The architectural implications of shared services

 

Shared services is widely employed in many industry sectors and is gaining increasing traction as organizations, particularly those subject to continuing cost pressures look for ways to control costs.  For example, in December 2012 the UK government set out its next generation shared services strategy to enable savings of £400-600m per year.  Shared services take many forms, but regardless of the type of shared service, when properly executed it can deliver a range of benefits.  Benefits can result from economies of scale or scope, the ability to negotiate from a stronger consolidated base and through adoption of streamlined, common business processes.  A shared services model can also enable groups to share knowledge and best practice as well as the services themselves.   However, these benefits must be balanced with the flexibility clients (internal or external) require. 

Shareable services typically include corporate service processes such as HR, procurement and finance and accounting. Sharing of enabling capabilities typically include IT infrastructure, workflow, data repositories as well as domain-specific expertise and resources.  Viewed as business services, they can be defined in terms of outcomes and external dependencies using a combination of deliverables, processes, roles, and skills.  This way EAs can help position the shared services within the organization’s architectural construct in terms of service provision to other functions within the business or to external partners or customers.

As these shared services become subject to supply and demand dynamics in their markets, EAs play a critical role in defining a business service management model to help manage these dynamics.  This will include various service capabilities, including:

Service customer management – This involves identifying unique customer needs and assuming responsibility for the overall satisfaction with the customer.  It may also include contract management to formalize arrangements with customers.

Service portfolio management – This involves determining what services to offer, ensuring their value exceeds the cost, and assessing the overall performance of the services being delivered to provide feedback into a planning and improvement program.

Service delivery management- This involves service delivery, performance monitoring and reporting, as well as service quality assurance.  It also involves identifying cross-service opportunities.

Service quality assurance – This involves ensuring services meet or exceed customer expectations and agreed-on service-level agreements.  It also involves proactively monitoring service outcomes and proactive service improvements. This is applied at the service outcome level as well as the relationship and service delivery levels.

These capabilities enables EAs to establish a set of standards that enables business services to be defined, transacted and managed in a more effective way.  As interest in shared service continues to grow, EAs can expect to see more attention focused on these areas.