A Shared Service Centre (SSC) is a central hub of an organisation, typically responsible for handling specific operational and administrative tasks.
Shared Service Centres have been around since the mid 1980’s and, more frequently than ever, larger corporates are moving towards SSC’s and business process outsourcing.
Companies use a Shared Services model so they can utilise their people and the processes and technologies within the business. Organisations will open up SSC’s to concentrate their administrative duties into a centralised function, in order to reduce costs, avoid duplication of effort and to allow for greater focus on business strategy.
So, what are the main functions within Shared Service Centres?
The main functions we see across Shared Service Centres, listed in order of popularity are:
- Human resources
- Information technology
- Customer service/Contact Centres
- Sales and marketing
The key objectives for most SSC’s are reducing business costs, improved efficiency and control, performance/productivity measurement and customer satisfaction.
Finance and accounting, HR, and I.T are the main driving functions behind shared service centres. They bring about improvement in data analytics, process improvement and robotics and automation.
Finance and accounting
Finance and accounting is usually the most popular function within a shared service. It’s estimated that more than 50% of global companies have consolidated their accounting and finance functions into a shared service centre or are planning to do so.
Organisations use shared services as a way of streamlining their HR activities, typically concentrating transactional activities into a centralised and commonly shared function. The shared service model can help businesses reduce costs and increase process efficiency, allowing a greater focus on HR strategy.
IT was not the first function to take up shared services, however, it was quickly adapted to IT in the late 1990s. The objective is the same as with other functions; reaching scale economies through centralised IT activities.
You must bear in mind, as with everything, there are challenges to face within all shared service functions. The main challenges are:
- Deskilling roles that then become tedious to complete.
- Future development opportunities for administrative roles.
- Loss of face to face interaction.
- Decreasing process visibility from business units or sites.
- Analytics not being used to measure success, to allow continuous improvement.
- Heavy investment in information systems.
If you consider all these challenges in the early stages and plan accordingly, you give yourself the best chance to make your shared service function a success.
For more information on why HR Shared Service Centres fail, see Kate’s blog here.
If you would like to discuss further, email me at firstname.lastname@example.org.
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