I have just come back from our North American Shared Services Leaders’ Summit in Chicago. I was thrilled to hear that the Department of Health and Human Services actually charges their internal customers for the products rendered. An example Paul Bartley provided was mobile phones.
His view was that the customer would insist on the most expensive Blackberry… until they realized they’d have to pay for it.
This made me think hard about how the shared services organizations out there that are not charging the business in a way that drives ‘good’ behaviour, are surely not being the best SSO they could be. Controversial, but, in the main, true.
Nine times out of ten, when I ask why an SSO doesn’t activity-base-charge for services, and charge based on the type of service, the normal response is ‘because the admin costs too much’.
But get this – if it takes 2 people to track and manage the charging, but the results of tracking and charging are that Spain reduces their 72% non PO volume down to 26%, ergo freeing up 4 people, that would be seen as the economically sensible route to take, right?
The fastest way to change your customers’ behaviour is to start charging based on it. Human beings can sometimes treat free services quite carelessly. The second there’s a fee, we human beings start registering that the service has a value. We also think twice about how much we need the service, and if we can possibly go without. We also think how we might change our own behaviour to reduce any charges.
And if you argue that it’s all money coming from the same pocket, that’s not the point. Of course it’s from the same pocket, but charging per activity will only lead to less money coming out of that pocket, and the overall profit margin of the business increasing.
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