Shared Service Center Research Articles

Creating a Unified Shared Services Experience

To provide more value to customers and increase the competitiveness of the organizations, managers are looking to explore beyond the traditional business models such as – centralized, decentralized, outsourced and insourced models, and recent prominence to shared services model. Bergeron defines shared services as: Shared-services is a collaborative strategy in which a subset of existing business functions are concentrated into a new, semi-autonomous business unit that has a management structure designed to promote efficiency, value generation, cost savings and imposed service for the internal customers of the parent corporation, like a business competing in the open market.Portfolio of shared services centres (SSCs) in organizations is increasing because functions are willing to share more complex and knowledge-oriented services such as RD Customer Service (Computer customer support, Field service, Telephone customer support); Finance (General accounting, Payroll processing, Purchasing Taxes, Transaction processing); Human Resources (Recruiting, Staffing Training, Workers’ compensation, Relocation); Sales and Marketing (Advertising, Direct mail, Field sales, Telemarketing) etc. The basic premise for shared services seems to be that services provided by one local department can be provided to others with a better efficiency. But, as organizations are becoming more and more global the need for sharing services are also increasing, making shared service units more complex. An efficient and streamlined business unit is a necessary but insufficient condition for a successful shared services implementation. While individual SSCs offer great advantages to the parent organization in terms of cost reduction, greater efficiency and economies of scale, the service delivery design must attempt to create an experience-centric service that can integrate the individual, differentiated and specialized SSCs on to a single platform. Experience-centric service organizations deliver services in which the customer experience is at the core of the service offering. A key characteristic of experience-centric services is that they are designed to engage customers, that is, to enable the customer to connect with the service. As the number of points where the customer can connect with the service increases, the number of experiences also increases. Designing experience-centric services thus involve the management of a chain of service encounters that surround the service delivery experience. The ability of organizations to create great customer experiences during service delivery has been realized to create customer satisfaction and loyalty. While extant literature has focused on external customers of organizations research on experiences of the internal customers of the organizations has remained scant. Customer orientation literature has focused predominantly on the importance of external customers and pays little attention explicitly to the role of internal customers or employees of a firm who work within the boundaries of the organization. In the current study, we focus on the design of an experience-centric service platform for the internal customers of an organization. While current research on organization design has focused on creating shared services, hardly any evidence is available regarding the ability of organizations to link these services on a single platform to enable better employee experiences. Therefore, extant literature is reviewed to understand the elements of experience centric services and propositions are developed and tested. These propositions are tested on internal customers of an organization who are the final beneficiaries of the internal services of the organization. These employees are the final users of the service platform that integrates the services offered by each SSC and provides a holistic Service Experience.

Ideas in Public Management Reform for the 2010s. Digitalization, Value Creation and Involvement

The purpose of this paper is to discuss the three key ideas for an agenda for the public sector that are emerging as dominant ideas in the 2010’s in the literature on public organizations. The paper examines a select number of self-styled conceptual alternatives from the literature on public management to what has been the dominant paradigm in recent years, the New Public Management (NPM). “Self-styled” means that they explicitly present themselves as alternatives to NPM and address the shortcomings in NPM to promote alternative conceptualizations. They include Digital-Era Governance, Public Value Management (PVM), Collaborative Governance, also known to some as the New Public Governance (NPG). The paper takes each of these as broad categories, and proposes that each shelters sub-categories of ideas. DEG: transparency, social media and shared service centers. PVM: strategy-making, performance governance, and innovation and strategic HRM. NPG: networks and collaboration, public-private partnerships and new ways of engaging active citizens. The paper sees these ideas as competing for dominance in the public organization literature as they are new drivers for reforms. Together they form the building blocks of how public management reforms can be build. The paper also recognizes that there are disagreements between them. The paper suggests that these tensions must be addressed if the reform movement is going to be coherent.

