In part 1 of this series, we explored the many benefits of implementing a shared services center within a mining company for successful digital transformation. By establishing a strong centralized approach to support services within an organization, mining companies can lay a foundation to tackle transformation initiatives more effectively.
However, any restructuring in an organization can face initial opposition from employees. Implementing shared services is no exception and with employees having to adapt to new ways of working and the reallocation of roles and responsibilities, varying levels of resistance is to be expected.
Nonetheless, as the shared services market size is estimated to expand at a CAGR of 17.64% between 2022 and 2027, mining companies that leverage this structure are better positioned to take on trends like business process automation in the future.
4 Common Challenges in Implementing Shared Services
When implementing shared services to streamline global mining operations, certain hurdles may need to be addressed to ensure a smooth transition to this new organizational structure.
Resistance from Individual Business Functions and Regions
With all change comes a natural level of resistance. Employees and departments that are expected to adjust to the sharing of resources and processes, and in some cases having their roles redefined, are likely to initiate some pushback. This could stem from a host of fears about potential job loss or a hesitance about new ways of working.
Different departments and business units may have developed their own unique processes, systems and cultures over time, and aligning these diverse ways of working may be challenging. A cohesive shared services model needs to be implemented tactfully, taking into account all teams, employees and departments and addressing their concerns accordingly.
Mining companies often have diverse operations, including exploration, extraction, processing, transportation, and marketing. Each of these areas may have distinct requirements, making it harder to standardize processes and centralize services effectively.
Understanding current functions, who manages what, and existing governance structures and responsibilities is the first step in an effective shared services implementation. Avoiding conflicts and uncertainty should be a primary consideration to ensure a seamless transition.
The Risk of Over-Centralization
There is a delicate balance to be maintained between centralization and maintaining ownership over certain functions within individual business units and regions. Discerning what should be centralized and what should not be is crucial to avoid disempowering individual business units and introducing an unnecessary amount of bureaucracy.
When implementing a shared services center, the goals of the organization need to be clearly defined and strategic alignment is paramount. These goals then serve as a starting point to better understand which functions will be centralized – leaving space for customization and the autonomy of individual business functions to act independently over certain areas.
With the remote locations of mining operations, which are often difficult to access, the autonomy of these departments to execute quickly needs to be considered to avoid over-centralization and inefficiency.
Disparate Systems and Technology Integration
Integrating various technology systems, software, and data sources to support shared services can be complex and costly. Compatibility issues and data migration challenges can arise. Nonetheless, centralizing infrastructure and ensuring common networks and security tools need to be executed with comprehensive planning for sustainable shared services implementation. This is a relatively straightforward step which can be completed by IT without impacting business operations significantly.
However, the real challenge is to fully integrate and centralize services and applications among business units, many involving legacy systems which need to be updated. Migrating business processes to a common platform will inevitably require training and effective change management to secure employee buy-in from all departments and organizational levels. This could include mine planning and optimization software, geospatial tools or equipment automation.
Additionally, many mining operations are situated in remote or geographically isolated areas, which can make it difficult to establish centralized shared service centers. Setting up data infrastructure in such locations can often be costly and logistically challenging.
Performance Management
Establishing key performance indicators (KPIs) and metrics to measure the success of shared services requires comprehensive planning, particularly when existing business functions are accustomed to their own ways of measuring success. Ensuring that these metrics accurately reflect the value and efficiency of shared services is critical and must take into account existing performance management processes within each business unit.
By setting up a dedicated task force to establish quality control measures and performance metrics, the success of a shared services center can be assessed according to a shared set of standards and expectations to avoid disputes later on. Progress can then be continuously monitored, and adjustments can be made as needed to ensure that these performance metrics and KPIs are consistently aligned to evolving business goals. With the mining industry being subject to market fluctuations, leading to variable demand for services, shared services must be flexible enough to adapt to these market dynamics.
The Solution? A Behavior-Centered Approach to Change Management
By focusing on a behavior-centered approach to change management, strategic alignment to business goals, and clearly defined KPIs, SLAs and roles, companies can craft an effective shared services implementation roadmap. Addressing employees’ initial resistance to new ways of working to gain employee buy-in at all organizational levels can result in sustainable, long-lasting rewards for these companies.
In the third part of this series, we discuss the ways that mining companies can strategically implement shared services using Unison Mining's behavior-led change management methodology.
