Shared Service Centres have been around since the mid 80’s, and more and more frequently, large corporates are moving towards outsourcing and the shared service model.
Typically, a shared service organisation is a central hub, and is responsible for handling specific operational tasks. Finance tends the be the most popular function within a shared service, with HR following just behind.
Companies usually implement the shared service model for a number of reasons:
When back office functions are consolidated and the work is migrated into one department, this will inevitably reduce cost of transaction processing. In addition to labour savings, shared services contribute to reductions in infrastructure costs such as technology, facilities and services, and administrative overhead costs.
Making processes more efficient:
Replacing dispersed IT infrastructure with the latest technology can eliminate processing time. When standardisation and continuous improvement of processes and systems is being carried out, this leads to a reduction in processing time, less errors and an improved quality of service. This way, your teams time can be freed up so they can focus their time and efforts on more strategic and more ‘human’ tasks.
Improving the customer journey:
Not all organisations create a shared service model to reduce costs. Sometimes the strategy behind a centralised model is to improve the customer journey or service levels of an organisation. The most successful shared service centres, in my opinion, are the ones that focus on adding value as a centre of expertise. When metrics are implemented to a SSC (KPI’s/SLA’s) they help drive performance and service levels.
Upskilling existing staff:
With the rise of technology and automation within shared service functions, staff are being utilised in many other ways. Not only does it make staff more productive, it also improves their skillset and gives them a more rounded knowledge of a business, enabling them to really add value.
When you have motivated teams that have a clear message on what they are trying to deliver, then efficiency, cost reduction and economies of scale are usually improved naturally. It’s about the leadership team creating a clear message and vision on what you’re trying to achieve.
For more info on the role leadership plays within shared services then please see my blog here.
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