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Demystifying 5 Shared Services Misconceptions in Saudi Arabia

Source | LinkedIn : By Anil Prem DSouza

With OPEC not being able to control oil prices due to increased availability of cheap oil, economic pressures continue to hound organisations in the Kingdom of Saudi Arabia and other GCC countries. Many corporations are looking within their organizations to determine how to improve operations and reduce costs. Being on the ground in Saudi Arabia and meeting several CFOs, CHROs and heads of Procurement and IT, I can certainly vouch that the days of abundance is over. Cost constraints, efficiency gains and productivity measures are now commonly sought to achieve this objective. Many leaders of corporations are looking at Shared Services as means to bring about cost savings and efficiencies to their organisations. Here are 5 things leaders in Saudi Arabia and GCC countries should watch out for while implementing Shared Services.

1. Centralization is not Shared Services.

Not just in Saudi, but one of the common mistakes made by organizations across the globe is thinking that centralization is Shared Services. Unless you decide to treat your business as internal customers and establish a Service Delivery framework which includes clearly defined SLA’s and OLA’s, the objective of cost savings and efficiency cannot be achieved. The reason being, in a mere centralization effort there is no scope for continuous improvement and customer delight that throw up data for continuous innovation and cost savings. Hence its vital to understand that to set up a successful Shared Services Center, it important to go beyond centralization.

2. ERP implementation is not Shared Services.

Some of the top notch software firms approach organizations and convince them them to invest in a full fledged ERP systems to simplify their processes. But leaders need to beware, as they may actually get conned and end up losing large amounts of money and precious time, by buying more than what is required.

I often relate an ERP to “Fighter Jets”, because the capability of the ERP’s no doubt is highly engineered and beneficial. But as in handling fighter jets you need an ecosystem of trained pilots, engineers and service staff working in a disciplined environment. Likewise, in a ERP implementation, it is imperative to have a clearly defined business case coupled along with clear ROI numbers that justifies the investment. What you will need is an SSC organization that governs not only the ERP implementation but also defines detailed operating procedures to manage the ERP and achieve the ROI.

3. Shared Services does not lead to loss of control.

A common misunderstanding among senior leaders of organizations is that an SSC will lead to loss of control that they previously had on their support functions. As services are delivered online through a defined channel and service delivery methodology, leaders may feel there is no direct control over the day to day operations of their functions, which they earlier had. However with a transparent governance structure built into the SSC delivery framework, the misconception of losing control will fade away. The governance mechanism will deliver insights through KPI’s, SLA’s and OLA’s which will actually enable the leaders to make faster decisions and run their functions much more effectively.

4. Shared Services is not only for large organizations.

Although an SSC is a must have for large global organisations, the SSC ways of working is also highly recommended for small and medium businesses. The early adoption of SSC delivery framework will enable support functions to work in a highly responsive and cost effective manner. Another major benefit that smaller organizations can derive out of an SSC is to eliminate bureaucracy anderadicate duplication of work, which will also result in faster growth and agility for a growing company.

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