Shared-Services Organizations Reduce Complexity

By Diana Mirakaj Print this article Print

A shared-services organization (SSO) can improve operating efficiencies by eliminating duplication and streamlining processes

As companies have become more complex—and simultaneously more integrated—the need for additional cross-collaboration and more effective leveraging of available resources has become increasingly significant.

A shared-services organization (SSO) consolidates support operations into a service-oriented organizational unit and can substantially improve operating efficiencies by eliminating duplication and streamlining processes.

In concept, establishing an SSO can be simple. However, the organizational and human implementation components can complicate the task, and optimizing an SSO’s performance is often a challenge. Depending on the maturity of the enterprise and of the SSO itself, it can run as its own commercial-grade business, always seeking to deliver the highest quality, while being the lowest-cost provider of services. Optimized SSOs have proven to be centers of both value and cost reduction.

The consolidation and standardization enabled by shared services do more than reduce costs. They also reduce complexity so that businesses can respond to opportunities more quickly. The more integrated an SSO is with the company’s strategic goals, the more adaptable it can be in a constantly changing environment.

An SSO must distinguish between commodity and strategic services; align and package services around business processes; and orient service designs and service levels toward the customer experience. In the process, an optimized SSO improves its overall value/cost contribution to the business and enables its customers in the business to optimize their own value in return.

A Change in Mindset

The journey to become an optimized SSO requires desire, discipline and the ability to execute a plan. Furthermore, optimizing service delivery involves more than simply moving people into one location and giving them one system. It requires a change in mindset and an increased focus on the business. Successful implementations integrate processes, people, information and technology automation to deliver a totally new set of capabilities.

To get started, an organization must begin by assessing its readiness and its business case for creating an SSO. Following that, a design of the future business and operating model should be created. This design includes the development of an appropriate organizational structure, funding allocation, governance, services portfolio and operating processes.

The benefits of an SSO include the ability to:

• significantly reduce the operating costs of existing services;

• increase compliance, control and consistency on a global basis through consolidation;

• provide clarity into services and customers with the creation of a service portfolio;

• introduce a much higher capability for innovation and the adoption of rapid business changes; and

• assign critical transaction support through an increased ability to pool knowledge and expertise that remains focused on core activities.

This article was originally published on 2011-01-28

Diana Mirakaj is the chief marketing officer at BTM Corporation.

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