6 Characteristics of the Best Shared Services Centers

 Businesses commonly undertake large-scale transformational projects to find more economical and effective service delivery methods. They aim to deliver greater value, realize economies of scale, maximize the use of already-existing capabilities, streamline procedures, and boost responsiveness, flexibility, and the caliber of the services provided. The establishment of shared service centers (SSCs) is one remedy. Through the use of already-existing skills across business units, these have been demonstrated to create cost savings and boost profitability.

But in order to fully realize the value of SSC, it is necessary to communicate the necessity for change and the benefits that change can offer in an appropriate and effective manner, in addition to designing and implementing a robust framework, structure, and processes. This can be a very difficult challenge. The numerous SSC service recipients rarely see value in the same way since they have different demands and requirements, which frequently create their own special problems. The proponents of SSC deployment or those charged with explaining its justification must therefore address any perceived purposes, allay any worries or apprehensions, and be ready to guide the process from inception to conclusion.

 

An engine to boost efficiency

The organizational structure of HR shared service centers and financial shared service centers have already proven to have advantages in terms of cost-effectiveness, improved service efficacy, increased agility, and less complexity. SSCs are strategically important to produce bottom-line results in borderless, technologically advanced, and fiercely competitive economies. Following are the key characteristics of the best shared serviced centres:

1. Create and put into action a global delivery model: The majority of businesses start their shared services journey by putting in place a shared services delivery model in their own nation or area. They export the idea to other parts of the world once they are happy with the preliminary outcomes. With each region attempting to drive productivity and cost reductions on its own, this frequently results in a suboptimal approach. The most forward-thinking businesses have a global perspective on shared services and set up organizational structures and policies that are meant to maximize the global model. In most cases, the number of physical locations is reduced to a single big global center and a number of smaller regional hubs. The SSC’s head oversees all worldwide operations and ensures that business units receive consistent service across all areas.

2.   Increase the company's reach and size: Commonly, shared services start with the fusion and standardization of high-volume processes like cash application or accounts payable. At this point, a lot of firms stagnate and are labeled as transaction processing factories. The most forward-thinking businesses strive to broaden both their geographic reach and the depth of their service portfolio. There are no anomalies and no business unit opt-out options for these companies. The shared services organization provides services to all of the company's employees, locations, business units, and nations. Modern businesses don't just evaluate prospective processes based on the inherent cost benefits of high-volume transaction processing; they also assess scope expansion to incorporate expert functions.

3.  Think about automation as well as labor arbitrage: To reap the benefits of labor arbitrage, businesses have relocated transaction-processing operations to low-cost regions over the last two decades. These initiatives seek to increase organizational capabilities, enhance procedures, cut costs, and carry out the strategy. SSCs ought to take robotics skills into account. Advanced robotics, including cognitive computing and machine learning tools, may be able to automate jobs that SSOs are currently unable to do. More than 80% of shared services businesses, according to Gartner, have automated routine, repetitive, rule-based tasks using robotic process automation (RPA) technology. RPA empowers shared services leaders to obtain increases in productivity and cost savings above and beyond what labor arbitrage can deliver alone.

4.  End-to-end process owners can help propel uniformity: A single process, like accounts payable, has the potential to be made more efficient and productive. Any process that is housed inside SSCs likewise has this potential. These restrictions have not stopped our most sophisticated members from appointing global process owners, who are in charge of end-to-end processes like order-to-cash or purchase-to-pay on a global scale. In addition to promoting uniformity, GPOs are in charge of tasks including assessing and enhancing process quality, implementing best practices, managing connections with external parties, tracking customer satisfaction, and determining technical requirements.

5. Deploy rule-based work in low-cost regions: Transactional tasks should no longer be carried out locally. These days, nearly anywhere in the world can accomplish this activity because of technology and communications infrastructure. The most forward-thinking businesses have carefully considered their geographical strategy and justified both the location of labor and whether it is outsourced or retained in-house. A competent firm considers all operational needs as well as stakeholder objectives before making a sourcing decision, even when the reduced cost is a heavily weighted element. Labor arbitrage is one of the primary reasons that businesses choose a BPO partner, along with access to technology, simplicity of demand forecasting, increased standardization, and the capacity to concentrate on core company operations.

6. Consider skill to be a key value: Businesses have significantly improved processes over the past 20 years by reengineering, utilizing technology, and altering rules. Several of these businesses have done very little to empower their partners or staff to provide business unit clients with an additional layer of value. The most forward-thinking businesses understand that investing wisely in staff training requires money that cannot be surrendered during the initial round of budget cuts. According to a study by CEB Shared Services, problem-solving abilities are more important than other competencies like results-seeking and communicating, and they have a four times greater impact than functional competence.

In conclusion

While SSCs can significantly benefit enterprises, each one should take the time to comprehend the unique traits, wants, and requirements dictated by its surroundings. The business model, market, culture, industry, and competition should all be considered, but they are not required to be. These elements may differ dramatically amongst business units, even within the same firm.