Shared services

In chapter 1 of the book we identify Operations Management as just one (very important) function within the organisation.  And in chapter 14 we identify that each function of the firm needs a strategy that contributes to the overall business strategy (see Figures 14. and 14.3).  But nowhere do we really discuss the ‘operation’ of these other functions of the organisation – such as human resources, marketing, finance and accounting.

One way to think of these is that they are service operations that support the business or organisation.  All of the functional areas have processes to be planned and managed.  And just as in the OM arena, these processes can be well designed, effective and efficient, or be poorly designed, unproductive and dysfunctional.  Poor performance may especially be the case if each functional activity becomes a ‘silo’ ie not well connected to the rest of the organisation and focused solely on its own agenda.  Such silos may be created where the function is physically separate from the rest of the organisation, geographically dispersed, or not immersed in an organisation-wide culture.

To overcome this, large organisations in particular are thinking in terms of ‘shared services’.  This concept is explained and discussed on the Deloittes Consulting website.  Basically the idea is to combine functional activities together, so that their processes are the same as, or consistent with, each other.  For instance, rather than each function plan its own outsourcing policy and devise its own service level agreements, these can be established organisation-wide.  A key trend is the appointment of a senior executive whose role is to manage the organisation’s shared services.

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