Shared services: should we go hybrid?

Shared services: should we go hybrid?

I get lots of questions about the difference between BPO and SSC, so I’ve put together a simplified answer to help you out. Could the hybrid model be the way to go?

When large organisations grow, relocate, merge, acquire, or even consolidate different entities, typically there are two options on how they manage their operational processes.

The most popular option is a Shared Service Centre (SSC), however more and more organisations are now exploring the Business Process Outsourcing (BPO) model.

The difference between Shared Service Centre’s and Business Process Outsourcing is that an SSC is an internal function of an organisation, and a BPO is typically an outsourced provider based offshore, and an external solution.

Business process outsourcing

BPOs tend to offer greater productivity due to technology, process and advanced systems and AI. With labour costs in these locations offering a more cost-effective solution in the long run, however the initial set up of an outsourced model can be costly initially, but over time will see a ROI.

This can be setup quickly and effectively, however, as long as your process isn’t completely unique, as BPOs tend to offer a more ‘one size fits all’ model.

The most popular locations for a BPO is India, Philippines and Central-Eastern Europe and SSCs most popular locations such as Europe and USA. With lower labour costs, and huge talent pools, it is an effective and more cost-effective solution when done right. With a BPO, you wouldn’t need to hire, train and retain your staff, but simply move into this model, and become operational in a short period of time.

BPO offers organisations scalability and opportunity for growth, as most tend to offer a 10-20% cost reduction to an SSC model.

Whilst, outsourcing can be implemented more quickly, not all vendors can offer the same quality service as an SSC. For example, if the vendor is based in Eastern Europe or Asia, Language barriers could also affect the quality of the deliverables.

Shared service centres

The SSC model offers a more bespoke solution and tend to give a company the ability to run systems like an internal service provider, allowing it flexibility. Companies make efficiencies through process standardisation, technology improvements and centralisation of services.

The SSC model offers more control over decisions, enabling a better service to the customers, suppliers and internal users.

A Shared Service Centre can closely monitor the performance and quality of the work done, which gives more control over the service being offered, however, having to install and maintain a new infrastructure can be costly, let alone having to train the employees.

The hybrid model

The big one – the hybrid model – is when organisations may opt in for both solutions and use a combination of both. Combing different models to ensure you are working towards the organisation’s goals, with lower risk activities such as Cash Allocation, Accounts Payable Processing and Reconciliations tend to be offshored. There is less room for error with these tasks and involve more processing than communication.

Typically, their more administrative functions and processing work would be outsourced, and the more strategic responsibilities are kept in house. This has many benefits – you’re getting the best of both worlds and in house and outsourced teams are a partnership and therefore work together for better results.

It’s a new buzz in the industry, but could the hybrid model be the future?

If you would like to discuss further, email me at sam@refind.co.uk.

You can view more about Sam Perry our Shared Services Executive Search expert here.

Why won’t top performing shared service professions join your business? And what to do about it. Download our free eBook here.  

What makes a good shared service leader?

A good shared service leader

Shared services is a continuously evolving function, and with emerging technologies and ever-changing job titles, it’s important that you set yourself apart from the crowd if you want to become a well-known leader within the industry.

Traditionally, shared service leaders were always judged on their hard skills. Shared services are set up to reduce costs, make processes more efficient and deliver results. However, not all shared service functions have an internal focus, and some are more focussed on delivering a better quality of service their customers, stakeholders and wider business.

So, what skills do you need to be a successful  shared services leader?

Leaderships Skills

Well this one is pretty obvious, really. Leadership skills is one of the most important things you need to have. You need to be the ‘anchor’ for the team and show resilience when going through periods of change. 

Ability to influence

In order to be a successful shared service leader, you will need to have the ability to influence. You will need to influence customers, stakeholders, suppliers as well as your wider team and perhaps the board. You will need to get their buy-in whilst delivering transformation through periods of change.

Commercial mindset

The best leaders within shared service functions will have a commercial mindset and will be more operational than transactional. It’s all about looking at the wider business and understanding how decisions can impact other operations and sometimes the end user.

Tech Savvy

With the rise of robotics, AI and cloud-based systems, it’s important that you can keep up to speed with the latest technologies. With mundane processing tasks being eliminated, this is a great chance to take away some of the tasks the team may call ‘painful’, allowing you to upskill them and utilise them more, which leads nicely to my next point…

Talent attraction and retention

You’re only as good as your team. Building a team with exceptional talent can be difficult. Retaining the team is even harder. In such a candidate driven market it’s important keep your team motivated and challenged as they will no doubt explore opportunities externally. Rotational training, incentive, and continuous development is what most staff want – ensure you get the best team and keep them – enabling you to do the best job possible!

