Think Marketing to Accelerate Shared Services and BPO Growth

No one gets on the bandwagon without scale.

So you’ve dragged your organization kicking and screaming through a few transitions to a shared services and/or outsourced business model, and now it’s time to spread the wealth to the rest of the organization.  You and your team might think that the next logical step is to focus inward, building up more process skills, identify opportunities to move up or across the value chain, deepen governance and reporting, work up new marketing strategies, or search for that holy grail called innovation.  However, these vital efforts are merely table stakes in the provisioning of shared services; ‘build it better and they will come’ is not a viable approach to scaling shared services in most organizations.

Particularly if the move to a shared services or outsourced model is not mandatory, it’s imperative for the shared services or sourcing organization to deliver growth. Without growth, shared services and outsourcing are not much more than a corporate experiment at best, or a hobby, as opposed to a real, sustainable change in the business model. Global services organizations—whether comprised of some form of shared services, or outsourcing –or both—must be held accountable to scale. And the key to scale…believe it or not…is marketing.

Marketing? We think that the benefits of globalizing services delivery should speak for themselves. Yet every corporate change has to be marketed; one of the reasons so many corporate transformation programs fail is because the sponsors forget that any concept needs to be actively, aggressively and consistently sold to stakeholders. Shared services and outsourcing programs are no exception.

Marketing shared services is not a replay of the American sitcom Madmen, relegated to the production of fancy brochures, or videos with a great soundtrack. Rather, marketing in the shared services/outsourcing context is a formal, integrated process put into place to inform an entity of services that may be of interest to customers, and then respond to how they buy—the strategy to use in sales, communications and business development. It forms the underlying structure for business development, sales techniques, and communication, and is the process through which strong customer relationships and enterprise value is created. Very simply, marketing serves to identify the customer, satisfy the customer, and keep the customer coming back.

Granted, shared services and sourcing organizations already incorporate some elements of marketing. Account managers, by listening to their clients and satisfying their need through the right solution, are marketing. Change management is marketing.  Even clear, concise Powerpoints are a marketing tool. But very few shared services organizations have a formal marketing function box on their org charts, developing an institutionalized marketing process which deliberately and successfully scales the operation.

But with most of the shared services talent concentrated in sourcing and program design, operations, transition, marketing is usually viewed as a slick business, dressing up a proposition that something that should not have to be sold to the organization.

Granted, shared services organizations incorporate some elements of marketing. Account managers, by listening to their clients and satisfying their need through the right solution, are marketing. Change management is marketing.  Even clear, concise Powerpoints are part of marketing. But very few shared services organizations have a formal marketing function box on their org charts with an institutionalized marketing process designed to achieve scale.

Why is scale a shared services and outsourcing imperative?

Without scale any services initiative has limited impact. Thinking about most organizations, and what percentage of functions—enabling or business operations– are delivered through a global services initiative, the numbers in aggregate are still relatively small. With the Global 5000 employing on average of almost 30,000 employees, and European based companies on the list almost 50,000, it’s obvious that 100 or 200 FTEs in a global delivery model is not much more than an organizational experiment.  If shared services and outsourcing is being used to truly change the business model, making it more global, or efficient, or nimble, scale is mandatory for a range of reasons:

• Critical to achieve maximum benefit for stakeholders Achieving scale is more than a reflection of an organization’s appetite to truly evolve the business model; it’s also critical to deliver maximum benefit to stakeholders. Think about a smallish shared services operation, or a 50 FTE equivalent outsourcing relationship. Then remind yourself about the extent of investment it took to staff the sourcing and transition functions, fund consultants, develop the IP necessary to hone tools such as RFPs and evaluation criteria, develop business cases and migration plans, and redesign the organization.  Think about the cost of implementing the model—both in additional resources, and the time spent by the in-house team.  Consider the time spend in finding and training the right team to operate and govern. It takes a substantial effort to get in gear to implement and run a shared services or outsourcing operation.
• Gets executive attention Let’s be honest—small corporate initiatives get little executive attention. Why should a CXO use his organizational capital to support a shared services or outsourcing initiative that stalls at a fraction of his headcount? Many in the C-suite will look for leadership from the shared services or sourcing function as a validation of his or her mandate before investing time and effort persuading leadership to get onto the bandwagon. And scale talks.
• Creates momentum Don’t underestimate the persuasive power of momentum. How many of us want to visibly get on a corporate bandwagon that appears to be moving very slowly? The herd instinct is true in shared services and outsourcing scale; internal clients look around the organization; if they see few of their peers getting onboard, they think that they can continue to sit it out the game.
• Exploits synergies Without scale, there are limited synergies to offer clients as a vital part of the value proposition.  Shared services and outsourcing, in their simplest forms, are about creating synergies by bolting two or more processes or functions together to produce a result not independently obtainable. For example, if a shared services operation focuses on changing the delivery just one component of finance and accounting, say accounts payable, the opportunity to derive more value from bolting on procurement is lost. Or if recruitment is not linked with talent management, value is lost.
• Delivers return Lastly, scale…and only scale…delivers ROI. The total cost of ownership of shared services and outsourcing is not always fully tracked. Experience suggests that, in the early- to-mid stages of shared services formation or outsourcing implementation, the cost of migration, management and governance can be as much as one fourth of the cost of a head in a sourced model—even more if the operation is in a low cost location. This investment must be made to pay off by leveraging it across an organization or contract which scales rapidly.

