Driving greater value from shared services

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“The traditional outcomes targeted by shared services remain important; cost reduction, efficiency and capability improvement. However organisations are now looking to gain more value from their shared services operations. The ability to scale up (or down) back office functions in response to acquisitions, mergers, divestments, growth and decline is a valuable commodity in today’s uncertain economic climate and a characteristic our clients are increasingly looking for.”

David Fincher
Partner, Advisory, EY

State of play

We live in an increasingly competitive economic environment. Wider variation in market performance, greater market volatility and ceaseless pressure on margins has compelled organisations to intensify their focus on operational agility and cost competitiveness.

Governments are also looking to make productivity improvements as they struggle to work through a tough fiscal environment. To help achieve this, organisations have been transferring activities into Shared Service Centres (SSCs) — which are now very much part of the fabric of leading organisations.

However, 28% of organisations are yet to embrace SSCs and of those that have, over 50% are immature (under two years old). For more mature SSCs, common issues are restricting their performance and limiting their ability to help their organisations.

Why implement Shared Service Centres (SSCs)?

Organisations with high—performing SSCs are considerably better placed to handle the uncertainties of today’s market and deliver better results for stakeholders. For organisations implementing SSCs for the first time and those with underperforming SSCs, a strategy that focuses on standardisation, scalability and scope will deliver the greatest flexibility and agility for their organisation.

1. Standardisation increases flexibility by improving the organisation’s ability to integrate new operations (such as acquisitions) or remove activities no longer required (such as divestments).

2. Scalability is achieved through centralisation and performance management. Centralisation increases the visibility of resources and their responsibilities, supporting effective management. Performance management provides clarity over who is doing what, where, how and at what cost. It enables faster, more effective decisions to be made.

3. Greater functional and geographic scope increases agility and flexibility through increasing the influence of the SSC over operations. It is also much easier to take advantage of alternative sourcing options whether offshore and/or outsourced.

Driving greater value from your Shared Service Centres (SSCs)

SSCs are widely recognised as excellent ways to reduce costs and improve performance, however, many organisations have not fully embraced this delivery model and are not maximising the returns on their investment.

More than ever, SSCs are crucial to helping organisations ride out economic uncertainty. They can deliver greater flexibility through increased standardisation, scalability and service scope. Organisations should revisit their shared services strategy to ensure that they are utilising their SSCs to the greatest advantage. They should move fast to increase flexibility and understand where opportunities exist to leverage offshore and/or outsourced capability from a strong shared services base.

Read more about rapid assessment methodology and SSCs here - Shared Services Optimisation: Elevation to the next generation of shared services

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