The benefits and common pitfalls of shared services
The benefits and common pitfalls colleges and universities experience when bringing resources together through shared services.
Over the last several years, the concept of shared services – centralizing and consolidating functions within one shared team – has gained popularity in higher education. The pandemic and its budgetary impacts spurred many colleges and universities to look at ways to bring functions together – including shared IT, HR, finance, or student services – as a way to reduce costs.
While cost reduction and process improvement are important benefits during a critical time for higher education, shared services are also key to helping schools become models of innovation and service excellence. The keyword in “shared services” is services – and when we bring together teams in a methodical and intentional way, institutions can strike the right balance between process and innovation to make systems work better for students and staff.
But for large and traditionally siloed institutions, the process of bringing services together can come with a high risk of failure. It needs to be implemented for the right reasons and with the appropriate approach, resources, and support – and when we’re able to think differently about how work gets done, we create stronger institutions.
What shared services are – and what they’re not
Shared services are service teams with a specialization.
Traditionally, academic and administrative departments relied on embedded personnel, such as an administrative assistant or manager, to assist with HR, IT, finance, and even students’ needs.
While these administrative staff members may have had strong department knowledge, they often lacked the necessary expertise or bandwidth to provide effective and efficient support in all of these areas. Shared service models move these functional roles to a team-based approach to balance workloads, capitalize on staff expertise, and provide services across a division, college, school, or university.
Shared services are not a direct gateway to saving money.
Centralizing functions and streamlining processes will reduce costs over time, but it’s important for leadership and decision-makers to first understand that their services are only as good as the processes and teams behind them. If cost reduction is the primary goal, we risk setting our institutions up for failure by not fully investing in the teams and structures to make it successful.
Examples of shared services
Shared-service models are not new for businesses and other organizations. Within higher education, however, the concept of shared services is still rather novel. However, given the sheer number of individuals institutions serve, including students and staff, the benefits of consolidating and combining efforts can be significant.
One-stop student services
We’ve talked before about the critical role of student-centric services, and financial aid is a prime example. Financial aid counselors are often required to provide both frontline customer service and aid administration. When these roles are held at the department level, it slows down the awarding process and provides a disjointed service experience, forcing students to go through multiple touchpoints for related needs.
Within a shared service model, financial aid is incorporated into a one-stop student services center that provides a unified experience for students and families to access all of their enrollment, academic records, account information, and payment needs.
IT
In higher ed, it’s also common for departments to employ their own IT staff member. These individuals may be tasked with both serving as a department help desk as well as purchasing and maintaining hardware and software.
Schools with shared IT services have a centralized help desk for managing support tickets and a comprehensive system for acquiring, maintaining, and updating services and systems. Some institutions also embed shared IT resources at a divisional level to provide more localized support. While this model saves overhead costs and cuts redundancies, it allows institutions to ensure consistency and compatibility of their systems, administer cohesive system updates, and reduce the risk of cybersecurity vulnerability.
Human resources
If a transaction or process can be standardized, it is a good candidate for shared-service delivery. University-wide Human Resources divisions have become more commonplace for delivering services such as payroll and benefits management, recruitment activities, and employee training programs, among other things.
Similar to other institutional units, HR divisions have both transactional and strategic work to accomplish. By centralizing transactional work in an HR Service Center, functional HR experts can focus on strategic activities rather than frontline transaction processing. This division of responsibilities contributes to streamlined processes and improved service quality for employees in particular.
Implementing HR shared services also creates an opportunity for institutions to pursue a Business Partner Service Model, which embeds strategic HR partners or liaisons within its divisions or academic units who serve as shared resources, providing expert guidance and support to leaders and managers as they seek to align business and people practices.
The benefits of shared services in higher education – and where it can go wrong
Creating shared services teams encourages cross-functional collaboration to accomplish shared tasks under a unified framework. The benefits can include:
Process improvement – Building shared teams can effectively reduce duplication and eliminate inconsistent policies and practices across a division, school, or institution.
Centralized expertise – Rather than having tasks delegated to individuals with multiple responsibilities, hiring for team-based models allows universities to focus on hiring experienced personnel for these critical roles.
Service excellence – Combining services allows schools to be intentional in improving their overall service experience, including understanding the needs of their audience, evaluating their service touchpoints, and providing best-in-class practices.
Cost savings – By taking roles out of the departments and creating cohesive teams, schools can ultimately reduce overhead and personnel costs.
Mission success – By moving these functions to centralized teams, academic departments can be more focused in meeting and fulfilling their academic missions.
That being said, instituting shared services requires significant organizational change. Because of the scale of change within higher education, it may also require cultural and systemic shifts. Again, if the right research, planning, training, and processes are not established before shared services are rolled out, there’s a high risk of failure.
When shared services fail, it’s generally a result of one of the following:
Cutting costs were prioritized over other goals. Understaffing service teams is one of the most common reasons shared service models fail. A focus on cutting costs may result in not having enough staff – or the right staff – to execute it properly.
The rollout didn’t include process reorientation. Training your teams is equally pivotal to how effective you’ll be in transitioning and rolling out your services. Even the best customer service delivery can’t fix bad processes.
Hiring for function rather than expertise. Excellent service ultimately depends on hiring, supporting, and growing the right people, with the right expertise, who have a heart for service.
Change management was pushed aside for a hasty rollout. By moving too quickly to integrate services, we undermine our employees and our institutional culture. Effective change management requires us to make time and space for proper strategic planning, stakeholder engagement, effective communication, and training and support.
Creating shared services – and effectively delivering on them – requires a meticulous eye and a vision for service excellence. It’s a process that can have significant benefits for all stakeholders, but only if it’s done with the right strategy, planning, and intention.
Interested in exploring higher education consulting to create shared services for your institution? Let’s connect.