1999

Service departments – necessary evil or business asset? - 26 April 1999

Service departments such as HR, IT and property, often perceived as wasteful, inefficient and a cost burden, could make significant improvements to the way they work, according to new research from PA Consulting. The research looked at the characteristics of the most successful service departments within large organisations. It found that the highest performing departments share a common approach to their work by involving their internal customers at every stage of a project, differentiating between routine work and projects, and concentrating only on work that will add value to the business.

Nick Chaffey, of PA’s project management practice and author of the research, commented: "One of the most interesting findings was that successful service departments, regardless of their function and the type of organisation, approach their work in similar ways. In defining the elements of this common approach - we noticed a striking similarity to the way commercial consulting organisations work, which are also driven by the need to deliver projects on target in terms of cost, time and quality."

"In addition service departments need to improve how they are perceived within their organisations. Many suffer from a lack of common understanding between them and their customers - borne out by the survey results which reveal that service departments view themselves as 22% more successful than their own customers do."

Focusing on internal customer needs
The best service departments involve their internal customers from the outset of a project until after the project is completed. All departments delivering over 90% of their project objectives within budget, plan their cost targets with their customers – the message is clear: advance planning with the internal customer consistently delivers results. Around 80% of high performers carry out reviews after all projects and involve their internal customers in these reviews.

Delivering a high quality service
The survey found that service departments setting objectives to ensure they prioritise their work and focus only on projects that add value to the business are 16% more successful that those that do not. 87% of successful service departments also plan their work against their department capacity. Developing relationships with board level directors and other customers improves results and brings service departments in line with corporate direction.

Empower and motivate project managers
Managing workload requires that service departments are able to differentiate between routine work and strategic projects, often using outsourcing, automation or dedicated teams for high-volume routine work. The survey shows that this is best achieved by staff who follow a project management career path. 86% of service departments recognise that project managers must be accountable for the projects they manage and departments with accountable project managers achieve results which are on average 25% more successful than bureaucratic departments with poorly delegated accountability.

The way forward for HR departments
Most internal customers of HR departments feel there is considerable room for improvement in the results they deliver. The profile of top performing HR departments matches closely that of top IT performers – illustrating that the benefits of a consultancy approach are just as relevant for HR as for IT. However, in their current make-up, systems are inadequately prioritised. Whilst the technical focus of IT departments has necessitated the implementation of effective systems, there has been an under investment in most HR departments. Yet best practice from the top performing HR departments gives a unanimous message – 3/3 top performers all successfully use a network of relevant management information systems to operate and control their work.

Copies of the report, Delivering business results - a new approach for service departments, are available from PA Consulting on
+44 207 333 5260.

*Successful performance of service departments was measured by delivery of projects to cost, time and quality.

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For more information, please contact:

PA Information Enquiry PA Consulting Group 123 Buckingham Palace Road London SW1W 9SR United Kingdom Tel: +44 20 730 9000 E-mail: info@paconsulting.com

Notes to editors

Survey methodology
100 organisations from the UK, Australia and New Zealand took part in the survey. A range of business sectors was represented including financial services, media, utilities and health services. Data was gathered from two groups: HR, IT and property service departments themselves; and major internal customers of these services, usually a chief executive or finance director.

PA Consulting Group is a leading management, systems and technology consultancy, with a unique commitment to the integration of these capabilities. Established almost 60 years ago, and operating worldwide from around 50 offices in some 20 countries, PA draws on the knowledge and experience of about 2,700 employees, whose skills span the initial generation of ideas and insights all the way through to detailed implementation, including:

• Strategic management, and managing for shareholder value
• Accelerating business growth, especially through innovation
• Improving business design, including customer relationship management, enterprise-wide systems for the supply chain, and full e-business solutions
• Mobilising human resources
• Delivering projects and programmes.

PA focuses on creating benefits for clients rather than merely proposing them, and this focus is supported by an outstanding implementation track record in every major industry and for governments around the world. PA also develops leading-edge technology both for its clients and within its own portfolio of venture companies in areas ranging from software to wireless technology to life sciences.

PA distinguishes itself from its competitors through the range and quality of its people, its development and use of technology, and also its independence. PA's work in every area from strategic management to project delivery is enhanced by its expertise in all the other areas. PA's consultants, whatever their special skills, all share:

• A highly commercial approach to clients' problems and opportunities
• A technologically sophisticated view of both the industry sectors we serve and the solutions we deliver
• A culture of respect, collaboration and flexibility in working with our clients to achieve their aims

Adding value to clients, from insight to implementation, is ingrained at PA through our culture and tradition, and also through our compensation and ownership philosophy. PA is owned by its employees, with everyone at PA entitled to a stake in the company, and our reward systems are also directly related to the results created for clients. This builds a virtuous circle, as we know that the only way we can create value for ourselves is by creating value for our clients first. The value we create for clients and within PA helps us to attract the best people in the world to PA, and to invest in more leading-edge technologies, thereby allowing us to increase further the value we bring to our clients. We are proud that our clients say "PA makes it happen".

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