Shared Service Center Research Articles

Specific Business Models for Romanian Companies - Shared Services

Shared service centers have emerged since the 1990s and refer to a variety of functions: information technology, SAP support, accounting, payroll, management reporting, purchasing, call centers, help lines, market surveys via phone or the internet. Shared service units can be organized in several forms but are in each case a particular value pattern distinct from the standard market price/ shareholder profit pattern. The purpose of this article is to analyze value patterns, and this article is part of a wider research on value based management. Shared service units can be organized according to the organizational design of the matrix organization, or according to the multidimensional organization. Shared service units may be charged via a transfer price system to the receiving corporate related company. These are iterative activities, organized according to the activity based costing logic. Alternatively, shared services can refer to more complex functions that provide service to corporate functions, and can be organized according to the multidimensional organization logic as allocations to the operating units. The value proposition of shared service units differs from market price and profit driven financial statements. Shared service units require low personnel cost and stability, both of which indicate to Romania as a favorable location. These are the two arguments in favor of shared services as a specific model for Romanian companies, a country in which we find evidence shared services have been set up in the past ten years as parts of corporations.

Demographic preferences towards careers in shared service centers: A factor analysis

Talent attraction and employee retention are some of the main challenges that currently affect the growth of the shared service industry worldwide. Due to the market dynamics and the structure of the labor force, shared service centers (SSCs) in the region compete to attract well-trained candidates with appropriate knowledge and skills. To assess gender preferences towards careers in the SSCs, the article collects 1283 responses using an online questionnaire from university students in the Czech Republic. Respondents vary by study year, gender, age, course of study, and work preferences. The article analyzes gender and age preferences towards careers in the shared services. The article further ascertains the main factors that influence career decisions using the same demographic features. Using the factor analysis technique, the article further analyzes the variables with strong inter-correlations to evaluate the formation of preferences in SSCs. The research results provide insights into the target age and gender of students with job aspirations in SSCs. The findings could help recruitment agencies renew and redirect their search for talents in SSCs.

Evolution of a service ecosystem: Longitudinal evidence from multiple shared services centers based on the economies of worth framework

This article proposes a theoretical model of the evolution of a service ecosystem by relying on the longitudinal analysis of the relationships between five shared services centers (SSCs) and their internal clients. Based on the economies of worth framework (Boltanski & Thévenot, 2006), we find that after the introduction of a service platform, service ecosystems evolve and alternate between phases of tensions and phases of solutions where each new agreement between the actors of the service ecosystem becomes increasingly stable. Throughout these phases, the actors of the service ecosystem switch from a goods-dominant logic to a transitional logic and finally to a service-dominant logic. The actors of the service ecosystem are initially oriented towards dyadic-dominant relationships, but later move to triadic-dominant relationships, until all the actors of the complex network directly or indirectly interact with one another.

Mudança e Teoria Ator-Rede: Humanos e Não Humanos em Controvérsias na Implementação de um Centro de Serviços Compartilhados

Resumo Em uma ontologia de fluxo, a realidade é mudança, ao passo que as organizações formais são tentativas de organização desse fluxo, a partir do trabalho de estabilização de controvérsias sob a ótica da Actor-Network Theory (ANT). Considerando essa abordagem, na qual o social é um coletivo de humanos e não humanos em redes, este estudo visa a compreender como ocorre a agência de não humanos e humanos, bem como a agência de sua associação, em processos de mudança de foco não tecnológico. Para tanto, adotou-se o estudo de caso qualitativo longitudinal, conduzido de abril de 2011 a julho de 2012, na Empresa X, uma prestadora de serviços públicos do Estado de São Paulo, onde ocorria a implementação de um Centro de Serviços Compartilhados (CSC). Para a construção dos dados, empregaram-se observação participante, grupos de foco, entrevistas, documentos e audiovisuais, visando à multivocalidade. Mediante a cartografia de controvérsias, com o apoio de programas de redes dinâmicas, quadros e mapas mentais, descreve-se a implementação do CSC, em três escalas, de diferentes amplitudes, considerando-se dezessete anos da Empresa X. As controvérsias foram mapeadas segundo temas, argumentos, actantes e suas posições assumidas, sublinhando-se a agência de não humanos que atuaram na qualidade de mediadores. Das 40 controvérsias mais significativas, apenas 13 transformaram-se em caixas-pretas, levando o CSC a não ser pontualizado no fim da pesquisa. As principais contribuições do estudo dizem respeito à problematização do controle em processos de mudança, geralmente tomados pelas empresas como mudanças episódicas planejadas, bem como à metodologia para abordar a tentativa de organização do processo contínuo de mudança que constitui as organizações.

