Shared Services: The importance of business process reengineering (BPR) in the implementation of Shared Services

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Shared Services: The importance of business process reengineering (BPR) in the implementation of Shared Services

Thursday, October 13th, 2011 - 16:57
Thursday, October 13, 2011 - 16:45
Business process reengineering themes are an important component of a successful Shared Services implementation.

Better, cheaper, faster—business process reengineering (BPR) focuses on improving process. By using a structured technique to evaluate what gets done, how it gets done, why you are doing it, and how to do it better, BPR can generate efficiency and effectiveness for an organization. For a Shared Services implementation, the primary goal of BPR is to create a standardized set of streamlined processes that can be deployed across the organization. When this streamlining occurs, the resulting improved efficiency and quality is extremely valuable to the organization.

A BPR implementation fundamentally transforms the way work is performed by re-thinking old processes, procedures, practices, and policies. BPR helps meet organizational objectives by examining how work is performed and identifying opportunities to streamline efforts. For many Federal agencies, process improvements lie not only in streamlining the current process but also in introducing new technology. In many cases, an agency, and even departments within the agency, has its own unique processes. Through the use of BPR themes in a Shared Services implementation, common processes can be standardized and streamlined. Building these common processes into the new systems development links business and stakeholder objectives and thus enables continuous improvement as processes are refined and redesigned.

BPR themes are an important component of a successful Shared Services implementation. While the concept of BPR may seem theoretical, the actual problems BPR addresses are concrete. Broken processes abound in organizations, and the more attention that is paid to identifying and addressing these broken processes at the start of your Shared Services implementation, the greater the quality of the solution. For example, some signs of broken processes may be: 

  • Everything takes too long, but it is difficult to understand why.
  • Consumers of the process call in personal favors to reach the desired outcome.
  • People executing the process are unhappy and/or cynical.
  • Valid status information is hard to get.
  • Measurements are not very meaningful.
  • Costs are hard to control.

These signs of broken processes may also be key drivers for organizations to implement Shared Services. In fact, a 2006 survey conducted by SharedXpertise indicated that business entities generally establish Shared Services organizations for three primary reasons: to improve service, to manage costs, and to improve organizational efficiency. Organizations achieve these benefits by leveraging economies of scale, technology, organizational realignment, labor arbitrage, best practices, and end-to-end process reengineering (Searle, 2006).

Given these overlapping goals, it is clear that a more robust approach to Shared Services implementation integrates BPR practices from the outset of the implementation. While this approach requires some additional time at the start to focus on process, the ultimate benefits from the improved process will greatly outweigh the cost of this time. Recreating outdated, inefficient processes while using the Shared Services model will greatly reduce the benefit and prolong frustration with the process. In fact, there are several models, such as OPM's HR Line of Business (LOB) Business Reference Model, that incorporate standard HR Shared Services processes and are intended to be leveraged across the Federal government.

Success factors for a BPR initiative closely mirror those required for a Shared Services implementation. Both BPR and Shared Services require the following key success factors:

  • Strong project management skills
  • Senior-level support
  • Effective communication
  • Strong change management
  • A phased approach to implementation

While enabling these key success factors requires a significant commitment, both the BPR and the Shared Services activities benefit. As a result, the inclusion of BPR themes at the start of a Shared Services implementation can ensure process standardization, cost reduction, and, ultimately, a more successful overall implementation.

 

 


Ruth Ann HudsonRuth Ann Hudson is a Senior Managing Consultant in the Organization and People practice area of IBM. Since joining IBM in 2005, Ruth Ann has worked with a variety of clients to provide program management services for public sector projects. She currently serves as the Project Manager for the Office of Justice Programs (OJP) Business Process Improvement (BPI) project. This project was awarded in November 2009 with the objective to develop, recommend, and implement streamlined, efficient, and consistent OJP business processes supported by effective communications, documentation, and training.

Ruth Ann has a B.S. and M.A. from Georgetown University and is currently pursuing her M.B.A from The Wharton School at the University of Pennsylvania.

Ruth Ann Hudson (ruth.hudson@us.ibm.com)

 

 


Adam Jelic Adam Jelic has over 18 years of Business Transformation and Information Technology experience. He has deep expertise across several industries including financial, industrial, communications, and the public sector. Mr. Jelic has led large and complex programs including Strategic Business planning, Shared Services, Enterprise Infrastructure, Supply Chain, Human Resources, and Customer Relationship Management.

He has an excellent track record of delivering successful programs for Fortune 50 firms and government agencies in the United States and Canada.

Adam Jelic (ajelic@us.ibm.com)