10 Things You Need to Know About Shared Services
- Shared Services is the outsourcing of essential business functions to a centralized support organization.
- Most successful Shared Services run its organization as a business, providing efficient and effective services at competitive prices to its internal customers.
- Shared Services relies on an integrated set of electronic business processes, applications, information and technologies usually anchored in a major piece of purchased enterprise resource planning software.
- Shared Services implementation requires significant executive management sponsorship.
- The most common essential business support functions outsourced to Shared Services are Human Resources, IT, Finance, Procurement, Office Services and Legal.
- Shared Services focuses on value improvement more than cost reduction and on deliverables more than activities. Shared Services values customer service and alignment.
- Shared Services uses Service Level Agreements (SLA) to establish an accord with internal customers. SLA quantifies the target quantity, quality, and cost of services in a period of time.
- Shared Services makes use of benchmarking and measurement of strategic, tactical and operative Key Performance Indicators to drive incremental performance improvement.
- Shared Services locations can be on-shore, near-shore or off-shore although near-shore and off-shore are more associated to outsourcing.
- The value of Shared Services for an organization grows over time – from short-term to medium-term benefits of cost reduction and reengineering for productivity enhancement, to long-term continuous improvement and integrated strategic service delivery.