‘Moving beyond cost arbitrage and delivering value adds’ has often been used as a preface in every kind of discussion about GICs/shared services industry, but surely there exists a certain ambiguity around the term, Value.
More often than not, it’s construed as an indication of cost optimization efforts and rarely does correspond to actual positive impact in productivity or superior customer service. The performance dashboards presented at board meetings depict presumed value-adds which the GIC organizations interpret as a sign of satisfactory and agreeable service. However, it may not be necessarily relevant to what the executive board cares about. Nevertheless, there seems a marked difference between the perception of Home-Office teams (HQ/customers) and of GIC teams on various aspects of Value.
Key Performance Metrics (KPIs): For years, GICs have been using traditional metrics like SLAs, OLAs & other organization-specific KPIs to showcase its performance. Mid-level management teams are required to spend a significant amount of time and effort in defining the metrics, tracking the performance against set expectations, and projecting it to appropriate stakeholder groups.
Even though it symbolizes a well-intended approach and honest efforts, the meticulously articulated metrics may not be at all applicable to the business priorities. Inadvertently, the 80-20 rule seems to apply here as well, wherein the delivery teams think they have met 80% of the success criteria while the customers or stakeholders may only see 20% of the benefits case realized in their larger scheme of things. Perhaps, this could be one of the reasons for Offshore GICs to receive low NPS ratings.
Most of the metrics should ideally be linked to executive goals or overall enterprise priorities. However, not every level of staff has an equal understanding of how it translates into creating value, resulting in a lack of motivation to refine an existing set of metrics.
The roots for this approach sometimes lie in the past experiences of the managers, maybe someplace in the outsourcing industry where the billing for services is directly proportional to the time spent by an FTE on a particular activity. That’s where the need arises to spread GIC education amongst all staff, particularly about its operating models. When a team member is asked to pull out a specific report, he/she needs to recognize how those reporting figures and data could impact multiple organization layers and how it helps other related teams to achieve wider organizational goals.