Jim Scully, founder and president of the Shared Services Institute (HRSSI) and 20-year shared services veteran, contributed to our latest eBook 5 Essentials for Making HR Service Delivery Look & Feel Effortless and discussed the definition of HR shared services and the components necessary for a true shared services delivery model. In it, he notes that it’s difficult to distinguish between shared services and simple centralization when in reality, they are very different concepts.
I recently had the opportunity to catch up with Jim and chat about shared services, technology and his definition of a successful HR service delivery model. Take a look:
Emily Lewis: You have almost 20 years of experience in shared services. How has shared services changed and evolved in the last 20 years?
Jim Scully: Shared services is like one of those massive road races, like the one in my home town of Atlanta, the Peachtree Road Race. Each year, sixty thousand runners line up so deep at the starting line that the runners at the back cannot even see the start banner. The professionals and fastest runners who earn places at the front of the pack actually finish the race before thousands even get started. Similarly in shared services, the earliest adopters left the gate about 20 years ago, while many organizations are just now beginning their journey. Since organizations are at such different places on this journey, it is very difficult to generalize about where they are and have been.
But in retrospect, I do see shared services moving through three phases. The first phase I call the consolidation phase, in which the focus was on removing duplicative staffs and defragmenting roles. Next, the transformation phase continued leveraging consolidation savings but shifted focus to leveraging shared services to transform the role of HR, particularly HR business partners. We are now entering the third phase, which I call the empowerment phase. The new breed of web-based HR portals and HRMS platforms feature consumer-grade user interfaces that are taking employee and manager self-service to new levels. In this wave, self-service will progress from being a nice-to-have preferred alternative to being the primary channel of service. This shift will have a significant, if not profound, impact on the design and operation of shared services.
EL: What is the most common mistake organizations make when implementing an HR shared services delivery model?
JS: The most common mistake I have seen is also the most understandable. I come across many so-called shared services startups that suffer from simple underinvestment. They did not invest in the project resources, technology and/or talent necessary to be truly effective. To put it bluntly, they tried to get by on the cheap and did not appreciate what it would take to do it right. Shared services models can save money, but they also cost money. The goal is to achieve incremental savings that exceed the incremental costs. Over time, the savings will come from process excellence, not straight cost cutting. In fact, as Deming said, this will lead to higher cost in the long run.
EL: In the ebook, you state, “Perhaps the most telling sign that a centralized function is not shared services by my definition is the technology it deploys.” What role does technology play in shared services and why is it so important?
JS: The role that technology plays is to enable process excellence and continuous improvement. I cannot tell you how many shared services models I’ve visited that have basically gotten as good as they can get without new or different technology. It’s like trying to become a world class cyclist on an old ten speed Schwinn. You can improve for a while, but eventually the technology will hold you back.
EL: What advice do you have for shared service organizations regarding the vendor selection/evaluation process?
JS: Today, with tools increasingly available on demand, which is to say as SaaS, it is short sighted to focus on functional fit-gap analysis. Tools are updating their functionality much faster than in the past because they no longer must wait for software upgrades or updates to deliver new capabilities.
The focus needs to shift instead to the service relationship. Yes, functionality is undeniably important, but buyers need to look beyond functionality to find the vendor that is best equipped and suited to partner with them. When companies are dissatisfied with their current SaaS vendor, it is less often about functionality and more often about service and support.
EL: You recently conducted an annual survey of HR delivery practices. What were some of the most surprising findings in the survey and what was your key takeaway?
JS: Probably the most interesting finding, which I have since verified with other organizations with similar research, is that nearly half of organizations have either switched HRMS platforms in the last 12 months or plan to switch in the next 1 or 2 years. And it’s not just the core HRMS platform that’s on the table. Comparable numbers of organizations are looking at changing or implementing other HRIS platforms, like case management, portal, applicant tracking and so on. We are in the midst of a very dynamic period across the HRIS spectrum. It’s going to be a very interesting few years.
You can hear more from Jim and other expert shared services panelists on April 24th in the HCI webinar How to Run HR Shared Services like a Thriving Business, sponsored in partnership with cfactor. Register Now.