![]() ![]() Shared services are more than just centralization or consolidation of similar activities in one location. It is claimed that transformation often results in a better quality of work life for employees although there are few case studies to back this up. Ī large-scale cultural and process transformation can be a key component of a move to shared services and may include redundancies and changes of work practices. Further, by the end of 2015, the NASA Shared Services Center is expected to save the organization a total of over $200 million, according to NASA's Director of Service Delivery. At NASA, the 2006 switch to a shared services model is realizing nearly $20 million of savings annually. A global Service Center Benchmark study carried out by the Shared Services & Outsourcing Network (SSON) and the Hackett Group, which surveyed more than 250 companies, found that only about a third of all participants were able to generate cost savings of 20% or greater from their SSOs. Traditionally the development of a shared-service organization (SSO) or shared-service centre (SSC) within an organization is an attempt to reduce costs (often attempted through economies of scale), standardized processes (through centralization). The joint venture involves the creation of a separate legal commercial entity (jointly owned), which provides profit to its shareholders. ![]() It is sometimes assumed that a joint venture between a government department and a commercial organization is an example of shared services. There is an ongoing debate about the advantages of shared services over outsourcing. Shared services is different from the model of outsourcing, which is where an external third party is paid to provide a service that was previously internal to the buying organization, typically leading to redundancies and re-organization. The typical method is to simplify, standardize and then centralize, using an IT 'solution' as the means. This argument assumes that efficiencies follow from specialization and standardization – resulting in the creation of ‘front' and ‘back' offices. The second argument is ‘efficiency through industrialization’. The former is ‘obvious': if you have fewer managers, IT systems, buildings etc if you use less of some resource, it will reduce costs. There are two arguments for sharing services: The ‘less of a common resource' argument and the ‘efficiency through industrialization' argument. For example, adjacent Trusts might decide to collaborate by merging their HR or IT functions. Shared services is similar to collaboration that might take place between different organizations such as a Hospital Trust or a Police Force. The provider, on the other hand, needs to ensure that the agreed results are delivered based on defined measures ( KPIs, cost, quality etc.). This sharing needs to fundamentally include shared accountability of results by the unit from where the work is migrated to the provider. The key here is the idea of 'sharing' within an organization or group. Thus the funding and resourcing of the service is shared and the providing department effectively becomes an internal service provider. Shared services is the provision of a service by one part of an organization or group, where that service had previously been found, in more than one part of the organization or group. Method for provisioning shared organizational resources ![]()
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