As businesses expand across countries and regions, managing daily operations becomes more complex. Finance, human resources, procurement and reporting procedures may vary across offices, making consistency and cost control more difficult. Process standardization establishes common methods and performance standards across an organization, while global shared services centralize selected business functions to serve multiple departments, business units or locations.
What Are Global Shared Services?
Global shared services is defined as an operating model that is a grouping of an organization’s shared business functions into shared service centers that serve multiple departments, units or locations throughout the globe. These centers typically handle things like accounting, payroll, procurement, employee administration and IT support.
The aim is to minimize duplication, enhance services and maximise the use of resources. But, simply centralizing operations is not enough if inconsistent processes are followed by different teams to solve inefficiencies. Standardization gives a shared basis for effective management of these activities.
The Importance of Process Standardization
Promotes Consistency Across Locations
Differences in office procedures for similar activities can lead to confusion and delays and to discrepancies in reporting. Standardized processes establish common guidelines for completing activities, documenting information and obtaining approvals.
For instance, a business with multi-national operations can have a standard invoice processing procedure, but accommodate the various tax regulations and other requirements of different countries. This will help to enhance coordination, but not leave out regional variation.
Improves Operational Efficiency
Often, various workflows can cause duplicate work, delays in approvals and corrections. Standardisation can highlight such inefficiencies and clear responsibilities at every stage of a process.
In global shared services, shared processes also help to train staff, shift workloads from one team to another and manage tasks between sites. These enhancements over time can be used to minimise processing time and administrative workload.
Improves Reporting and Data Accuracy
If departments report data in various formats or have various definitions or reporting methods, it is hard to consolidate. Management can better compare performance of one business unit with another, due to standardized data structures and reporting processes.
Having everything well documented also facilitates internal review and error checking or the occurrence of any unusual transactions. Reliable information allows decision makers to compare and measure the performance of operations.
Supports Automation and Digital Transformation
The best processes to automate are clearly defined and repeatable. When each department has its own workflow, technology can be more complex and costly to implement.
Standardization establishes common processes that can be automated using workflow management systems, robotic process automation (RPA) and other digital tools. This also simplifies the ability to roll out successful solutions on a scale of multiple sites.
Improves Governance and Accountability
Standardized processes communicate who does what, what and how permissions need to be obtained and how exceptions are managed. These controls support organisations to keep an eye on their activity throughout geographically spread teams.
But there must be standardization that takes into consideration variations of local legislation and taxation, employment requirements and business practices. The principles need to be set out in a common framework with a few adaptations in order to enable the necessary adaptations.
Implementing Standardization in Business
The first step is to map existing processes and identify differences across locations. Next, organisations should define common procedures, document responsibilities and establish measurable performance indicators.
It’s crucial that staff are properly trained to ensure that teams are aware of the new procedures. Organisations should also regularly review performance and update procedures as business needs, technology and/or regulations change.
Conclusion
Process standardization is a key component of an effective global shared services model. It promotes consistency, reduces duplication, improves reporting and prepares processes for automation. By establishing common procedures while allowing for necessary local flexibility, organisations can improve operational efficiency and support sustainable international growth.
FAQs
Q: What is process standardization?
Process standardization defines common methods, responsibilities and performance expectations for completing business activities.
Q: Why is process standardization important for automation?
Clearly defined and repeatable processes are easier to automate using workflow systems, RPA and other digital technologies.
Q: How does standardization improve efficiency?
Common workflows can reduce duplicate work, approval delays, corrections, processing time and administrative effort.