A Comprehensive Cost Analysis on New System Structure for Nature-Based Tourism Destination: Perspective of Front and Back Stage Decoupling

To cope with several common problems in nature-based tourism destinations, including resource inefficiency, environmental pollutions and poor service quality, the paper proposes a new structure of service system for tourism destination in which some of the back-stage functions can be decoupled from the service system of individual tourism organizations and integrated into shared service centers and thus the overall scale of the back-stage functions of the destination can be reduced and equivalence of the front–back structure of the destination can be achieved to facilitate the above problems solving. Based on this understanding, a comprehensive costs analysis is conducted to explain the advantages of the new structure over the traditional one by considering three important factors involved in the above problems: the environment, service quality and operation costs. Finally, a case study on rural tourism in China is undertaken to justify this analysis.

Strategy Alignment and Performance Evaluation for Shared Service Centers: A Longitudinal Study on the Role of Balanced Scorecard

Although the SSC concept has gained increasing attention in practice, researchers have not examined the associated issues sufficiently. Through integration in business processes, shared service centers (SSCs) aim to reduce costs and provide better services to internal customers for efficient and effective operations. This longitudinal field study explores how an organization could make existing SSCs more successful. Specifically, we investigate two issues: first, whether using the balanced scorecard (BSC) can assist the employees of SSCs to better understand and achieve the strategies of other operating units as well as those of the headquarters, and second, whether using BSC can better measure the performance of SSCs and reveal the value of SSCs. We illustrate the processes and impacts related to the implementation of BSC on SSCs in a large car dealership in Taiwan. The results show that most employees in SSCs strongly sense and understand organizational strategies after implementing BSC; however, SSCs’ employees do not believe that BSC provides effective performance measures on SSCs. We also find that the managers and employees of SSCs focus more on revenue, cost, and serving internal customers after the implementation of BSC.

Improving the performance of finance and accounting shared service centres

SunGard AvantGard conducted a Market Insight study to gain insight into how companies are implementing and managing Shared Service Centres (SSCs). Centralising payment functions can improve visibility of cash balances while reducing the fees and infrastructure costs needed to support each individual local group, while allowing subsidiaries to have independence on a specified range of operations and processes through supported workflows and controls that are standardised at the company level. The SunGard Insight Study uncovered some concerns when comparing the perceptions of the SSC service levels and capabilities from within the SSC to the businesses, with many business units unhappy with performance while the SSC expressed higher levels of satisfaction. Drivers to create an SSC have shifted – although companies still look toward cost savings and productivity gains, more strategic drivers like increased standardisation have grown in importance. Also indicative of the heightened strategic importance of the SSC is the growing trend toward creating a strategic shared service job title such as global process manager to oversee the creation and implementation of the SSC. This paper reviews the results and potential implications of the study results.

Role of new IT solutions in the future of shared service model

As enterprise services rely on IT solutions on increasingly way, there are more and more signs recently that point to the fact that newer IT trends cut out a growing proportion of the service market. The research is concerned with the business service sector and mainly with the shared service model. It is analyzed how the new IT trends (as a service, cloud computing, etc.) influence business services and what is the future of the shared service centers using these technologies. The research is based mainly on literature review but the Author made ten interviews with Hungarian business service market experts to get answers about the market practice.

Measuring Service Satisfaction in Shared Service Organizations

In the recent decades expansion of the service sector has been continued and nowadays this is one of the most important trend s in the global economy. Within the service sector I am focusing on the business service sector and mostly the segment of shared service centers. Measuring the value of shared services center (SSC) is essential, as it provides the burden of proof. Measurement demonstrates that a case for action resulted in the correct decision; that a strategy has added value to an organization. Since SSC need continually to justify its existence, it will also need to commit itself to the ongoing measurement of its results. It is a typical failure that SSCs focus on costs and budget rather than the most important, client satisfaction. In this theoretical research I collected those methods and practices that are important and useful in measuring of service satisfaction. The research based mainly on literature review but I made ten interviews with Hungarian business service market experts to get their experiences in this topic.

