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Six approaches to successful shared services

Overview

The efficiency and cost saving potential from shared services has become increasingly important to the futures of both public and private entities. After the publication of the Comprehensive Spending Review, minimising costs spent on back office functions became a critical aspect of transformation.


In the economic downturn, both mergers and acquisitions increased in the private sector as companies joined forces to survive, and sharing back office activities has become fundamental to change. In the public sector, collaboration between public services has increased. Sharing services by merging back office functions such as finance, procurement, HR or IT reduces costs by reducing staffing levels, IT systems and physical space needed.


The move to shared services does not always involve creating shared services centres. The six most common approaches to sharing making the best use of both technology and resources are: management, operations, technology, contracts or framework agreements, as well as systems and transactional processing. Sharing these functions provides a foundation for public and private sectors to save millions of pounds a year as well as benefiting from streamlining, standardisation and customer service improvements.


Despite the apparent advantages of shared services, it is common for public sector bodies to set up shared service centres, then struggle to find partners to share them. The transition to shared services involves a cultural change, as the service centre culture and objectives are very different from the business model used by individual departments. The help of specialist management consultancies to support the operational and cultural transition is an important factor to a successful outcome. There have been many examples of successful transition to shared services, and the financial savings and service improvements have been considerable.


This paper studies six approaches to successful shared services.

Tags: Performance management, Mergers, M&A, Strategy.

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