Insights

Redefining functional service delivery to achieve organisational scalability and efficiency

Steps to sustainable and scalable change

A function’s service delivery model defines how work adds value and relates to the business. Is work unique to local markets orgeneric enough to be consolidated and centralised? Is it knowledge-based or transactional in nature? During times of business contraction and growth alike, companies should re-examine this balance to adapt to changing business priorities and imperatives, and to produce significant net cost savings and higher effectiveness. Ultimately, maximum value for minimum cost is the power of an effective service delivery model. When corporate executives consider making organisational changes, they usually move straight to restructuring or realigning resources. After confirming the business model and decision making blueprints, the service delivery models should also be considered before redeploying resources.

First, you need to confirm, change, or adjust your company’s business model. By business model, we mean the way a company organises or structures itself to go to market, interfaces with stakeholders, and reacts to external events. The business model serves as the blueprint for a corporate transformation or restructuring effort.

Second, as with a construction project, the foundation needs to be laid. In a business this is the operational governance that conforms to the business model. Operational governance establishes how decisions are made and defines the roles and responsibilities of corporate and the business units or divisions. In general, it’s how key decisions are made. With the blueprints in hand and foundation in place, you’re now able to build the new structure – that is, change how your organisation deploys its resources. The objective, and likely the biggest challenge, is to align the way work gets done with the business model and to drive structural cost reduction, along with sustainable and scalable change.

The service delivery model – a construct for change. Since there are varied types of work and ways to perform them, a service delivery model (SDM) serves as a way to help you tell the work types apart and evaluate their ultimate impact on company performance. An SDM starts with the notion that there are four different types of work for each functional area. How that work is organised and managed will be different for each of the four types. Eliminating, or at least significantly reducing, random allocation of resources is at the heart of what an SDM is designed to help you do. This creates clarity around the way in which work gets done and answers questions what work, where is it done, who does it, how is it done, and why is it important?

Click here to see the full cost reduction journey

The SDM organisational matrix - can assist you in defining work according to how it adds value and relates to the business.

Did you find this useful?

Related topics