Shared service centres and the role of the finance function

PurposeThe purpose of this paper is: to explore the concept of finance shared service centres (SSCs) through an interpretive case study based on a structuration in organizational fields framework; to explore the implications for the finance function, in terms of how finance both drives change within the multi‐divisional organisation and also is affected by change; and to interpret the SSC phenomenon in the light of the Iron Cage analogy.Design/methodology/approachA structuration in organization fields approach is used to interpret influences and actions in a longitudinal case study of a finance SSC.FindingsThe SSC can be seen as an emergent strategic project. The paper argues that the new organisational form of the SSC, together with the finance function's reflexive and recursive position of driving change are influenced by changes in the economic and institutional influences in the organisational field but in a manner that is both evolutionary and nuanced. A further observation is that management accounting systems are both changed and made stable by the SSC.Research limitations/implicationsThe field work consists of a single case study so as to give a sufficiently deep understanding of how external and internal discourse has influenced the development of a SSC over time.Originality/valueThe paper argues that the unbundling and reconfiguration of support services represents more than simply a rational response to cost reduction and efficiency savings. Indeed, the more fundamental nature of change in the finance function stemming from new structures and processes of the SSC can be understood better once the SSC model has been conceptualised in the context of overall interactions within the multi‐divisional corporation and with its organisational.

Questions and Answers From IRI's Members

Q: Do shared service centers work? Our company is considering moving to a shared service center model for several of our functions. We would like to hear from individuals with experience of shared service centers. What are the pros and cons? How long have their shared service centers been up and running? Would they consider them to be successful? Manager, information technology services company Answers: We have used shared services for Corporate Engineering for around 8 years. Engineering gets their priorities through the stage-gate process or through our capital planning process. Engineers are assigned projects and then put their hours into SAP so they are directly charged out to the appropriate business unit. When resources in engineering aren't sufficient to cover all the needs, engineering fills the gaps with external engineers who also are charged directly to a business via SAP. The biggest advantage is being able to leverage skills and expertise across business units (for example, we have one civil engineer who is shared across the company). In addition, everyone is working off of one set of engineering standards, project management process, drawing and equipment filing system, etc. It's been so successful that we've been rolling out this approach to Research and Development, Quality Assurance, and Analytical Methods Development. We're gradually getting everyone access to SAP and including projects of all types. Linda M. Hicks, Vice-President Corporate Engineering and Technology Vertellus Specialties Inc. In this space, we will occasionally publish queries and answers from IRI's email-based community forum. Questions and responses are selected for completeness, relevance, and interest and edited for format and grammar and to fit the available space. The community forum is available to IRI members via the IRI website; from the home page, select Collaboration Center, then Community Forum. For more information about IRI membership, visit our website. http://www.iriweb.org I manage a shared facilities services organization across four sites. We created this organization in 1999 after working with several consultants and considering all options, such as total outsourcing. With the shared services concept and the use of LEAN methodologies, we continue to drive our overhead cost down. We eliminated many redundancies and used the pay as you need concept. Standardization of procedures, including safety, has proven to be a great benefit. The shared services concept worked so well that it grew into IT, HR, Library Services, and Analytical. Mostly pros, one con; if possible, organize your shared services organization under one group from a headcount standpoint so everyone can be treated the same. Gary Hyek Manager, R&D Facilities Services PPG Q: How do you establish dual career ladders? I am looking at establishing dual career ladders within R&D. I am particularly interested in how the responsibility for managing people on the managerial and managing technology on the technical is made equivalent within the organization. Kathleen O'Leary Havelka, Sr. Director Global Research Dev. & Engineering Diversey, Inc. Answers: To have a viable dual career path in an R&D organization, you need: 1. A similar career structure in the business units of the company or a way for the R&D people's status to be understood and acknowledged by their business unit peers. 2. Job descriptions and rewards that are matched to the skill sets and personality profiles of the most productive types of people on the different paths. This comment comes from the perspective of Hughes Electronics (and Hughes Aircraft). Hughes had a well-established triple career ladder in its business units-line management, technical specialists, and project/ program management. …

A taxonomy of management challenges for developing shared services arrangements

Summary Shared service centres (SSCs) are an organisational arrangement to deliver services. During SSC development organisations encounter a variety of challenges affecting its success or failure. Yet in this embryonic research field a systematic insight into management challenges is absent. Drawing on literature a taxonomy of 15 challenges is suggested that are illustrated with three case studies. Resource dependence, efficiency, population and knowledge perspectives are used as complementary views to provide a deeper understanding. Based on these four perspectives change management has to deal with resource dependencies and power struggles, achieving efficiency by minimising and managing costs, achieving survival in the long run within turbulent organisational environments and finally coordinating knowledge integration. Our results show that the (degree of importance of the) challenges encountered vary per situation. We argue that it is imperative to combine the theoretical perspectives to attain a richer understanding of the situation at hand. Our findings can be used as a solid basis for attaining an elaborate theory for the development of SSCs to mitigate implementation risks by managers.

