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.
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.