Business shared services have become an important aspect of global business services because they provide a centralized function to support multiple organizational business units. The main objective of a shared service center (SSC) is to standardize and streamline services, reduce costs, and improve the overall efficiency of an organization.
This blog will explore the following key considerations for designing a successful shared service center.
Understanding Business Requirements and Services
The first consideration for designing an SSC is understanding the requirements and the business shared services associated with them. It is essential to clearly understand the services that will be offered and the objectives that the SSC will aim to achieve within the stipulated time frame.
It is important to conduct a thorough analysis of the business requirements, considering factors such as the size of the organization, the nature of its operations, and the services it requires. This information will help to identify the key areas where a shared service center can provide value, such as procurement, finance, human resources, and information technology.
Deciding on the Location of the SSC
Once the requirements have been identified, the next step is to decide on the location of the SSC. The location should be chosen depending on factors such as access to a skilled workforce, the cost of living, and the availability of technology and infrastructure.
In some cases, organizations choose to set up their SSCs in low-cost locations to reduce costs. On the other hand, a few others opt for locations that have a highly skilled workforce to ensure quality service delivery.
For example, some organizations choose to set up their SSC in locations such as India or the Philippines, where the cost of living is low and there is a large pool of skilled workers.
On the other hand, some organizations choose to set up their SSC in locations such as the United States or Western Europe, where the quality of life is high and there is access to a skilled workforce.
Choosing the Right Technology
Technology is another crucial consideration for designing an SSC. The right technological functionalities will enable SSC to deliver services efficiently, securely, and cost-effectively. The technology should be chosen based on the services that will be provided, the volume of transactions, and the level of security required. It is also important to consider the scalability of the technology, as the SSC is likely to grow over time.
For example, some organizations choose to use cloud-based solutions for their SSC because they are scalable, secure, and cost-effective. Other organizations opt for on-premise solutions because they provide a higher level of control and security over the data.
Structure and Governance of the SSC
Another important factor to consider is the structure and governance of the SSC. It should be structured in a way that promotes collaboration and communication between the different business units. A clear governance structure should also be established to ensure that the SSC is accountable, transparent, and effective in delivering services.
For example, the SSC may be structured as a separate entity within the organization, with its own management team and governance structure. Alternatively, it may be integrated into the existing business units, with clear reporting lines and responsibilities.
Operating Model of the SSC
The SSC should also have a well-defined operating model that outlines the processes, systems, and technology used to deliver services. This will help to ensure that it is able to deliver services efficiently and effectively and that it is aligned with the overall business objectives.
For example, the operating model may include a clear service delivery model, with defined service levels and key performance indicators (KPIs). This will ensure that the SSC is able to deliver services in a consistent and efficient manner and that it is able to meet the expectations of the business units that it supports.
The operating model should also include clear roles and responsibilities for the employees within the SSC, as well as a training and development plan to ensure that they have the skills and knowledge to deliver services effectively.
Measuring the Success of the SSC
The final consideration for designing an SSC is to have a clear strategy for measuring its success. This will help ensure that the SSC is delivering value to the organization and meeting its objectives.
One way to measure the success of the SSC is to conduct regular assessments of its performance, using KPIs such as cost savings, process efficiency, and service quality. These assessments should be used to identify improvement areas and make changes to the SSC as required.
Another way to measure the success of the SSC is to engage with the business units it supports and gather feedback on the services it provides. This feedback can be used to make improvements to the SSC and to ensure that it is meeting the needs of the particular business.
In conclusion, designing a successful shared service center requires careful consideration of the business requirements, location, technology, structure, governance, and operating model.
However, it is important to consider key factors such as the location, technology, structure, governance, and operating model when designing an SSC to ensure its success.
By following these key considerations, organizations can ensure that their shared service center can deliver cost-effective, efficient, and high-quality global business services to enhance further growth.