In the fast-paced and competitive business landscape of today, efficiency is the key to success, our Guide to Shared Services can help support on your journey. Every organisation strives to maximise its resources, cut costs, and streamline its operations. This is where shared services come into play. Whether you are a small start-up or a multinational corporation, unlocking the power of efficiency through shared services can revolutionise your business.
Guide to Shared Services
This ultimate guide to shared services will take you through every aspect of shared services, from understanding the concept to its implementation and benefits. We will explore how shared services can enhance productivity, boost cost savings, and improve customer satisfaction. Moreover, we’ll dive into real-life examples and success stories to illustrate the transformative impact of shared services across industries. Whether you are considering implementing shared services in your organization or simply want to gain a deeper understanding of this powerful strategy, this guide is your go-to resource. Get ready to unlock the power of efficiency and propel your business towards greater success with shared services.
In modern corporate operations, strategic innovation is key to unlocking efficiencies and staying ahead of the competition. One such approach that has emerged as a game-changer is the concept of Shared Services.
Welcome to our comprehensive guide, to help you with the in-depth understanding required to navigate the intricacies of Shared Services successfully.
Throughout this article, we will delve into the fundamental principles of Shared Services, unravel its multifaceted benefits, address the challenges encountered during its implementation, and discern the nuanced differences that set it apart from other operational models.
When did shared services begin?
Shared services has been around for many years. The earliest recorded example was when General Motors established a shared services centre to centralise its support functions in the 1980’s. Therefore, our Guide to Shared Services is nothing new but hopefully can provide some updated guidance.
However, the widespread adoption of shared services as a business model gained momentum in the 1990s as organisations sought ways to streamline their operations and reduce costs.
Shared services has become a popular approach to enhance efficiency, minimise duplication, and drive down costs.
5 challenges when setting up a Shared Service Centre
What does a SSC do?
A shared service centre (SSC) is a centralised unit within an organisation that provides common services to multiple departments or business units within the organisation. The primary purpose of a shared service centre is to streamline and standardise support functions such as finance, accounting, human resources, information technology, procurement, and other administrative services.
The SSC typically centralises these support functions, leveraging economies of scale to reduce costs and increase efficiency. By sharing resources and expertise across multiple departments or business units, the SSC can provide high-quality services at a lower cost than if each department were to manage these functions independently.
The specific services offered by a shared service centre may vary depending on the needs of the organisation, but typical functions may include processing invoices, managing payroll and benefits, providing IT support, managing procurement activities, and handling accounting and financial reporting. Overall, the goal of a shared service centre is to improve efficiency, reduce costs, and provide high-quality support services to the organisation.
What is in shared service centres (SSC)?
Shared services typically include a wide range of support functions that are common to most businesses. The specific services offered may vary depending on the needs of the organisation, but common functions that are often included in shared services are:
- Finance and accounting: This may include functions such as accounts payable, accounts receivable, general accounting, financial reporting, and budgeting.
- Human resources: This may include functions such as recruitment, employee onboarding, payroll processing, benefits administration, and employee training and development.
- Information technology: This may include functions such as help desk support, software development, network administration, and database management.
- Procurement: This may include functions such as supplier management, purchasing, contract management, and vendor negotiation.
- Administrative support: This may include functions such as document management, mail and courier services, and facilities management.
What is the difference between shared services and outsourcing?
The difference between shared services and outsourcing lies in how each approach delivers services to an organisation.
Shared services is a model where an organisation consolidates and centralises its support functions into a shared service centre, which is a unit within the organisation that provides common services to multiple departments or business units within the same organisation. The main goal of shared services is to streamline and standardise support functions, reduce duplication of effort, and improve efficiency while maintaining control of the services in-house.
On the other hand, outsourcing involves contracting out a specific business function or process to a third-party service provider. The service provider assumes responsibility for performing the outsourced functions, nd the organisation is no longer responsible for managing those functions. The main goal of outsourcing is to reduce costs and improve efficiency by leveraging the expertise and resources of the service provider.
The key difference between shared services and outsourcing is that shared services is an in-house model where the organisation retains control of the support functions, while outsourcing involves contracting out the functions to an external service provider who assumes responsibility for delivering the services.
What is an offshore service centre?
An offshore shared service is a type of shared service centre (SSC) that is located in a different country from the organisation it serves. Offshore shared services typically involve outsourcing support functions to a service provider in another country with the aim of reducing costs and leveraging the benefits of the service provider’s expertise and resources.
Offshore shared services are often established in countries with lower labour costs or where the service provider has specialised expertise. These service centres may provide a range of support functions, including finance, accounting, human resources, information technology, procurement, and administrative services, among others.
