Governance and Executive Leadership
Presenters also stressed the role that governance and executive buy-in play in making shared services and outsourcing arrangements work. Lafarge North America, a construction materials company with $3.6 billion in annual revenues, embarked on a shared services strategy for finance in 2000. But in part because the company was unable to put a strong governance structure in place, it saw few gains. "We had no real measurable cost savings and senior management was dissatisfied," explained Randy Hoffman, Lafarge's vice president LCM Financial Services Centre. "We had multiple processes and little accountability through the organization for process. We had no defined process ownership, and, as a result, we did not have a good relationship with our business units."
With consulting help, Lafarge implemented a comprehensive governance model that integrated high-level executive sponsorship, a steering committee, and a customer board. This team was able to make major changes in how the shared service center operated. Detailed service-level agreements were put in place, and governance board members worked with senior management to get their buy-in. The governance board served as a critical change agent that could own processes, filter information flow and bring a business perspective to the shared service center, Hoffman explained. "Executive sponsorship was absolutely essential to make it successful. They're the ones who set direction for the company, not the shared service center."
The Hackett Group performs best practices research and process benchmarking. The conference featured presentations by executives from The Hackett Group and 15 other companies, including Accenture, Agilent Technologies, Autodesk, Equitant, FedEx Express, Hewlett Packard, KPMG International, Lafarge North America, Ogilvy & Mather Worldwide, ON Semiconductor, NCR, Piper Jaffray, Unisys, Williams Companies, and Hackett's corporate parent, Answerthink.