Purpose-driven

Whilst there are some nice shiny job titles and sexy remuneration packages the best share service leaders, in my opinion, are the ones that are passionate about delivering change effectively. It’s all about wanting to add value and pushing to deliver results for the business.

What can I do to develop my skills?

  • Complete online courses/webinars to develop specific skills.
  • Speak at conferences and events.
  • Become a mentor.
  • Attend networking events.
  • Get involved in all aspects of the company and suggest improvements.

What skills do you feel make a good shared services leader? If you would like to discuss further, you can email me at sam@refind.co.uk.

You can view more about Sam Perry our Shared Services Executive Search expert here.

Why won’t top performing shared service professions join your business? And what to do about it. Download our free eBook here.  

How you’ll benefit from a shared service function

Benefit from a shared service function

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:

Cost reduction:

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.

If you would like to discuss further, email me at sam@refind.co.uk.

You can view more about Sam Perry our Shared Services Executive Search expert here.

Why won’t top performing shared service professions join your business? And what to do about it. Download our free eBook here.  

Functions within Shared Service Centres

Functions within a Shared Service Centre

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:

  • Finance
  • Human resources
  • Information technology
  • Procurement
  • Customer service/Contact Centres
  • Estates/Facilities
  • Sales and marketing
  • Legal

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.

Human Resources

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.

Information Technology

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.

The challenges:

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 sam@refind.co.uk.

You can view more about Sam Perry our Shared Services Executive Search expert here.

You can sign up for more shared services news and updates from Sam here.  

Why HR Shared Service Centres fail

HR Shared Services

HR Shared Services are set up to streamline HR activities, which reduces costs, increases the efficiency of business processes and frees up time to concentrate on strategy.

HR Shared Services functions can add a lot of value if you do it right. If you get it wrong, it can have a negative effect on employee experience and relationships throughout the business with HR can be damaged.

Technology plays a big part in making HR Shared Services effective, but the exact structure and scope of HRSS really depends on the company and various other factors.

Why does HR Shared Services go wrong?

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 efficiency of processes and allow a greater focus on HR strategy.

When done well, HR Shared Service Centres (HRSSC) add untold value to an organisation. However, get it wrong and it can ruin employee experience and destroy the relationship between HR and the wider business. But why does it fail?

You haven’t engaged the business in the change

When you implement a HRSSC, two groups of people need properly consulting. The people working in the shared service centre and those who will be using it. Both of these groups are equally important. You need to take your customers on the journey with you and engage and influence, in order for them to understand how you’re changing the way they currently do things. If either of these groups of people aren’t engaged, the SSC simply won’t work.

You have rushed it

Delivering a HRSSC into a business takes time. It isn’t something you can decide to do and then implement within 2 weeks. You cannot do it half-arsed. There are a lot of things to consider – from mapping out processes and ensuring you have the right technology, right down to hiring and onboarding the right talent. All of these things take time. If you rush any areas and don’t give them the time and attention they need, the chances are they will fail.

You don’t use analytics to measure success and continuously improve

Establishing the right metrics to analyse in a HRSSC is the key to success. By monitoring data, you can see how your teams are performing and highlight inefficiencies and potential problem areas, that may need investigation.

Measuring results and data enables informed decisions to be made that drive your HRSSC to continually develop and run better. This gives your HR teams the resources they need to be successful, provides employees with a better experience and ultimately gets the business results you want.

Poor leadership

Having the right leader is important for any team, particularly in a shared service environment. If you have the wrong leaders in a share service centre, the wheels can fall off the entire operation, leaving you with an unhappy, disengaged team who lose their passion for delivering excellence. When this happens, the knock-on effect across the business can be immense.

A good shared service leader should be able to look beyond the SSC and understand the impact it has on employees, as well as customer and clients.

You don’t have the right technology

Technology is a fundamental component of any HRSSC. If you don’t have the right technology, then the SSC just won’t work. So, you need to check that your current HR systems are fit for purpose. Take time looking at your current systems and processes and what you need them to do. HR tech is a big investment, so make sure you choose the right one. Meet multiple vendors, get demonstrations – and challenge them, to make sure the system does everything you need it to. Modern HR technology allows HR to manage incoming requests, review case histories and related employee files, provide consistent responses and escalate a case when necessary.

You are probably reading this and wondering why I am writing all of this, because it all seems like common sense, right?

You would be amazed at how often people miss out one of the key elements to ensure their HR Shared Service Centre in a success.

So, do you agree? Have you had a Shared Service function which is been fantastic or failed spectacularly? Share your experiences!

For all things interim management, change & transformation, get in touch with us via the info form below, and if you would like to feature in our ‘Insiders Story’ blog, email me on kate@refind.co.uk.

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