Scaling is difficult for any business. And shared services, as a business, is actually a company within a company with an imperative to grow. Some of the luckier organizations have a man or woman at the top demanding that every function, geography or business unit participate, alleviating the need to market, but most relegate the responsibility to drive scale to the shared services/sourcing organization.

But the challenge is that our shared services and sourcing organizations are not designed to aggressively scale. Most have been established with a “build it and they will come” order taker approach, based on the belief that the business lines and enabling functions, with a minimal or modest level of communication, will “get” the value proposition, and behave accordingly. Therefore, organizations are designed as “order takers” primarily focusing on developing the right solution, ensuring operational excellence and implementing the right governance structure to optimize relationships, put in place the right controls, manage risk and make sure escalation and response models work.

But persuading stakeholders to participate is:

• Goes against the grain If the shared services unit’s charge is consolidating, harmonizing and standardizing enabling functions such as finance and accounting or HR, you are going against the grain, especially if your organization  is has historically embedded these functions within a business unit or geographically led organization, it’s an unwelcome and resisted structural change. Achieving shared services and BPO scale in a company that is not led from the center means that the sourcing organization is fighting on a range of fronts, and has to persuade each corporate fiefdom to participate. They see shared services as a taking and loss of control.
• Seen as “empire building” Leadership is seen as ‘empire building’ at the expense of business line or geographic needs and customer services. As a result, shared services is often seen as a threat and a duplication of what’s already in place, often less effective, not improved and sometimes costing more as a result of standardization.  If a function is transferred to central management, it often means that the business line or geo can no longer manipulate the budget or service standards to meet its own needs.
• Stalls naturally Scaling is like trying to lose weight. After a period of time, often two to three years, the shared services organization hits a natural plateau. There are several contributors —fatigue on the part of the shared services or sourcing team, or the “we’ve got it right” or the “enough is enough” syndrome which is voiced or in the subconscious of the internal customer. There’s often a sense that “we’ve contributed our fair share” and that any further migration of the function’s processes cuts perilously close to the core operations.

Marketing is imperative.

People who engaged in branding seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. Great outsourcing brands are built on consistently pushing out the value proposition, differentiation, thought leadership

Brand is critical to scaling shared services. Without a brand, stakeholders do not know what the shared services/sourcing organization stands for, and how they benefit by investing in a relationship. Think Coca Cola—by buying and drinking Coke, one forms a caloric and caffeine-laden relationship with a global leader. We know it’s safe to drink coke around the world, and if you believe in their new branding, you are living positively. In short, brand helps you convey that it’s safe….and smart… to make the shift to a new business model.

• Shared services brands are visual, consistent demonstration of leadership in the shift to a new business model. Without a brand, the stakeholder does not
• Marketing influences and enables stakeholders to buy–communicating benefits, case studies, and trends– by messaging successes and the opinions of supporters at the right time and place and through the right methods and channels
• Marketing is joined at the hip with the solutioning process.
• Marketing shared services and BPO is easier than you think. In fact, all of you are doing some form of marketing when you pitch to a client, develop a solution, sit in a governance meeting or resolve an issue. But effective marketing is a process, not every member of your team intuitively building a relationship or explaining a concept. It is a process—just like any other—that anticipate challenges and solves them, that has a toolkit, that is repeatable, and that has responsibilities and accountabilities.
• Marketing is measurable—it’s possible.

Leverage all channels Effective shared services marketeers wake up every morning, look at their diaries, and think about how they can leverage the power of every meeting and every relationship they encounter that day. They actively look for situations to leverage relationships We all think our organizations are the most important. Yet in major organizations, shared services operations, especially early stage, don’t have the reputation they need to accelerate growth. How do you quickly position the organization? By leveraging relationships

Anticipate rejection Successful marketeers go into any interaction armed with tested responses to every objection. It’s part of the marketing process.  Effective marketing processes acknowledge that even inclined buyers have reservations, while others are consumed with real fears about the sourced model.

Shared services and outsourcing is a consultative sale. No one likes to be told what to do, and shared services is no exception. But there is a solution—customize the approach to the sell.

Too many of us, marketing is all about timing– reading the client and pushing the right  sale at the optimum time. And too often, in shared services and bpo, the sale never scales because it’s too small. To some extent, marketing shared services and bpo to achieve any sort of scale is like seduction. Push too hard too soon and you scare the object of your affections off. But wait long enough…..

Focus on the long haul  Most organizations focus on sales, rather than seduction. What’s the difference when it comes to shared services marketing? Seduction is about  forging a relationship with a stakeholder that will bear fruit over time, whereas a sale is about closing a transaction that encompasses whatever the stakeholder will buy at a given point of time.

• Seduction is a great marketing technique to gain scale. When a shared services executive takes the time to build trust through consistent engagement, deals tend to be much larger….and more strategic.
• Seduction is a natural marketing approach for shared services leaders. Because internal functions are not generally seen as selling—which is the first reaction when a BPO provider darkens any door, it is advantaged
• Seduction demands patience…and battle planning

Target, not blanket Without marketing, the growth process looks a bit like young children playing football, everyone swarming whenever the ball is in play. Marketing  identifies which stakeholders have highest propensity to buy and scale and focuses sales initiatives accordingly.

Targeting requires the shared services organization to track  implications of business cycles, personalities and internal events to identify opportunities to scale, developing a predictive model that suggests when the customer will buy. It drives a tiered strategy for account management, suggesting where an investment in an on-site manager or regular meetings will pay off in scale.  And, as importantly, targeting institutionalizes the approach to perennial tire kickers and others who just won’t move processes, or have the predilection to throw a few positions over the fence just to show they are good corporate citizens.