Satisfaction: The Key to Raising Shared Services Value
Written by Mike Markos

Satisfaction is the keystone to recognizing value in shared services just as it is when a consumer buys a product or service. When shared services leaders explore how they might move up the value chain by performing more and more sophisticated services, the first hurdle to cross is customer satisfaction. Only when the customer recognizes value in the current services, is he or she going to sign up for additional services. It comes down to the principle that we will do more business with people when we are satisfied and less when we are dissatisfied. At one company, the shared services group recently used billing data to develop a new set of information that pointed out price discounting inconsistencies across locally-managed units. When these were addressed by the businesses, millions of dollars were gained. We asked the leader of one of the units, and they were not fans of shared services, how he felt about the new set of discounting information. He said it was a terrific tool and that his people would be ecstatic about it “had it not come from shared services”. Their dissatisfaction with other aspects of shared services made it hard to have even a conversation about value. Interestingly, the business unit’s level of dissatisfaction was probably not even fair and was based upon a few incidents and some personal gripes. Yet the dissatisfaction was real, fair or not.

We gained significant insights into shared services customer satisfaction in talking with business leaders (the customers) and shared services leaders. Most companies do a poor job in monitoring and managing customer satisfaction. First of all, they do not fully understand satisfaction. They want customers to be satisfied and certainly deliver the best services they can. They measure satisfaction in general ways with surveys, and most are not satisfied with this mechanism. Furthermore, at some level many shared services people believe the customer is not really “The Customer” because they are part of the same company. And the customer often believes that shared services is a processing unit and not a supplier. We learned that although satisfaction with mature and competent shared services centers is reasonably good, customers are certainly not “delighted”. So the stage is set with a poor understanding of the relationship between satisfaction and value, use of only rudimentary tools, and only limited recognition on the part of shared services and the customer that there is an underlying customer – supplier relationship to be managed.

Current Satisfaction with Shared Services

Customers of shared services told us what is better and what is worse since shared services came into existence. The answers were consistent across interviewees and across companies:

What's Better What's Worse
Cost savings Slow response and recovery
Standardized processes Inflexibility
Controllership Risk of business unit "working for shared services"
Common systems Lost decision rights
Consistent process metrics Additional bureaucracy
Accessibility and quality of information Disconnection from the business
Customer service management Lack of local personal support
Quality in the process Local desire to "touch everything"

Looking at what is “better” suggests that shared services has largely delivered on what they were chartered to do up to this point. They have saved their companies tremendous amounts of money. They have improved processes, services, and control. They have actually improved service and frequently measure the improvements. These are all tangible benefits and substantial accomplishments. Yet it is obviously not enough, as customers are still not delighted. When we look at what is worse, we see some of the missing ingredients: all intangibles. It just does not “feel” as good as it did when the shared service activities were performed locally, even if it really is better managed today. The intangible factors in the “worse” column on the chart need to be dealt with, but the solutions cannot be easily ”engineered”. This situation persists even in companies that have among the best shared services organizations. It is not really just a set of gripes. We believe the situation remains because shared services has been so focused on the tangible and easily-measured that they let the intangibles fall where they may. Additionally, senior management shares much of the blame for not dealing with the satisfaction issues. This is so different from how business to business relationships are managed in better companies with their external customers. The intangibles are given as much or more attention as the tangibles. Relationships and communication are the key. Senior management gets involved in relationships with important customers. It is easy to see that growing the relationships and moving up the value chain go hand in hand. In the end, satisfaction and realized value will be better when intangibles are managed aggressively.

Satisfaction Drivers

We also asked shared services leaders, their customers, and the people they report to what they thought were the important drivers of satisfaction. The following chart shows the somewhat surprising results.

It was not surprising that customers and shared services leaders all agree that the integrity of the process is key, and that this shows up in the perceived great importance of accuracy, timeliness, and controls. What was surprising, though, was that costs were viewed closer to the bottom of the list. Not that costs are unimportant. Rather, most shared services have already saved very significant amounts and achieved great productivity improvements. With those battles largely won, the focus of most customers is now on other satisfaction drivers. In spite of this, most shared services leaders have a strong bias to cost as the primary performance driver. And interestingly, shared services people assigned a greater importance to cost than did their customer counterparts.

We see that information access is a significant factor, and that value beyond shared services is less of a factor today. The more visionary shared services and business leaders told us they would expect those two factors to move up significantly in importance over the next few years as shared services finds new ways to add even more value. They also told us that moving up the value chain, especially addressing “Business Results Value”, is uncharted territory.

Measuring Satisfaction

Leading shared services organizations all put considerable effort into measuring their performance, and most of them measure satisfaction explicitly through surveys, at least periodically. They often think of satisfaction separately and conduct surveys to assess “percent satisfied or very satisfied”. In reality, answers to surveys mean little. It is a lot like polling before elections. The polls are interesting and often inaccurate, but it is only the actual vote that counts. Similarly, if shared services customers are not looking for new opportunities for shared services, they are truly not experiencing the highest levels of satisfaction.

Shared services organizations develop extensive monthly scorecards, mostly reporting on factors not directly thought of as satisfaction, and report on costs, volumes, productivity, and, less frequently, speed, and quality. Occasionally they measure performance of the entire processes including upstream activities. Several companies have scorecards that include a qualitative section on initiatives and accomplishments. Scorecards range from a brief one to two page overview to multi-page graphical documents measuring multiple dimensions of each area. These scorecards are often distributed to functional heads and other key people in the customer organizations. In a few cases the measurements are not shared broadly, but rather are reviewed with upper management. Concerns of shared services leaders include whether the scorecards are even being reviewed and whether the data is credible. Clearly, performance measurement has come a very long way for administrative processes since the pre-shared services days.

As shared services seeks to move up the value chain, the measurements they employ need to refocus on the types of value they are seeking to deliver, whether economic, process integrity, and/or business results. As they report on value drivers, the level of satisfaction will be more obvious because this will foster discussion of the value created and pave the way for moving up the chain. It will reduce the need for simplistic surveys asking if customers are “1) more than satisfied, 2) satisfied, 3) somewhat satisfied, 4) dissatisfied” and replace these approaches with solid discussion. Armed with facts about value, shared services leaders can hold productive discussions of satisfaction with customers.

Pathway to Increased Satisfaction

Nearly every shared services organization can benefit from managing satisfaction better. The payoff will be increased value to the company as the assets resident in shared services are leveraged. There are three steps on the path to managing for increased satisfaction.

  1. Leaders must first recognize that satisfaction and value are inextricably linked. As such, they need to open discussions about the relationship between satisfaction and value with their employees and other stakeholders. It is important that all shared services employees understand how satisfaction drives value and what their role is in delivering satisfaction. It is just as critical that customers understand and embrace this as well, especially their own role in driving value in shared services.
  2. Leaders need to work on the intangibles of satisfaction, especially if they are generally successful on the more tangible components. Satisfaction levels for tangibles and intangibles both need attention, but are managed differently. The challenge relative to the intangibles is to explore root causes of dissatisfaction through open dialog, communications, and relationship building with customers.
  3. Third, they need to re-balance their performance scorecards to focus on value as the driver of satisfaction. Scorecards should focus on satisfaction drivers and components of actual value. Also shared services needs to target and tailor scorecards to their audiences. The company CFO may be most interested in productivity while business unit heads may be far more interested in timeliness and quality. Finally, it is important to leverage the scorecards into tools, components, and facilitators of satisfaction discussions. Discussion should focus on issues, plans, and necessary actions, as uncovered from the scorecard analysis.

The next article in our series with address communications and relationships and how they impact satisfaction and value.