
 Potential impacts to employees currently
 Shared management and administration performing the work
 Cross training
 Additional advancement opportunities for
shared services employees
 Improved customer service
— Contact center
— Key account management
 Allow business units to focus on core processes
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8. III. Service Expansion Strategies

9. Expansion Strategies – Horizontal vs. Vertical Growth
Horizontal Growth Vertical Growth
 Additional customers  Additional services
 Additional business units within each company  HR services
 New geographic areas — Recruiting support
— New states, regions, countries, etc. — Training and development
— Global shared services centers — Labor relations
— Vendor management
 Support to other companies (external sales)
— Relocation support
— Travel & expense reimbursement
Nuclear Operations
Manager
Chemistry General
 HR Information Technology support
Supervisor
— HR applications support
Chemistry Technical
Plant Chemistry Waste Management
Supervisor
Services Principal
Chemist
Supervisor
— HRIS report requests
Chemical Rad Waste
Shift Techs
Analysts Shipping
Environmental
 Cross-functional services
— Litigation support and coordination
— Communication services
— Environmental, health and safety
— Regulatory compliance
— Real estate
— Facilities
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10. Vertical Growth – Adding New Services
 Use a standard process and tools to evaluate and justify the addition of future services
— Analysis should include alignment with strategy, resource impact, impact on call quality (e.g.,
average speed to answer), ability to leverage the service among all customers
— Set necessary sign-offs required to add a service
 Set standards to which candidate processes or services must adhere
— Typically, the service center will want an incoming process “cleaned” to a certain level before it
assumes responsibility
 The service requestor should include the following with each new service request:
— Submitted by
— Describe the proposed service or services to be transitioned and provide the appropriate
process flows (current and proposed future state)
— Current service owner (function, name, title)
— Positions performing the work today (position titles, FTEs)
— Customers of the service (who and number of customers)
— Systems or technology used to perform the service today (list and describe how used)
— Current performance measures used (list and note current performance)
— Current work volumes
— Describe nature of work volumes (steady, cyclical, peaks, etc.)
— Proposed timing for transition of service to SSC
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11. Vertical Growth – Adding New Services (Cont’d)
The service is provided to more than one Change management impact
business unit 1 = Significant change management is
1 = More than one business unit required
2 = Most of the business units in the 2 = Some change management is required
company 3 = Minimum or no change management is
3 = All of the business units in the company required
The service is transactional in nature Overall effort to implement
1 = Work is non-transactional 1 = Complex implementation (months to
2 = Some people doing similar, repetitive implement)
tasks 2 = Simple implementation (weeks to
3 = Many people doing similar, repetitive implement)
tasks
It is not core to the business unit Vendor
Mgmt.
1 = Function is considered a core operation
2 = Function is not a core operation
Bonus
Service satisfaction level Admin
1 = Business unit customers are fully
satisfied with current service levels Training
2 = Business unit customers are somewhat
satisfied with current service levels
3 = Business unit customers are dissatisfied EH&S
with current service levels
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12. Vertical Growth – Adding New Services (Cont’d)
 Track the new service requests that have been submitted to the shared services center
 Assign scores for each of the evaluation criteria
 Sum the scores and prioritize the expansion opportunities
 Determine the services to include in the shared services expansion
 Execute the service expansion!
HR Shared Services Expansion Tracking Tool (Example)
Current Change
Service Transactional Core to the Overall Total
Candidate Services / Activities satisfaction management
reach? in nature? business? effort? Score
levels? impact?
1 Service award vendor administration 3 3 2 3 3 2 16
2 Severance / separation packet creation 3 3 2 2 1 2 13
3 Tuition reimbursement administration 3 2 2 2 1 2 12
4 Bonus administration 3 3 2 2 1 1 12
5 Leave of absence management support 3 2 2 3 1 1 12
6 New hire orientation tracking 3 1 2 3 2 1 12
7 Professional licensure / exam administration 3 1 1 3 1 2 11
8 Contingent worker (contractor) administration 2 3 1 3 1 1 11
9 Code of conduct training administration 3 1 2 1 2 1 10
10 Environmental health & safety reporting 1 1 2 3 1 1 9
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13. IV. Executing the Service Expansion

14. Key Steps to Executing the Service Expansion
Step 1: Establish a baseline – Current State
 Consolidate all current state processes included in the new service request submission
 Review the technology used to perform the service today
 Evaluate the current organization design / staffing levels
 Determine the costs required to perform the service today
Step 2: Identify improvement opportunities – Future State
 Document process improvements / improved use of technology
 Identify Service level improvements
 Demonstrate organizational streamlining where available
 Estimate cost savings for implementing the new service
Step 3: Develop the business case
 Identify stakeholder groups and design communications and change management strategies for each group
 Clearly document and communicate the assumptions underlying the business case
 Continue to update the business case as facts and assumptions change
 Include both quantitative and qualitative support
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15. Key Steps to Executing the Service Expansion (Cont’d)
Step 4: Develop the service transition & training plan
 Determine what activities move, what activities stay and the
timing of the transition (Stop / Start / Continue plan)
 Include training topics for future state
— Operational process changes
— Telephony / IVR training impacts
— Case management impacts
— HR portal or knowledgebase updates
 Identify training audiences
— Service center Directors and Managers
— Service center representatives
— HR Business Partners
— Centers of Expertise
— Employees and managers
 Align training timeline with the service expansion timeline
— Training preparation
— Business simulation
 Hire and train new personnel
 Begin transitioning work
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16. Key Steps to Executing the Service Expansion (Cont’d)
Step 5: Measure the results
 Perform on-going measurement of customer satisfaction
 Monitor stakeholder satisfaction
 Track and report metrics performance
 Update the business case
 Take corrective actions where performance falls short
 Celebrate successes!
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17. Contact Us
For more information on Shared Services Expansion, please contact us.
Benjamin Foster ScottMadden, Inc.
Managing Associate 3495 Piedmont Rd, Bldg 10
Suite 805
Atlanta, GA 30305
Phone: 404-814-0020
benjaminfoster@scottmadden.com
Copyright © 2011 by ScottMadden. All rights reserved.
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