Considering the current scenario, employees working in firms with several divisions confront difficulties navigating across departments to meet their demands. As a result of a lack of organization and coordination among service providers, employees face confusion and irritating internal experiences. Implementing the business shared services model can solve this problem as it supports better management of tasks by bringing structure to daily operations.
A shared services model establishes a central service delivery function, giving a standardized approach to processes, systems, and services. This centralized strategy improves efficiency, resource allocation, and response times, resulting in cost savings and greater output.
This blog will cover the concept of shared services and how this model can help businesses prepare for their digital future.
Considerations of Adopting a Shared Service Model in Business
Simply put, the shared service model is a business strategy in which different departments or business units within an organization share a common service delivery role. It can include important functions like information technology, human resources, finance, procurement, and other administrative tasks. The primary goal is to boost operational efficiency, reduce costs, and improve service quality by standardizing and centralizing operations.
An increasing number of businesses are taking the shared services concept to the next level by centralizing and standardizing shared services across different locations and business units worldwide, formerly called Global Business Services (GBS). Implementing a GBS model also assists organizations in streamlining operations and optimizing resource utilization while giving better flexibility and scalability. However, this is especially crucial for organizations that operate in various locations since it helps to maintain uniformity and standardization across geographies.
What is the Impact of Digitalization on Shared Services?
Digitalization has the potential to transform shared services. The impact is significant and far-reaching. Organizations should carefully plan and manage their digital transformation, considering the shared functions and the broader organization’s particular demands and expectations.
Some of the primary ways that digitization is transforming shared services are as follows:
● Reduces errors, cycle times, and costs, allowing shared services to streamline and optimize their processes
● Using digital tools to collect, analyze, and leverage data more efficiently
● Makes shared services available to internal consumers as self-service options, such as portals and mobile apps, allowing them to access services and information more easily and quickly
● Improves cooperation and communication across functions and locations, allowing shared services to collaborate with other sections of the organization more effectively
● Supports shared services in providing the organization with new and creative services (data analytics, digital marketing, etc.)
How Can Shared Services Prepare Organizations for Their Digital Future?
The shared services can play a critical role in helping organizations prepare for their digital future by creating a more consistent, efficient, and scalable digital environment supporting their growth and innovation objectives.
Making Organizations Future Ready (Digitally) Using Shared Services Model:
● Shared services build a more consistent and efficient digital environment by standardizing procedures and technologies across multiple business units and countries.
● Shared services can give businesses the scalability they need to expand and respond to new digital opportunities. It involves expanding their operations rapidly and effectively, launching new products and services, and entering new markets.
● Digitalization can be costly; however, shared services can help organizations save money by integrating their technology and service delivery resources.
● Shared services can help organizations respond to changing business needs more rapidly while providing the agility and flexibility required to explore new digital opportunities.
● By promoting collaboration and knowledge sharing, shared services can help organizations to explore new digital opportunities and develop new products and services that can drive growth and competitive advantage.
Understanding the Challenges of Business Shared Services
Implementing a shared services model requires a significant change in how an organization operates, which is challenging to many. Some of the common challenges include the following –
● In a shared services model, ensuring effective governance and accountability can be difficult since different departments or business units may have different demands and expectations. Multiple departments or business divisions may have diverse cultures and styles of working, making standardizing processes and systems difficult.
● A shared services model might expose an organization to dangers such as data breaches and system breakdowns.
● In a shared services model, defining clear service levels and expectations is critical to ensure that all stakeholders are aligned and that service quality is maintained.
Examples of Organizations That Have Successfully Integrated Shared Services
The following examples demonstrate how organizations can integrate shared services and digital transformation to achieve significant cost savings, efficiency, and improved service quality.
Unilever: By introducing a shared services model and digital technology, Unilever (a multinational consumer products firm) revolutionized its HR and finance divisions. They could centralize their services, standardize processes, and increase data quality.
Vodafone: Another popular example is Vodafone (a telecoms firm) that transformed its financial division by implementing a shared services model and digital technologies. They utilized automation, robotics, and data analytics to standardize processes and increase data quality.
Preparing for a Digital Future with a Strategic Shared Services Model
Adopting a shared services model can help organizations prepare for their digital future by streamlining processes and enhancing service quality. However, to successfully deploy a digital- ready shared services model, the shared services strategy must be aligned with the overall business strategy and goals. There is also a need to establish clear service levels, standardize processes and systems, establish effective governance and accountability, and more. An organization can establish a more effective and efficient shared services model by employing prominent techniques, resulting in a streamlined and coherent internal experience for employees.