Q&A with Neil McEwen, PA Consulting

8/14/2019 Q&A with Neil McEwen, PA Consulting

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Q&A: Neil McEwen, PA Consulting

SSON gets the juice on change management, continuous improvements, and

helping organisations up the efficiency ante

By: Abigail E. La Croix

You have to determine what is doable or not.

Neil McEwen, managing consultant at PA Consulting.

SSON: What are the first steps for companies that are looking to move

toward a shared services or outsourcing framework?

Neil McEwen: A reality check: you have to determine what is doable or not.

Firstly, if it is a very decentralized organization with a small number of people

spread globally, particularly through acquisition, the complexity in making it work

is great. Therefore, you will need to make a business case to verify that an SSO

will deliver for you. In order to make the business case, you have to look at thetotality of the function, and not only shared services with some functional pieces:

it is the whole retained organization. You need to streamline and change roles

and put new operating models in place. Also, change the totality of the function.

A shared services is not a function of cost reduction, but a balance between cost

and quality of service. In the end, you have to look for a payback theory of 18

months.

SSON: What is the most challenging obstacle to overcome in creating an

effective change practice?

NM: As roles and responsibilities shift, the teams most knowledgeable about

business processes and outsourcing often end up in different areas of a company

or leave the organization. Most of the retained staff are usually employees who

formerly engaged in administrative and transactional activities. These workers do

what is customary: setting up shadow systems of familiar functions. As a result,

companies will not generate the cost reduction or efficiency they expect because

of those duplication issues. People do not think fully about the impact on function

and change implication of the business. Everyone severely underestimates

change management and its underlying issues: education on self-service,

retention of staff with the right skill set, and number of people spearheading the

effort.

SSON: What integral factors do you look at when designing a newoperational model for a client?

NM: Capability of regional resource to produce a positive outcome and a strong

internal resource to drive things internally.

SSON: How do you design a new operational model that can offer the

best in class and high standards of service and efficiency while cutting

costs?

NM: If you are thinking about a functional transformation, first decide on a

target operational model. Next, assess what sort of organization you want and

what you are trying to achieve. Then determine how much service quality youwant to build in. You already have in place an internal group of employees to


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service the business Finance, IT and HR amongst others you should view

them as business managers whose reputation stands for results, so they are

equally accountable. You would need a group of experts as part of the retained

resource tier within what is normally a split between Finance/HR payroll, a/c

payable, a/c receivable and benefits across various parts of the organization in

shared services. The critical element is determining how many of those people

you will need, where you are going to position them, and from which venue you

would like them to operate: virtually, regionally or from country-based and/or

global centers. The balance depends on the philosophical organization you want.

SSON: What is the key to managing the change process?

NM: Communication is critical. Involve workers in the decision-making, so they

are a part of the process and would not feel like something is being done to them.

If you make employees part of the change, they would be willing to understand

and accept it.

SSON: How can companies that have integrated a shared services modelfoster a continuous culture of improvements?

NM: Continuity of innovation: if its an outsourced service delivery, you have to

build a continued program of innovation and service improvement into the

contract from the outset. You cant stand still. In theory, you should have a

tighter service level agreement that is well written and documented in an internal

shared services center (SSC).

SSON: How do you help corporations that have adopted the shared

services process improve communications and service delivery?

NM: The first thing in effecting change management is defining all the

components of the group: Identify who the stakeholders are, their positions,

future locations, the issues affecting them, and the level of communication they

would need to effectively operate. Also, involve workers (at all levels) in the

design phase by making them a part of the review team. Reorganize and

restructure aggressively to reduce your HR cost per employee down to a

reasonable benchmark.

SSON: Do you foresee any innovations to up the ante to help

organizations gain efficiency and economies of scale moving forward?

NM: You have two choices. You can move toward a consolidated service businessunit: a separate entity for all G & A functions, which actually delivers financial, IT,

procurement, HR and legal. The other is to change operations from a top-tier

internal SSC to a profit center competing directly with outsourcing providers.

SSON: What are your predictions for the change management process

landscape?

NM: There will be significant activity relating to the organization and

reconstruction of shared services in lower-cost locations such as Germany, Poland

and Hungary within the next few years. Additionally, there will be a surge within

the government sectors both in the US and UK. Overall, outsourcing would

become more accepted.


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Copyright 2008 SSON. All Rights Reserved.

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Q&A with Neil McEwen, PA Consulting