Shared service centres and management control structure change

PurposeThis paper aims to explore management control structure change related to the development of a shared service centre (SSC).Design/methodology/approachThe paper explores a transaction costs economics perspective (TCE‐perspective) on management control structure change related to the development of an SSC. Particularly, it explores and challenges the scope of such a perspective both in terms of contents (i.e. the nature of management control related to the dimensions of transactions) and process (i.e. the way change is effectuated). It does so by theorizing as well as empirically investigating management control structure change through a case study at PCM (a Dutch newspaper publisher).FindingsThe theoretical analysis broadens existing frameworks of management control structures by particularly pointing to the possibility of including governance structures for internal transactions and exit threats (connected to a market mechanism) in the management control structure of an organization. However, the paper's empirical investigations challenge the broader framework: the possibility of an exit threat was not explicitly considered by top management (“the designer” of management control). More profoundly, empirical investigations challenge the calculative approach of the change and show that the change in management control is to a large extent a drifting process.Research limitations/implicationsAn instrumental calculative approach towards SSC‐related management control change should be complemented with a relational perspective on such change, in order to further explore its drifting character.Practical implicationsA transaction costs economics approach to change in management control might provide practitioners with insights into the efficiency of specific management control structures.Originality/valueThe paper contributes to the extant knowledge by both exploring and challenging a TCE‐perspective on SSC‐related changes in management control.

Exploring the central characteristics of HR shared services: evidence from a critical case study in the Netherlands

Human resource shared service centers (HR SSCs) are foreseen as improving HR service delivery for their end-users: employees, line managers and decentralized HR professionals. Although the concept expects the benefits of HR SSCs to come from centralizing knowledge and decentralizing the control exercised over an HR SSC, research into these two fundamental shared service characteristics is scarce. The purpose of this research is therefore to explore whether resource bundling, combined with business unit control over an HR SSC, is sufficient to improve HR service delivery to its end-users. Using concepts from intellectual capital and agency theory, we find that the combination of these two characteristics of shared services is not sufficient to improve HR service delivery. Rather, we suggest that (1) HR SSCs have to update the knowledge and skills of their staff; (2) end-users have to effectively maintain the codified knowledge centralized in the HR SSC; and (3) business units and the HR SSC need to collaborate in order for the benefits of an HR shared service to be realized.

Shared Services Centre for Client Convenience: A New Perspective in Public Service Delivery. (Evidence from One-Corner-Stock-Shop in Niger State, Nigeria)

Shared Services Centre (SSC) is one of the tenets of Digital-Era Governance (DEG) that integrates information systems for organizations to easily interact with each other sharing activities, processes, services, knowledge, technological infrastructure and best practices without necessarily affecting their autonomy. The Nigeria public sector is yet to make parallel with this basic tenets of DEG in it bureaucratic processes which have advisedly affected it level of service delivery. This paper intends to analyze empirically the motives and other management issues of establishing Niger State One-Corner-Stock-Shop (OCSS). The paper however employed a standalone qualitative case study. The findings revealed that the OCSS is still work in progress into ICT’s potentials that for now creates clients conveniences, enable sustainable ICT infrastructure and enhanced mutual interactions for participating organizations.

The Integration of Information Systems Shared Services Center with E-learning for Sharing Knowledge Capabilities

Continuous learning became a fundamental element in any organization as a tool for managing development, sustainability and innovation from knowledge capabilities. In this paper, we start by describing the combination of two phenomenon’, Shared Service Center (SSC) and E-Learning that expand the knowledge capabilities. Then, we produce a conceptual model for developing a continuous learning organization. This model conceptualizes and integrates SSC as managing the organizational knowledge and memory repository and E-Learning as the enhancer for a pull and push communication process. Then, from the conceptual model, we mathematically deduct a Δ (Delta) factor. This factor presents characteristics that allow its use for determining the viability of the continuous learning from sharing knowledge capabilities.

