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As organizations continue to scrutinize operating costs and look for areas to drive efficiencies, shared services centers (SSCs) are a no-brainer. The concept of a multi-function SSC has been around for decades, but the strategic significance of consolidating resources such as accounts payable, HR, procurement and IT to lower costs, align skillsets, institute best practices, and drive economies of scale is still being realized by many expanding businesses.
According to Deloitte’s annual global shared services survey, companies with more than three SSC functions has increased by more than 40 percent over the last two years, with an additional 71 percent looking to increase the number of functions in the future. And this week, the Mississippi state auditor’s office found that its school districts could save more than $200 million a year by sharing services with other school districts.
How simple is it to set up a shared services model?
Sure, the idea behind a multi-function SSC is straightforward enough. As an internal customer service business, first identify what resources to consolidate and support the entire business. Then ensure that these resources track and charge back the services provided to the various business units. And while you’re at it, establish some clear service level agreements (SLAs) so that there are clear performance measures in place. From here, companies can step back to focus on other areas of strategic importance.
Unfortunately, the approach is not always as clear-cut. One of the biggest roadblocks is a lack of scalable processes to manage resources, calculate chargebacks and provide accurate reporting on SLAs to business units. What seemed like a smart move can wind up driving even more inefficiencies through a number of unintended consequences. For example, SSCs can struggle to manage numerous service requests and forecast future pipeline and resource demand, internal clients can lack visibility into the services being offered, and executives may need to intervene due to the friction between SSC and clients.
What drives sharing services success?
Challenges can be overcome by establishing automated processes from the onset. A cloud-based shared service management solution can help stakeholders by effectively capturing costs of services delivered and calculating chargebacks with ease, allocating resources more effectively based on demand, and equipping internal clients with the analytics to monitor the costs of services consumed.
There are five key technologies to an effective automated shared services solution, which are:
1. Time tracking – easy-to-use timesheets and automated reminders for people to remember to capture their time, as well as simple workflows to approve time worked
2. Resource management – the ability to assign employees to projects based on skills and availability, with “placeholder” resources marked to more efficiently plan for future demand
3. Project costing – complete visibility and control over countless project costs, status and deadlines, which can also seamlessly integrate with virtually any project management software
4. Analytics and reporting – powerful insights into resource allocation, resource utilization and project updates, without needing to spend hours finding the data or piecing it together
5. Integration – a fast and seamless integration to other applications – including payroll, HR, finance and ERP systems – to streamline the chargeback process.
There’s no doubt that the SSC model can generate huge cost savings and benefits. With executive support, a culture that wants to drive continuous improvement, and the right enabling technology platform and solutions, companies can experience cost, productivity, quality and service benefits. Are you effectively driving shared services success in your business?