Patrick O'Hagan: Shared Services



Research shows that the shared services model has fallen well short of its full potential, namely because it doesn't deliver enough value to business leaders. Patrick O'Hagan, a partner with Bain's Performance Improvement practice, defines a new approach called Share Smarter, Serve Better, and discusses how successful companies can accelerate profitable growth using shared services.

Read the transcript below.

PATRICK O'HAGAN: Shared services is an old concept; it's widely adopted by Fortune 500 companies. But our research shows the model has often fallen well short of full potential, for a couple reasons. One is it's frequently not actually adding enough value to business leaders beyond delivering some savings. And two is the scope of support is often too narrow. And yet, successful companies are looking to accelerate profitable growth. And they need to and they want to share scale and expertise across the organization to do that. And so we think shared services needs to be a critical asset of the company.

But what's required is a fundamentally new approach to shared services. And that's what we call Share Smarter, Serve Better. So Share Smarter is about starting with the P&Ls of the business units and understanding what is truly going to fuel them in the coming years—so is it new product launch, or M&A, or better pricing, higher customer loyalty—and then working back to figure out what's the suite of services that's most essential to enabling that P&L performance. And that takes us into new areas, like market and customer intelligence, and innovation, and pricing, and contracting, and even, increasingly, advanced analytics and predictive analytics.

And then the second piece is Serve Better. And that is about ensuring that the service-delivery model is truly customer-centric. That really means treating your internal customers as well as you treat your external customers. And that requires more agile service delivery, better and simpler pricing, and actually collecting and acting on customer feedback through a Net Promoter System. What we're finding is this powerful combination of Share Smarter, Serve Better is helping organizations unlock value well beyond savings, including reducing complexity, freeing up time, and overall helping the business to focus on winning with customers.