Shared Service Center

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Exploring and comparing HR shared services in subsidiaries of multinational corporations and indigenous organisations in The Netherlands: a strategic response analysis

Human resource shared service centres (HR SSCs) are said to make optimal use of information technologies. Especially for MNCs, utilising HR SSCs supported by information technology increases the pressure to standardise or localise the HR SSC operations within their subsidiaries. In this paper, we explore whether what we call the content of HR SSCs (i.e. their HR activities and governance structures) is different in MNC subsidiaries to that of indigenous organisations. In so doing, we build on neo-institutional theory and the strategic response concept for uncovering how HR SSCs respond to local institutional pressures to become different or similar. As such, we contribute to the standardisation-localisation debate by responding to the call for more research into the response mechanisms that explain why MNC subsidiaries and indigenous organisations are similar or different. Further, by exploring eighteen Dutch HR SSCs in terms of their activities and governance structures, we contribute to the HR shared services literature by empirically illuminating the key characteristics of shared services: the centralisation of activities and the decentralisation of control.

How Employee Perceptions of HRM Develop: Employees as Co-Creators of HR Shared Service Value

An increasing number of organizations are making use of the HR shared services model for providing HRM practices such as personnel administration, training and development services. The majority utilizes the shared services model because of expectations such as cost reductions, quality improvement and a more strategic influence of HRM. However, to reap these benefits and ensure the success of the HR shared services model, HR shared service centers first have to create high-level value for employees. However, the existing research provides little insight into the creation of HR shared services value. Although some studies have examined the features of HR shared service centers as possible antecedents, there are few that examine how value develops at the employee level. In this article, we seek to provide a better understanding of this. We base our ideas on the service-dominant logic by reasoning that employees are the consumers of HRM, and thus they co-create value out of the HRM practices provided. By regarding them as HRM customers, we build hypotheses around the notion that the human capital of employees, being developed through the use of HRM practices, enables them to co-produce and utilize HRM practices better and so increase their perceptions of HR shared services value. To test these hypotheses, we utilize survey data obtained from a sample of 2,002 employees from 19 organizations.

Determinants of central control and subsidiary autonomy in HRM: the case of foreign‐owned multinational companies in Spain

This article examines the factors affecting HRM subsidiary autonomy within multinational companies (MNCs). Drawing on institutional theory arguments, along with an analysis of the impact of international HRM structures, it attempts to identify the multiplicity of factors influencing subsidiary autonomy with regard to HRM. Using data gathered from a highly representative survey of foreign MNC subsidiaries located in Spain, the results identify a number of factors that hold explanatory power. First, the distance between the home and the host country in terms of variety of capitalism is crucial in explaining variations in subsidiary autonomy. In addition, international HR structures, such as the existence of an international policy‐making body and the use of HR shared service centres or HR data reporting mechanisms, are also important in accounting for the degree of autonomy over HR issues experienced by the MNC subsidiaries in our study.

The Comparison of the Trends in Services Provided Worldwide with the Trends in Slovakia

Abstract The author highlights the services from the perspective of the service providers and clients. Furthermore, the author discusses the issues raised to the centers of support services and the criteria according to which a multinational corporation makes a decision about destinations where their centers should be located. The author deals with the current trends of the international service providers, who established shared services centers in Slovakia. The benefits that Slovakia offers, such as convenient location, low labor costs or low tax burden in recent years are the main criteria that attract foreign companies to establish their services support centers in Slovakia. Multinational corporations, mainly focus on the outsourcing of accounting and financial services, customer service covering the entire region as well as IT services.

Who moved my shared service centre?

In a search for an optimized global business service operation, firms set up and relocate shared service centres around the globe. This teaching case examines the migration process of IBM procurement shared service centre from Budapest to Sofia. The teaching case describes the challenges that the teams in Budapest and Sofia faced and the migration methodology applied and later on adapted in order to meet the transition objectives. The teaching case concludes by challenging IBM's migration approach.