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Shared Services Center
USD 51.1 Billion
The total market size of the global Shared Service Center industry in 2023.
1,600+
Shared Service Centres in India make up 15% of the global total.
80%
Of Shared Service Centers globally leverage Robotic Process Automation to automate routine rule-based tasks.
As organizations expand across business verticals and geographies, so does their need for efficient shared services to provide various support functions, like human resources, finance and accounting, IT, and more. When individual departments or offices work in isolation, they often experience inefficiencies, duplication of efforts, and inconsistent service delivery, leading to higher operational costs and fragmented processes that hinder organizational growth. That’s where the concept of a Shared Services Model comes in.
What are Shared Services Center?
Shared Services Center, also known as shared service centrums, are centralized service delivery hubs within a large organization, dedicated to powering specific business functions across various departments and offices. These shared service providers consolidate functionalities like accounting, human resources, and IT under a single unit, enabling the enterprise to reduce duplication of effort, standardize processes, and gain highly useful insights from shared knowledge. This streamlined approach often leads to significant cost savings, with many enterprises implementing shared services centers reducing service expenses by 50% to 70%.
Centralization and the Economies of Scale
Adopting shared service centers as a strategic model enables enterprises to achieve operational excellence, especially in complex global environments. By centralizing core support functions, organizations can streamline operations, deliver exceptional service, and ensure a uniform, high-quality experience for all stakeholders, all while optimizing efficiency and controlling costs. Additionally, leveraging advanced technologies such as automation, AI, and data analytics enables SSCs to streamline workflows, improve accuracy, and enable real-time, data-driven decision-making. This tech-driven advantage makes modern-day SSCs a critical asset in today’s competitive business environment.
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How do Shared Service Centers increase organizational efficiency?
Shared Service Centers enable enterprises to operate with greater efficiency and agility by consolidating essential functions like finance, HR, legal, and IT into a single, centralized unit, eliminating redundancies, reducing human error, and achieving economies of scale. Standardized processes ensure consistency and efficiency across the organization, while automation of certain tasks frees up skilled professionals to focus on strategic initiatives. More importantly, centralizing these functions within a single unit allows enterprises to standardize workflows and derive valuable insights through shared expertise.
What role does a Shared Service Center play in a company’s global growth strategy?
Shared Service Centers play a crucial role in a company’s global expansion strategy. Through these centers, organizations can access highly skilled talent, emerging new technologies, and a scalable and agile operational framework, which consequently enables them to penetrate new geographical markets. SSCs considerably enhance coordination and strategic alignment across multiple regional units of an organization by consolidating global operations within a single unit. Additionally, SSCs ensure uniformity in processes across regions, helping companies maintain compliance with international regulations and standards as they expand.
What is the future outlook for Shared Service Centers in the context of emerging global trends and technologies?
As businesses navigate global challenges, SSCs will continue to evolve, becoming smarter and more resilient in delivering seamless, tech-enabled services by leveraging AI, RPA (Robotic Process Automation), and data analytics, driving even greater efficiency, agility, and cost-effectiveness. With increasing digitalization and the shift to globally distributed teams, SSCs will become more integral to global operations, continuing to power core functionalities critical to organizational growth.
Which industries benefit most from the Shared Services model?
Due to its agility, scalability, and cost-effectiveness, the SSC model is adaptable to every industry, ranging from technology, finance, healthcare, and retail, to aviation, logistics, travel and tourism, and even specialized apparel. For example, Banking, financial services, and insurance companies use SSCs to centralize functions like accounting and payroll, reducing costs and improving compliance. In healthcare, SSCs streamline administrative tasks such as billing and claims processing. IT companies leverage SSCs for unified support services across global operations, while manufacturing businesses utilize them for procurement and supply chain management, enhancing efficiency and consistency across regions.
Which factors should be considered when selecting a location for a Shared Service Center?
When selecting a location for a Shared Service Center, companies should consider factors such as access to skilled labor, cost of operations, and infrastructure availability. Proximity to key markets can enhance communication and service delivery. Additionally, evaluating local regulations and government incentives is crucial for compliance and cost savings. Time zone alignment is also important for global operations, ensuring seamless collaboration. Finally, the presence of a robust technology ecosystem can facilitate innovation and efficiency in service delivery.
What are the key performance indicators (KPIs) for a successful Shared Service Center?
Shared Service Centers track their success through a mix of KPIs that can be broadly categorized into three areas:
- Customer Service: First Contact Resolution (FCR), customer satisfaction (CSAT) scores, and adherence to Service Level Agreements (SLAs).
- Efficiency and Financial ROI: Here, cost per transaction, processing times, and utilization rates are key. These measure how cost-effective and productive the Shared Service Center is.
- Quality and Compliance: Accuracy rates, error rates, and compliance with regulations track how well the center delivers error-free work and adheres to set standards.
How does the local talent pool impact the success of a Shared Service Center?
Access to a diverse and skilled pool of talent is crucial for Shared Service Centers to benefit the larger enterprise. A strong local talent pool ensures access to skilled professionals with the necessary expertise in areas such as finance, IT, and customer service, which is critical for effective operations. Local talent often possesses an understanding of regional business practices and customer expectations, enhancing service delivery and client satisfaction. A readily available talent pool can lower recruitment costs and time, allowing the Shared Service Center to ramp up operations quickly.
What are the typical timelines involved in setting up a Shared Service Center?
ANSR’s team of in-house experts ensures that the end-to-end setup of your Shared Service Center is completed within 4-6 weeks. Generally, setting up a Shared Service Center can take anywhere between 6-8 months from the initial date, depending on various factors such as location selection, regulatory approvals, infrastructure setup, talent acquisition, and technology deployment. However, with ANSR’s end-to-end offering, the process is more seamless and faster.
How can I scale my SSC and ensure continued success?
An SSC can be scaled in alignment with the business goals, from expanding into
new talent-rich regions through a multi-city approach (establishing independent operations across multiple cities), or a hub-and-spoke approach, which involves setting up a central hub (main office or headquarters) and several smaller satellite offices (spokes). Many companies also explore a combination of metro and non-metro, or tier 1, 2, and 3 cities to extract optimal cost, talent, and infrastructure advantages.
How does ANSR assist in the setup and management of an SSC?
ANSR provides an end-to-end solution for SSC setup
- Step 1- SSC Model and Design: Intake, talent intelligence, and strategic consulting for every aspect of setting up the SSC, ultimately culminating into the SSC Operations Playbook.
- Step 2 – SSC Solutions and Setup: Setting up and registering a legal entity, talent acquisition, workspace design & setup, and systems configuration to streamline your global operations.
- Step 3 – SSC Operations: Complete talent lifecycle management, building the EVP(employee value proposition) and employer branding, onsite IT support, workspace management and finance, and tax & regulatory compliance.
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What are the costs associated with establishing and maintaining a Shared Service Center?
The costs associated with establishing a Shared Service Center include initial setup expenses such as facility acquisition, infrastructure development, and talent recruitment. Ongoing maintenance costs encompass salaries, technology upgrades, and operational expenses. While these costs vary based on location and scale, the long-term benefits of cost savings and operational efficiencies often outweigh the initial investment.
ANSR’s team of experts collaborates closely with your internal teams to integrate our offerings with your strategic objectives. From conceptualizing and defining the value proposition of your Shared Service Center to the establishment and operational launch, we ensure seamless alignment with business goals.
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