by Chris Conrad

Challenge

Despite staff reductions and line of business (LOB) divestitures during more than a decade of industry and economic downturn, this large Pacific Northwest manufacturer still faced market and shareholder pressures. Its unique cost saving strategy? Decentralizing its shared services organization (Core IT), maintaining a small set of centralized services while transferring the rest to new IT organizations within its LOBs.

Evolving shared services

The company acknowledged that it was embarking on a complex transition and would need help. Decentralizing its IT services organization meant that the LOBs would need to develop new competencies in order to set the technology direction in areas previously managed by Core IT. For its part, Core IT would need to cede a certain amount of control to the LOBs, sustain additional layoffs, reduce spend on outsourced managed services, and reconsider its value proposition to the LOBs. To effectively manage often conflicting agendas, the company would need to establish a governance framework that allowed Core IT and the LOBs to work together for common goals.

Understanding these challenges, the company engaged Point B to help create and implement its transition plan. Using the Lean A-3 plan format, we began by developing a portfolio of projects designed to achieve cost savings as well as enable the new LOB IT organizations.

Over the next seven months, Point B worked with the client to implement the transition plan:

We coordinated the portfolio of transition projects, ensuring unity of effort and leadership visibility and input.

We facilitated the knowledge transfer activities, including interviewing IT management to determine the scope of transitioning responsibilities and the level of knowledge needed to perform them successfully, creating a knowledge management repository, and engaging SMEs to develop and deploy a training curriculum

We organized discussions and researched competing solutions in order to provide objective assessments of business value and fit, setting the stage for decisive governance decisions that reduced tension and allowed all parties to progress.

Immediate success. New era.

Within seven months, the company completed two-dozen transition projects, stood up all the LOB IT organizations, and achieved savings far in excess of established targets. With its proven ability to manage a substantial amount of change, it is ready to meet future challenges head on.