Offshore shared services offer several advantages, including access to a large pool of skilled workers at lower costs, 24/7 service availability, and the ability to scale services up or down based on changing business needs. However, offshore shared services also come with challenges, such as cultural and language barriers, time zone differences, and the need to comply with different regulatory frameworks.
Overall, offshore shared services can be an effective way for organisations to reduce costs and improve efficiency, but it requires careful consideration of the potential benefits and challenges.
What are the benefits of shared services?
- Cost savings: Shared services allow organisations to consolidate support functions and streamline operations, resulting in significant cost savings. By eliminating duplication of effort, reducing headcount, and leveraging technology, shared services can help organisations achieve cost savings of up to 30%.
- Increased efficiency: Shared services enable standardisation of processes and policies, which leads to improved efficiency and productivity. By eliminating silos and centralising support functions, organisations can achieve greater consistency and faster processing times.
- Improved quality: Shared services can lead to higher quality services by leveraging the expertise and resources of a dedicated team. By centralising support functions, organisations can ensure that services are provided by skilled professionals with the appropriate training and experience.
- Greater agility: Shared services can provide greater agility by allowing organisations to quickly scale services up or down based on changing business needs. By leveraging technology and shared resources, organisations can respond more quickly to changing market conditions or customer demands.
- Improved risk management: Shared services can help organisations improve risk management by ensuring compliance with regulatory frameworks and reducing the risk of errors or fraud. By centralising support functions, organisations can ensure that policies and procedures are consistently applied and that risks are identified and managed effectively.
Overall, shared services can offer significant benefits to organisations, including cost savings, increased efficiency, improved quality, greater agility, and improved risk management.
What is a shared service delivery model?
A shared service delivery model is a way of organising and providing services within an organisation or between different organisations. In this approach, instead of each department or unit managing its own services separately, they come together to centralise and share certain services to achieve greater efficiency and cost-effectiveness.
Imagine it as a group effort where everyone contributes and benefits. It’s like having a common pool of resources and expertise that all the involved parties can tap into. For example, various departments in a company, like human resources, IT, finance, and procurement, might pool their resources and expertise to create a central team that handles these services for the entire organisation. This way, they can avoid duplication of efforts and reduce expenses, making things more streamlined.
The shared service delivery model allows organisations to standardise processes, improve service quality, and take advantage of specialised skills from a dedicated team. Instead of each department hiring its own experts for every service, they can all rely on the central shared service team, which often leads to cost savings and increased efficiency.
It’s important to note that implementing a shared service delivery model requires good communication and coordination among the involved parties. By working together, they can make sure the services meet everyone’s needs and achieve the desired goals. This way, organisations can concentrate on their core functions while still benefitting from shared expertise and resources.
What are finance shared services?
Finance shared services refer to the centralisation and standardisation of finance-related functions across different business units within an organisation. In this model, a dedicated finance shared services centre (FSSC) is established to provide services such as accounting, financial reporting, payroll, accounts payable, accounts receivable, and other finance-related functions to all business units.
The FSSC operates as a centralised unit responsible for managing and delivering finance services to the entire organisation. It leverages economies of scale, standardisation, and automation to achieve cost savings and improve efficiency. The FSSC typically employs skilled professionals who provide finance services to the entire organisation using common processes, policies, and systems.
Finance shared services offer several benefits to organisations, including:
- Cost savings: By consolidating finance-related functions and centralising them in a dedicated FSSC, organisations can achieve significant cost savings through economies of scale, standardisation, and automation.
- Improved efficiency: Finance shared services enable standardisation of processes, policies, and systems, leading to improved efficiency, accuracy, and timeliness of financial reporting.
- Enhanced control and governance: Finance shared services can improve control and governance by providing greater visibility and transparency into financial transactions, ensuring compliance with regulations, and reducing the risk of errors and fraud.
- Better decision-making: Finance shared services can provide better decision-making support by providing timely, accurate, and reliable financial information to the organisation’s leadership.
Overall, finance shared services can help organisations to achieve greater efficiency, cost savings, and improved financial control, while enabling better decision-making and supporting the organisation’s strategic goals.
What is HR shared services?
HR shared services refer to the centralisation and standardisation of human resources (HR) functions across different business units within an organisation. In this model, a dedicated HR shared services centre (HRSSC) is established to provide services such as recruitment, employee onboarding, payroll, benefits administration, training and development, employee relations, and other HR-related functions to all business units.
The HRSSC operates as a centralised unit responsible for managing and delivering HR services to the entire organisation. It leverages economies of scale, standardisation, and automation to achieve cost savings and improve efficiency. The HRSSC typically employs skilled professionals who provide HR services to the entire organisation using common processes, policies, and systems.
