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HR Shared Service Center: Five tips for excellent service quality
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More and more companies are bundling services in internal profit centers, so-called shared service centers. For a long time, they were seen as a form of organization for international corporations. SMEs are now catching up. The introduction of an HR Shared Service Center is worth considering, particularly in the HR sector. What are the biggest advantages? What are the risks? And what can you do to avoid costly mistakes? That's what the following article is all about - including five practical expert tips.
Important advantages of shared service centers in SMEs
In theory, the advantages of shared service centers (SCCs) in SMEs are obvious: they allow decentralized processes and tasks to be centralized. Not only does this create more transparency, but companies can also leverage potential for better service and product quality. At the same time, scaling effects can be exploited and savings realized. In addition, shared service centers are often the starting point for the successful conquest of new business areas if the SCC not only offers its support internally, but also markets its services to external clients.
The auditing firm KPMG has conducted several studies and surveys on SSCs in SMEs. The empirical study Shared Service Centers in SMEs states:
- 53 percent of SMEs have SSC experience, particularly in Finance & Accounting and IT. Trend: rising significantly.
- In 80 percent of cases, SSC projects meet expectations to a high degree.
- 68 percent of companies set up the shared service center at their headquarters.
- 55 percent of SSC projects achieve payback within the first two years.
In the study Service Management in the Shared Service Organization, the authors from KPMG and the University of St. Gallen come to the conclusion that many of the 70 SSC projects examined still have considerable development potential. The greatest challenges include standardization and automation processes. Find out how to overcome these and other challenges when introducing HR Shared Service Centers below.
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Five tips for the successful introduction of HR Shared Service Centers
The introduction of an HR Shared Service Center only adds value if the quality of the services does not suffer. The basic prerequisite for this is well thought-out processes that are properly set up in the IT systems. The following tips will help you to maintain or even improve service quality when introducing an HR Shared Service Center.
Tip 1: Think about processes from the internal customer's perspective.
An effective HR Shared Service Center can only be created if you design the processes very well from the outset. This means knowing the requirements of your internal customers and designing the processes accordingly. Only your customers really know what is important. It is therefore worth systematically gathering the internal customer perspective at the start of the project. With formats such as interviews or kick-off meetings, you give your customers the opportunity to articulate their requirements for the processes. And you get the chance to find out about requirements that you may not even have had on your radar. In this way, the involvement of internal customers helps to ensure that the implementation of the HR Shared Service Center leads to an increase in service quality.
Tip 2: Standardize processes and keep procedures as lean as possible.
The next step is to translate the requirements into standardized and lean processes. Standardizing processes allows you to achieve economies of scale and offer your internal customers consistent processes: regardless of the location from which users use the services provided.
However, do not focus exclusively on standardization. After all, poorly designed processes remain poor, even if they are standardized. Therefore, design the processes to be as lean as possible. For example, make sure that the decisive coordination takes place at the beginning when creating a reference - instead of going through additional rounds of coordination later on, which are very time-consuming for everyone involved. When designing the recruitment process, make sure that important criteria are taken into account right at the start. This speeds up the process. In this way, you can prevent the most competent candidates from having already moved on while the SSC has not even finished processing the application - and you have to settle for second choice.
Tip 3: Clearly map the processes in the IT systems.
Well thought-out, lean and standardized processes are fundamental prerequisites for good service quality in the new HR Shared Service Center. However, the list of requirements does not end there. You must also ensure that the defined processes are properly implemented in functioning IT systems. Do not make any compromises: If you cut corners at the expense of implementation quality in the IT world, it can be expensive. You will no longer have time to devote to your internal customers, but will be soldering and screwing with your IT colleagues on bumpily mapped processes. And if you no longer have your head free for the really important strategic HR work, this will ultimately cost even more.
Tip 4: Consistently invest in and use continuous improvement processes.
Continuous improvement processes are crucial for the successful introduction of an HR Shared Service Center. They not only influence the perceived service quality, but also anchor the economic success of the service center.
Even in the best planned and implemented shared service center, not everything will run smoothly right from the start. Your internal customers will also notice this. However, customers will also notice if you are able to make quick and competent improvements to the systems and processes. It is therefore critical to success that you learn and implement quickly, for example through the control loop: monitoring, target comparison, analysis and introduction of improvement measures.
The continuous improvement process is particularly effective if you put the project managers - internal and external project managers with HR expertise - on the hotline during the initial phase. You can then find out directly from the internal customer perspective where things are going wrong. This puts the project managers in a position to initiate meaningful countermeasures as quickly as possible.
You can also do well if you don't wait for customers to complain, but proactively define key performance indicators. For example, the time span of the recruitment process from inquiry to hiring. Or process times for the creation of references. This will save you time and money and effectively increase customer benefits.
Tip 5: Use expert knowledge.
You may already have the expertise to introduce a value-adding HR Shared Service Center in-house. If not, be sure to seek expert advice. The follow-up costs of a failed attempt are simply too high. Consulting also has another advantage: external consultants generally find it easier to reconcile heterogeneous requirements. Coordination with the co-determination committees is also usually easier for external parties because the relationship with the committees is not preloaded.
Introducing an HR Shared Service Center: an expert project
Are you planning an HR Shared Service Center or would you like to explore the opportunities and risks of such a project? Benefit from the experience of the interim managers from the Deutsche Interim AG pool. We are always happy to help you.