The recent economic situation within the UK has driven many organisations to investigate and move over to a shared service business model, the costs savings that are made through the Shared Services model has mainly driven these decisions. But what is a Shared Service Model and what additional benefits do organisations get when using this model?
Shared Services is a term used for bringing together business activities that are common across multiple business units within an existing organisation. In many instances Shared Services becomes it’s own separate business unit that delivers multiple service functions to the other business units or its headquarters. The functions that are commonly moved across to Shared Services include the following:
• Human Resources
Once adopting this model, organisations find that there are additional benefits some of which we have covered below.
Benefits of a Shared Services Model
Economies of Scale.
Gaining economies of scale through locating the shared services in a relatively low cost location, as well as reduction in head count, infrastructure costs and a reduction in taxation.
This is one benefit that is often quoted as being a fundamental outcome from moving over to Shared Services. Centralising allows you to ensure that agreed service levels; both internally and externally are being met. It also allows you to adapt quickly to any changes.
By centrally managing your core operational business functions, you are able to implement and update processes from a central point across all business units within the organisation. Thus allowing best practice and efficiency to achieve superior customer service.
Increase in Professionalism
Centralising organisational experts together allows you to identify training requirements within the teams to ensure skills are to the highest levels. It is often difficult to identify training needs when experts are dispersed around the organisation, especially if they are located on different sites.
Having up to date, reliable business data centrally, that can be analysed and delivered in a timely fashion from a purpose built business function.
Shared Services can be scaled either for acquisition, or downsizing an organisation with relatively low incremental costs.
Common Technology Platform
As well as improving processes, professionalism and service levels, centralising services will also allow you to update possible multiple technology platforms to a centralised modern fit for purpose platform contributing to improved customer service and efficiency.
NDJ Consulting has significant experience in providing the resources required to support organisations wishing to adopt a Shared Services Target Operating Model; if you wish to discuss you recruitment needs, please contact Neil Jury.