Organizational Size and Operation Scope in Company of Using Shared Service Model

It is clear that the benefits of shared service model used by many international companies could be exploited only at a certain company size because the cost advantages are highly dependent on the economy of scale. According to SunGard global research from 2010 54% of companies with shared service centers have the annual gross turnover of a billion dollars or above. The reason for this is mainly the larger a company is, the greater the likelihood that use different enterprise level systems and non-standardized processes. After all, the model benefits not only be achieved through the utilization of large volumes, but removing the redundancies. In this research, 75% of companies had global presence and 89% of them already had or planned to set up a shared service center. The global function has also an advantage, because it can handle larger transaction volumes and reduced by the model of costly duplicate transaction processing efforts. The global service environment allows the introduction of global standards and uniform access to global information scattered in different subsidiaries. In this part of my research I am focusing on the Hungarian business service sector. I made a broad empirical research with online questionnaires to analyze the shared service centers in the Hungarian shared service market and to discover the organizational characteristics of them and their parent companies.

Trust and Control in Network Relations: A Study of a Public Sector Setting

AbstractThis study contributes to the literature by addressing the role of trust and control in public sector settings in which several organizations cooperate; its aim is to advance the understanding of trust and control in relations in which several parties are involved. The empirical study presented is a longitudinal case study of the relationships between organizational units within a municipality and a shared service center (SSC) that provides IT and administrative services. The main finding is that, compared to actors in previous studies of dyadic relationships in the private sector, actors in network relations seem to consider trust a risky option. It is less tempting to rely on a certain party when that party in turn is entangled with other parties. This situation causes a more intensive use of formal control. Another result is that increased trust between two parties might lead to more emphasis on formal control by a third party.

Challenges of control in functional organization structures:Example of outsourcing sector

IntroductionOutsourcing sector is dynamically developing in Poland. The growth of investments in outsourcing sector has become significant with the entrance of Poland the European Union. Nowadays, average increase of employment in this sector in Poland reaches 20% year over year. Poland is a leader in modem business services sector in Eastern and Central Europe [www 1]. As the international business services are still relatively new and the phenomenon in Poland remains not fully explored, the literature and research related this type of operational restructuring are not extensive. The author is trying assess challenges of internal control in international outsourcing companies during restructuring phase. Usually, the companies apply functional organization structure [Kroon 2004, p. 223] with managers located abroad or employees working remotely. There are many factors related control, starting by the change of organization structure that should be taken under consideration in the decision processes.The literature treats widely the aspects of challenges related implementation of outsourcing strategies. Many authors underline the need of control and its importance in implementation of outsourcing. Possible risks are described on general level as potential cons of outsourcing. The studies on how adapt the control systems new reality and what experiences related control managers may have in transforming businesses are missing and have been identified as a research problem by the author. The goal of the paper is show the challenges the company may face in the area of control while taking a decision of outsourcing selected part of the business. This kind of operational restructuring entails significant changes in the organizational structure of the company. The author refers functional organization structure which is most commonly applied. The aspect of globalization has been taken into consideration as well.The article consists of three chapters and conclusions section. The first chapter presents review of literature in the field of outsourcing and control. This chapter presents control as a key management function with focus on control in outsourcing and describes the transformations in organizational structures of the company while applying outsourcing strategy. The next chapter describes the research methodology and phases of studies conducted. The third chapter relates research findings and summarizes the challenges a company may face while taking decision outsource selected activities with distinction of outsourcing external partner and creation of shared service center within a capital group.1.Literature review1.1. Control as a key management functionThe research concept is based on literature studies as well as empirical analysis of selected companies from business service centers sector. The term control has broad meaning and is one of the most important ones in the management sciences. In its results, a company can see its past and rough the future out [Kuc 2009, p. 18]. Cambridge dictionary presents verb control as to order, limit or rule something, or someone's actions or behavior [www 2]. The word control, coming from British and French tradition, was primarily used assess legislation pieces. Currently, internal control is a key element of any organization [Wojciechowska 2015]. There are multiple definitions, but interpretation of Koontz and O'Donnell is valid despite the time, the object and the subject of control. According the authors the process of control consists of three steps:- set up norms,- compare results norms,- correct deviations.To ensure efficiency of control, it is crucial correct deviations timely and apply appropriate tools avoid these deviations in the future [Fayol 1926, p. 6]. Nowadays, many authors (i.e. Webber, Goetz, Kurnal) underline the need of anticipation in the process of control ensure corrections can still be made. …

