IS THE TRANSFORMATION REQUIRED?

Maximizing the return on human capital investments is uppermost in the minds of executives today, and in many organisations it is the most critical success factor. However, recent survey reveal that despite an ever-increasing rise in HR budgets, the HR function still spends too much time on administrative and transactional activities rather than on HR strategy, which would make a more valued contribution to the business. Clearly, a transformation in HR is still required.

One way to dramatically improve the performance of the HR function - particularly for large, geographically dispersed organisations with multiple lines of business - is through shared services. Consolidating administrative and transactional processing activities within a dedicated administrative facility is not a new concept . Regional shared services supporting finance, IT, travel and expatriate management exist throughout the world. But shared services for HR have mostly been limited to the larger, uniform countries, particularly the United States and the United Kingdom. When done correctly, shared services can deliver significant cost savings and result in better, more efficient services while freeing up resources for activities that enhance human capital.

Some pioneering organisations have successfully multi-country shared services for HR and have achieved the sought-after savings and efficiencies. Although a regional approach to shared services introduces additional challenges, the HR function owes it to its business leadership to explore the potential benefits available from shared services.

Making an investment in shared services hinges on being able to demonstrate that a consolidated service center will provide better services to multiple customers at a reduced cost.