All organisations want to deliver the same or enhanced services to customers, but more cost effectively – and to go on reducing costs over time. Yet successful managers don’t put their businesses on a permanent diet that slowly but surely kills them. Instead, they create stronger and more effective operations by stripping out unnecessary activities and using technology wisely.
The last fifteen years have seen a frenzy of organisational change through mergers and acquisitions, spin-offs and organic growth. Often these moves haven’t provided the expected boost to the bottom line. That can be because they struggle to consolidate a tangle of competing infrastructures. Shared service centres can help rationalise operations, strip out duplication, and deliver common processes centrally. The secret is to create an efficient centre while still meeting the individual needs of operating units.
Outsourcing can solve a number of management headaches. Yet those gains are not automatic. It takes a very different kind of organisation to manage outsourced services rather than run them in house. Wise managers evaluate all the options and make sure their operations and governance processes are in the right shape before outsourcing.