by Vita Merlotti
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Shared Service Centers Result in Positive Gains

Shared Service Centers – financial, technical and otherwise – have driven great benefit for a number of organizations around the world, across a number of industry verticals. With proper planning, clear view of business objectives and expectations, clear view of risks, proven tenets for execution and measures on success, positive gains can be realized.

In today’s turbulent financial times, its more important than ever to maximize the value of your organization’s existing Shared Service Center through valuable expansion of services, and validation that your existing services drive the most effective metrics possible.Given the current global economy, there are also a significant number of organizations now seeking counsel on the creation of Shared Service Centers; 1) internal models; 2) third party on-shore options; and 3) offshore shared service center solutions.

Ask Critical Questions First

A significant contributor to the success of an organization’s move to a Shared Service Center, or the expansion of existing centers, involves first asking critical questions within your own organization. Success is best achieved when you begin with an informed and realistic set of expectations. Experienced partners can help you develop and refine this view against proven success.

The questions that follow are by no means exhaustive. They are however, a valuable starting point for those in your organization charged with finding efficient and effective solutions that will drive true P&L gain long-term. “Beginning” what can be a complex and challenging transformation is, at times, the most difficult milestone in final delivery. It’s important to take time upfront to ensure an informed, clear and realistic point-of-view. In the end, it will save time, money and duress for all involved.

What is the definition of a Shared Service Center in your view?

How would you define the types of services a Shared Service Center delivers? Why?

  • Ex - Client Accounting?
  • Ex - Data centers, networks and security?

What services would NOT be included in a Shared Service Center? Why? What business gains do expect will accrue from the creation or expansion of a Shared Service Center?

  • Ex - Margin improvement?
  • Ex - Quality improvement?

What challenges exist in the business today? Which business objectives are you solving for? What is this expectation for how a Shared Service Center operation would be structured?

  • Ex - Legal entity with defined P&L and Service Level Agreement (SLA)?
  • Ex – A department within finance or information services?

What expectations do you have with regard to change and the larger organization?

  • Will divisions & colleagues within the organization truly understand the depth of change that a Shared Service Center entails, its impact to the “front office” and their individual roles in ensuring success?

Assuming a business need or decision to deploy a Shared Service Center, what expectations exist?

  • Do you believe that incremental costs will be incurred during the deployment phase?
  • Payback periods? How long do you believe it will take for benefits to be seen and felt in real form?
  • Do you perceive a need for a phased approach? If yes, what are the phases and why?
  • Do you believe that the skills necessary for a successful Shared Service Center exist in house? Both with regard to execution and ultimately, ongoing delivery?
  • Do you believe there is a correlation between common operating systems & processes, and the performance & efficiency of a Shared Service Center?

Accounting

Do you have a true accounting of the costs your organization spends today for the services under consideration for centralization? Do you have an accounting for associated metrics that define performance and value? Who in the organization should be involved in defining a Shared Service Center model?

Who in the organization will ultimately champion a Shared Service Center deployment with respect to the board, executive management, key colleagues and any partners that will support the effort?