Shared Services, Meet Product Management
If you want to be unpopular with an agile or DevOps team, tell them, “You need to use the shared service.” Shared services have a well-deserved reputation for bureaucracy, one-size-fits-all standards, long lead times, and high transaction costs.
Shared services per se are not the problem. Amazon is a public, shared service, and it’s well regarded. The problem is that internal shared services — despite the best efforts of leading service management thinkers — have lapsed into passive ticket-taking with a generous helping of “we’re your only option” arrogance, aggravated by a misguided financial strategy of keeping costly people fully utilized. Make sure these expensive experts are always busy!
But the internal shared service no longer has a monopoly position. Cloud providers, for example, challenge traditional in-house shared services, and the impacts on traditional I&O (infrastructure and operations) teams continue to increase. Software-as-a-service and business process outsourcing options proliferate and increasingly present meaningful competition for organizational units previously shielded from market dynamics.
However, external, commercial options have a major drawback: their profit margins. Internal shared services can be more economical. The challenge is to reframe the economic question. The shared service must be economical in terms of:
- The costs of its inputs (people, systems, etc.).
- The transactional costs to use it (including both direct costs and overhead like filling out forms).
- The cost of delay that a shared service may impose on the consuming teams’ value delivery.
Furthermore, a shared service, in this day and age of digitalization, should also be easy — even delightful — to use.
Balancing across these demands is not easy. This is where product management comes in. Service management and product management have a nuanced relationship; each has aspects of the other. But service management has focused more on day-to-day delivery and operations and less on designing and continually improving services.*
Product management brings a broad and rich perspective and set of techniques for discovering and continuously improving value propositions in close partnership with the customer. The product management professional community is large and growing, with many seasoned practitioners offering thoughtful publications and consulting, training, and coaching.
The modern service owner, as a product manager, is challenged to design and improve their service across a full range of touchpoints. Services may be:
- Completely automated (a cloud virtual machine provisioned via automation).
- Workflow/ticketing based (routine provisioning of devices).
- High touch (consultative expertise).
As shown here:
The challenge for the modern service/product manager is to monitor their service for performance across both customer-facing (e.g., Net Promoter Score℠ [NPS], Employee Net Promoter Score℠ [eNPS]) as well as internal (e.g., throughput) metrics and continue to improve it across its touchpoints, as shown above. Ticketed workflows getting bogged down with excessive lead times? Perhaps routine requests can be better automated and supported by curated design patterns. Or perhaps you need to support your customers becoming more T-shaped and better able to use your service.
I discuss all of these options and more in my most recent report, It’s Time To Rethink Shared Services. Let me know what you think!
* There are some notable exceptions: ITIL includes discussion of service design concerns. Also see “This is Service Design Thinking” by Stickdorn and Schneider. But these are isolated examples, compared with the breadth and depth of the product management discipline and its community.