What´s the best structure/org chart for a Shared Business Services?
I am in the process of creating the SBS structure and I would like to know the current practices and the span of control for each supervisor/manager to be efficient
The best structure includes an end to end view of the service you are outsourcing.
We can outsource anything these days. Outsourcing does not transfer legal or regulatory responsibility and is typically managed as either a managed service or outsourced completely.
A buyer and HR are the first places to check with in regard to company policies and current models used by others. If you are the first. I'd need more details to do a good job on direction. ;)
The size and structure of each organization should determine how the synergy will operate...what each bring on the table will also determine who call the shot and how the organization should operate.
What I have found to be most effective in helping define organizational structure for shared services is to categorize the key business process activities occurring within the shared service along two dimensions: 1. Centralized vs. decentralized and 2. Corporate level vs. business unit level. For example, for the procurement process, the actual ordering of the goods/ services is probably a decentralized/ BU level activity (e.g., manufacturing raw material), but they are required to buy off a company/ BU wide contract (negotiated and implemented at the Corporate/ BU level).
Thorough this categorization, one can they begin to organize like activities, which can be grouped into specific roles/ responsibilities at the appropriate organizational level (e.g., corporate, BU, specific company location). From this, the final structure should be easily defined.
For shared business services structure could depend on the type of services offered. I can still give some suggestions based on past experiences.
It is good to keep two main structures...as organzation for delivery and a separate organization for Relationship/ sales. This creates a healthy pressure on each organization, one to sell more and the other to deliver more and excel in quality.
Further it makes sense to create verticals along industry lines, both in the relationship and the delivery organizations. Usually there would be some industry specific aspects of the services, and you need to have the requisite knowledge in delivery to offer those specific elements, while clients would like Relationship team to undertsand industry nuances, speak the language and quickly grasp business specific issues to be able to contribute in defining and identifying solutions.
If you have more questions, we can try and address them.
Hi Xavier: In my experience, there is no one structure that fits all needs. My best advice for you is to map out the ideal process flow first--who is going to do what and when--and then let your ideal process inform the structure. The late Dr. Jay Galbraith, world famous organization design expert, has written extensively about this. In a nutshell, his advice is "Process first, structure after."
Hi Xavier, you pose an interesting question.
I am assuming that you have already discussed the viability of out sourcing.
From what I am understanding you may like to look at this as a management issue
If this is the case, you may wish to separate what is "operational" and "Management" Along with how they function and how they are currently managed.
I.e micro or macro.
In some cases you can change the management style which will free up resources.
For instants, for simple day to day functions, can be handled by exception. So that it becomes self managed within what you set up as standard parameters.
Therefore management attention is focused only on what falls out side both the high and low.
Naturally you would still rely on standard reporting, and overseeing management,
Areas that have similar functions can be cross managed, to utilize management skills. This would also help in making your reporting and management structure flatter.
Your control and span is relating to function .
Your management span and control is related how you set that function up.
You provide more accountability and authority to the people who are doing the work. After all 9/10 of the time they will know what they are doing.
For any shared service or collaborative working to be a success all parties must first sign up to clear vision and values. Getting your brand story right, and engaging the whole team behind this first, is critical. This work will also then inform the best team structure, roles and responsibilities.
I suppose the intend is to improve bottom line. This required very detailed information to determine the extend of services, the level of the complications, the impact to stakeholders. So that you can position the SBS and start to design your SBS. When design your SBS, you may use Business Model Canvas, or you may like to use (Viable Business Model) VBM-At-A-Glance to kick-start. If you like to use VBM-At-A-Glance just drop me a message, I can send it to you for free.
Experience tells me you have 2 completely different types of personalities if I'm understanding Enterprise and Finance to mean what I think. They operate different, they think different, and most importantly they are motivated differently. I might suggest you be mindful of what makes them tick if you want to ensure sustainable growth.
Another point to consider might be the plentiful evidence that a 1:8 ratio of direct reports generally represents the maximum ratio for meaningful results. Any more than that you could experience diminishing returns over time. Hard to be an effective leader when you're spread too thin to effectively teach, coach and motivate your team. You mentioned a potential of a 1:10 ratio. This means you will potentially give up on things that might be too important to give up.
Sounding like leaving well enough alone might be a good play here unless something is missing in the description provided. Hope that helps...
You can also show a dotted line for dual reporting relationships on your org chart.
The answer lies in the specifics of the business and how it adds value. As much as you'd like to have a "best practice" the answer is going to be specific to the your own industry. I'd second Seth's advice to consider the Business Model Canvas, with the caveat that it takes some work to develop one.
Before you do the nitty gritty I'd recommend working on a Business Model Canvas and discuss it first internally and then create a business model canvas that you can easily discuss both internally and then with other key partners.
Unless you have separate and different Service Level Agreements with the different groups served, I wouldn't do anything special in terms of structure.
Your organization chart should be based on how you are going to provide the shared services -- How are you going to do the work you plan on doing? Once you have "the way that you are going to work," those decisions and structure will inform your organization. You want your organization to impede your work flow as little as possible (in my vernacular, every line on an org chart is an impedance introduced into the organization.
My experience leads me to say: Don't engage in shared business services. If your businesses are operating at a profit, let them operate independently and avoid shared services. If you feel the only way to achieve profitability is to move to shared services (hard to believe) then reorganize the entire company structures. Matrix reporting is a sham, and undermines everyone involved.
HI Xavier - what business are you in? It makes a difference. What is the size of your SBS team and their main levels of expertise? There's really no one size fits all for this but am happy to comment if you can give me more info.
There are a set of functions that are generic to all businesses - marketing, sales, accounting, administration, production/service delivery, human resources (where applicable), procurement/purchasing, compliance.
They are the main ones. The org chart needs to address them and the roles/activities relevant to your business.
Each function must be managed. A sole trader will need to manage them all. Usually, some are outsourced or allocated to employees.
Rather than look at a span of control (by merging functions), keep it simple by defining roles and responsibilities for each functional manager, and allocate one or more functions to a person.
Volume of work throughput will determine when you need to hire more staff and allocate activities within the functional areas to them.
Hope this helps.