HR shared services offer several benefits to organisations, including:
- Cost savings: By consolidating HR-related functions and centralising them in a dedicated HRSSC, organisations can achieve significant cost savings through economies of scale, standardisation, and automation.
- Improved efficiency: HR shared services enable standardisation of processes, policies, and systems, leading to improved efficiency, accuracy, and timeliness of HR-related activities.
- Enhanced employee experience: HR shared services can improve the employee experience by providing consistent, high-quality services to all employees, regardless of their location or business unit.
- Better decision-making: HR shared services can provide better decision-making support by providing timely, accurate, and reliable HR information to the organisation’s leadership.
Overall, HR shared services can help organisations to achieve greater efficiency, cost savings, and improved employee experience, while enabling better decision-making and supporting the organisation’s strategic goals.
What is Global Business Services?
Global Business Services (GBS) is a business model that involves the centralisation and standardisation of various business functions within an organisation into a single, integrated unit. The goal of GBS is to streamline business operations, reduce costs, and improve efficiency by consolidating functions such as finance, IT, human resources, procurement, and other support functions into one organisation-wide unit.
GBS typically involves the creation of a centralised shared services centre (SSC) that provides services to multiple business units or locations across the organisation. The SSC can be located in one country or multiple countries and can utilise a range of delivery models such as onshore, offshore, or nearshore delivery.
The GBS model is typically characterised by a focus on standardisation and automation, with the use of shared services technology platforms and tools to drive efficiency, reduce duplication, and achieve cost savings. The model also often includes a strong focus on customer service, with an emphasis on providing high-quality services to internal business units or external customers.
The benefits of GBS include increased efficiency, improved customer service, reduced costs, and greater visibility and control over business operations. By consolidating and standardising business functions across the organisation, GBS enables organisations to streamline their operations, reduce duplication, and achieve greater consistency and control over their processes. Additionally, by leveraging economies of scale and standardisation, GBS can drive down costs and improve overall business performance.
What qualifications are specific to Shared Services or Global Business Services?
The Hackett Group offer a diploma and an Advanced Diploma in Global Business Services, which enhance skills, knowledge and capabilities. You can find more information about this here
However, there are several qualifications that can be relevant for professionals working in these fields.
Finance-related Shared Services roles, relevant qualifications could include:
- Chartered Institute of Management Accountants (CIMA)
- Association of Chartered Certified Accountants (ACCA)
- Certified Public Accountant (CPA)
- Certified Management Accountant (CMA)
- Financial Risk Manager (FRM)
HR-related Shared Services roles, relevant qualifications could include:
- Chartered Institute of Personnel and Development (CIPD)
- Society for Human Resource Management (SHRM)
IT-related Shared Services roles, relevant qualifications could include:
- Certified Information Systems Security Professional (CISSP)
- Information Technology Infrastructure Library (ITIL)
- Project Management Professional (PMP)
Global Business Services roles, qualifications that provide a broad understanding of business operations and management could be relevant. These could include:
- Master of Business Administration (MBA)
- Bachelor’s degree in Business Administration
- Lean Six Sigma Certification
Additionally, soft skills such as communication, teamwork, problem-solving, and adaptability are also critical for success in Shared Services and GBS roles. Therefore, developing these skills through experience, training, and education is also important.
What is Robotic Process Automation (RPA)?
RPA stands for Robotic Process Automation. It is a technology that uses software robots or “bots” to automate repetitive, rule-based tasks in a business process.
- Bots can be trained to mimic human actions such as logging into applications, copying and pasting data between systems, extracting and processing data from documents.
- Is designed to increase efficiency and reduce human error in business processes. By automating routine tasks, RPA frees up human workers to focus on more complex and value-added activities. It can also reduce the time and cost associated with manual data entry and other repetitive tasks.
- It can be used in a wide range of industries and functions, including finance, accounting, human resources, procurement, customer service, and more. RPA software can be integrated with existing business systems and applications, allowing businesse to automate tasks without significant changes to their existing technology infrastructure.
RPA is a powerful tool to increase efficiency, reduce costs, and improve the quality of business processes.
Hopefully our Guide to Shared Services has been useful for more information you can contact our Shared Services specialist James Cumming.
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At re:find Executive Search we believe that recruitment is not a one-off transaction but rather a long-term partnership. By building long-term relationships with our clients, we help them to find and retain the best talent for their organisation.
- Every organisation is unique and we feel that there is no one-size-fits-all solution when it comes to recruitment.
- re:find offer bespoke recruitment solutions, that are tailored to meet the specific needs of each client.
- Whether you need help with a single hire or a full recruitment campaign, we can help.
- We commit to providing our clients with the highest quality service.
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For more information please get in contact with our Managing Director, James Cumming.
