Identification of Shared Services

Identification of Shared Services

There have been various methodologies and techniques adopted from industry for use in identifying opportunities and priorities for Shared Services, with others based around quality and continuous improvement of business processes to support established Shared Services operations. These methodologies are used extensively for standardisation and optimisation of business processes whether or not they are in a Shared Services environment. Some of the more common are described below.

Lean principles stem from developments by the Japanese manufacturing industry, notably Toyota and seek continuous improvement in the name of efficiency. Lean theory places the customer at the centre of the process so that anything that does not create value for the customer is considered to be wasteful and should be eliminated. It requires a thorough understanding of an organisation and its processes or flow of production together with enduring commitment on the part of management and employees to the process of Lean improvement. See also http://en.wikipedia.org/wiki/Lean_manufacturing

Six Sigma: was originally developed by Motorola to systematically improve processes by eliminating defects. A defect is defined as nonconformity of a product or service to its specifications. The core of the Six Sigma methodology is a data-driven, systematic approach to problem solving with a focus on customer impact. Six Sigma asserts the following principles: succeeding at achieving sustained quality improvement requires commitment from the entire organisation, particularly top-level management; continuous efforts to reduce variation in process outputs is key to business success; business processes can be measured, analysed, improved and controlled. See also http://en.wikipedia.org/wiki/Six_Sigma

Systems thinking: used widely in the scientific community, it sets out the inter-related nature and complexity of organisations, encouraging a holistic approach to problem solving. It starts from the principle that issues do not exist in isolation and that any organisation can only be understood in relation to its processes and the way in which they operate together. See also http://en.wikipedia.org/wiki/Systems_thinking

Value Chain Analysis: the value chain categorises the generic value-adding activities of an organisation by identifying primary activities and support activities. Costs and value drivers are identified for each value activity - the aim being to maximise value creation while minimising costs, i.e. to increase the efficiency and effectiveness of an organisation. This approach allows an organisation to gain a better understanding of how its resources are distributed across a range of activities, highlighting those that are of most value from the customer's perspective. When done across an organisation, or organisations, it helps to identify significant areas of duplication and overlap, which would lend themselves to simplification, standardisation and sharing. See also http://en.wikipedia.org/wiki/Value_chain

Value Stream Mapping: part of lean principles and complements six sigma methods borne out of manufacturing, which have since been adopted and used in logistics, supply chain, and service related industries including Shared Services. Many of the leading Shared Services organisations have adopted these methods and principles. The aim is to improve processes and eliminate waste. Value stream mapping captures the whole process from end to end and uses a team approach and performance measures to critique activity. See also http://en.wikipedia.org/wiki/Value_stream_mapping

Lean principles stem from developments by the Japanese manufacturing industry, notably Toyota and seek continuous improvement in the name of efficiency. Lean theory places the customer at the centre of the process so that anything that does not create value for the customer is considered to be wasteful and should be eliminated. It requires a thorough understanding of an organisation and its processes or flow of production together with enduring commitment on the part of management and employees to the process of Lean improvement.
See also http://en.wikipedia.org/wiki/Lean_manufacturing

Six Sigma: was originally developed by Motorola to systematically improve processes by eliminating defects. A defect is defined as nonconformity of a product or service to its specifications. The core of the Six Sigma methodology is a data-driven, systematic approach to problem solving with a focus on customer impact. Six Sigma asserts the following principles:

• succeeding at achieving sustained quality improvement requires commitment from the entire organisation, particularly top-level management;

• continuous efforts to reduce variation in process outputs is key to business success;

• business processes can be measured, analysed, improved and controlled.

See also http://en.wikipedia.org/wiki/Six_Sigma

Systems thinking: used widely in the scientific community, it sets out the inter-related nature and complexity of organisations, encouraging a holistic approach to problem solving. It starts from the principle that issues do not exist in isolation and that any organisation can only be understood in relation to its processes and the way in which they operate together.
See also http://en.wikipedia.org/wiki/Systems_thinking

Value Chain Analysis: the value chain categorises the generic value-adding activities of an organisation by identifying primary activities and support activities. Costs and value drivers are identified for each value activity - the aim being to maximise value creation while minimising costs, i.e. to increase the efficiency and effectiveness of an organisation.
This approach allows an organisation to gain a better understanding of how its resources are distributed across a range of activities, highlighting those that are of most value from the customer's perspective. When done across an organisation, or organisations, it helps to identify significant areas of duplication and overlap, which would lend themselves to simplification, standardisation and sharing.
See also http://en.wikipedia.org/wiki/Value_chain

Value Stream Mapping: part of lean principles and complements six sigma methods borne out of manufacturing, which have since been adopted and used in logistics, supply chain, and service related industries including Shared Services. Many of the leading Shared Services organisations have adopted these methods and principles. The aim is to improve processes and eliminate waste. Value stream mapping captures the whole process from end to end and uses a team approach and performance measures to critique activity.
See also http://en.wikipedia.org/wiki/Value_stream_mapping