In a highly cost-conscious business environment, companies have been on the look out for various technological advancements and business models that might help generate a better bottom line. This has resulted in companies across various industries and geographies shifting towards a shared service model.
The basic objective of a Shared Services Center (SSC) is to achieve a higher level of service quality at a lower cost. The centralization of back office tasks including finance, human resources (HR) , and information technology(IT) functions, enables business integration and can lead to significant cost savings. Further, shifting to a SSC allows management to focus on strategic initiatives, freeing time and resources for better decision making. Apart from the major non-core, support functions such as finance, HR, IT, legal, procurement, shared services can also potentially expand into other support functions such as marketing, customer support, distribution and logistics.
However, instituting a SSC is only half the measure towards an improved bottom line. The first and foremost challenge lies in the implementation of new standardized processes (not transfer of existing processes), while making a shift to a SSC. Before migration to a shared services center most processes are performed locally and economies of scale are expected to result from the elimination of redundant business processes. Secondly, SSCs are under constant pressure to reduce costs, while at the same time improve quality through better customer service and a lower defect rate. Finally, as soon as the SSC has been established and is operating steadily the focus changes to continuous improvement of service delivery. In order to ensure sustained value, the SSC needs to proactively anticipate changes in ‘customer’ requirements and respond accordingly.
SSCs need technology that can address these challenges and simplify the consolidation, centralization, standardization and automation of functions and processes. This is where Business Process Management (BPM) can add value. With the market maturing and focus shifting from simple to complex processes, BPM brings about continuous process improvement and enables SSCs to achieve operational process excellence for optimal service, quality and cost.
