In any area of business it requires a certain amount courage to do something different. Any kind of restructure at all carries with it a risk of failure if it is not managed in the right way, and it is understandable that the temptation is often to blunder along with a business strategy that works badly rather than creating upheaval and running the risk of emerging with one that doesn’t work at all.
It isn’t often easy to make a business case for a major change in human resources because there are so many uncertainties involved and every company is different. What may work painlessly at one may present insurmountable obstacles at another. Usually it makes sense to begin by examining the potential for making efficiency savings through shared services, which if successful will free resources for subsequent stages of the project as well as building confidence in and highlighting HR’s potential for transforming itself, something that will most certainly help the project a bit further down the line.
The essence of shared services is that they ought to generate practical efficiencies as well as just cost efficiency, as they will eradicate duplication, repetition and unnecessary bureaucracy, and also hopefully introduce some economies of scale. Whilst each department within the organisation may have its own acquired subject knowledge and expertise that is unique to its work, when the department has a chain of command that trickles down to more generic work it is sometimes the case that this work could be performed more efficiently by fewer people if these resources were spread across the departments.
To make it work this process needs inevitably to be coupled with more general efficiencies like automating or off-shoring certain tasks that are not required as an integral part of the main operation, renegotiating or replacing contracts with suppliers to ensure that best value is always being provided, and eliminating any obstacles to the fastest and most efficient delivery of services to customers.
Preparations for such a grand but necessary undertaking must invariably begin with a programme of human resources training and development, one that involves HR workshops, courses and any other means through which the company can be prepared, psychologically and corporately, for the transformation that lies ahead.
A successful shift to shared services and a fully integrated operation must inevitably bring confidence and create a mindset that enables the organisation to proceed with a more thoroughgoing overhaul of its structure and of its practices. At the end of this process it is left with a lighter, more efficient and yet still more economical operation that is much better configured to compete in the modern world.