Business

Shared services are a great tool to reduce administrative costs

Shared services are a great tool to reduce administrative costs

The shared services value proposition originally focused on cost synergies and centralization of resources. In recent years, these services have been converted to become more important to the business units they serve.

That’s why today, instead of just being a centralized function, they perform multiple functions and operate as a business unit serving the internal customer. In this way, business units are available to spend most of their time on external clients and on matters of strategic importance.

The main benefits of multi-function shared services are increased efficiency and effectiveness of the business. The improvement in efficiency is materialized by the standardized implementation of best practices in all processes, the maximization of the use of economies of scale, a greater “ scope of control ” (dispersion / size of equipment), reduction of labor costs, maximization of return on investment in technology, standardization and reengineering of processes, integrated purchasing and procurement. In terms of efficiency, the improvement translates into a focus on customer service through the front-office mentality, the use of SLAs and the calculation of the cost of the services offered; optimization of the skills of experts, more availability of leadership to focus on business issues and better support for decision-making.

This new model is called Global Business Services and has been implemented as a new industry standard, responsible for reducing the administrative costs of the organizations that implement it by around 20% to 30%.

Likewise, to successfully implement shared services, the key is to always remain focused on the internal customer, to be at the heart of the digital and technological skills of the organization, to implement an agile culture focused on l continuous improvement and talent management. . as a key asset.

Expert opinion

Kaizen Institute brought together experts from different industries to discuss this issue and how shared service hubs can impact and drive business strategy.

Borja Iglesias, Country Director, Kaizen Institute introduced the debate by stressing that “more and more companies are opting for shared service hubs, due to the confluence of two factors. On the one hand, competitive pressure is increasing and the demand for “rationalization” of processes is more and more palpable in non-operational areas. On the other hand, companies are more and more global, with outsourced teams and many duplicate functions. these shared service units is to ensure greater efficiency, but at the same time to be relevant to the organization by providing better service. ”

Lidia Niculai, Senior Director of the Global Shared Services Center, Duracell Inc. explained that “the most important thing is to have a very clear vision of our destination as a shared service. There is a clear trend, a change in the shared services model that started in the late 1980s. Initially it was a very transactional model, focused on low value added tasks and low cost centers. . The model evolves into an end-to-end process and focuses on continuous improvement and value creation, which is the main mission of shared services. Understanding the processes and requirements at national, regional and global levels, allows to optimize and standardize the processes to better control them and improve the level of service.

Raoul Martnez, Head of Oxygen COO office, BNP Paribas commented regarding the decision making on where to perform a process that it is “ very important to define a model from the start to know which countries are doing which tasks . Doing it internally or as a subcontractor depends on the volume of the business. In the case of large companies, internal platforms are developed and smaller ones will go to external platforms. “He also highlighted the importance of the digital transformation influencing this CCS model, allowing workers to be appointed in terms of both material and tool use.”

Scar Garca Escarda, PMO, Processes and Digital Transformation Director, TK Elevator for Spain, Portugal and Africa (formerly: Thyssenkrupp Elevator) addressed the role that digital transformation plays in this area: “ There are those who see shared service centers as centers where we can perform low value tasks, however, with technology and a committed human team, we are making this something key for the business and ultimately for provide better service to our customers. ”

Through this link you can access the full event.

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