Study on Optimization of Financial Sharing Service Center

The development of the information age promotes the upgrading of the financial management mode. As a new type of financial management mode, the Financial Sharing Center has been gradually applied and developed in the practical management of the enterprise. This paper reviews the development and existing problems of the Financial Shared Services Center at the level of theory and practice. Then according to the needle for the status of the group company, the article proposed the optimization method of financial shared services model of the group company.

Strategies for leading IT-enabled change: lessons from a global transformation case

Purpose – The aim of this article is to provide strategic insights of how multinational organizations lead IT-enabled change on a global scale. The article summarizes the findings from a three-year case study of the international telecom company Ericsson. This company managed to successfully transform their finance and accounting (F & A) unit from a highly decentralized structure into a so-called shared service center (SSC) structure and the whole change was enabled by enterprise resource planning (ERP) system. Design/methodology/approach – The case study data consists of in-depth interviews, archival data, and observations collected during three years. Findings – The article provides rich description of how the transformation was executed together with three key strategic lessons. Originality/value – The article offers unique and novel insights of how strategist drives IT-enabled change on a global scale.

Paradoxical puzzles of control and circuits of power

Purpose– This paper aims to clarify a paradox in an organisation: in the past, formally powerful “central” actors confronted important limitations in their relations with formally less powerful actors. However, three innovations – the financial accounting module of an enterprise resource planning (ERP) system, a corporate centre (CC) and a shared services centre (SSC) – substantially changed and re-centred network power relations. The authors adopt a critical discourse to explain this paradox, contributing to the emerging literature on SSCs and bridging the management control and power literatures.Design/methodology/approach– An in-depth, processual, actor-network theory-inspired three-year case study of a large Portuguese manufacturer.Findings– As the intertwined accounting-related innovations were (re)mobilised by actors, dynamically adjusting to unfolding repercussions, control and power effects emerged, enabling enhanced organisational steering.Research limitations/implications– Based on a single case, this paper highlights effects of managerial technologies, in particular ERPs and SSCs, on control and power relations, and refines Clegg’s model for future research.Practical implications– The transactional, low value-added activities typically performed by SSCs should not lead to underestimating their potentially profound organisational consequences. However, the surrounding socio-technical network is decisive for the emerging, inter-related repercussions.Originality/value– This paper explains the relative capacity of actors to influence the practices and configuration of the organisational network structurally, fixing power relations within the socio-technical network through innovations in the accounting area, in particular ERPs and SSCs. By revising Clegg’s circuits of power framework, this paper contributes to understanding possibilities and limits of accounting techniques in management control procedures.

The Right Strategy? Examining the Business Partner Model's Functionality for Resolving Human Resource Management Tensions and Discussing Alternative Directions

A large number of organizations restructured their Human Resource Management (HRM) departments according to their interpretation of Ulrich's (1997) business partner model into strategic business partners, centers of expertise and shared service centers. I argue that this approach could gain widespread acceptance in organizational practice because of its functionality in addressing tensions inherent in HRM. I relate to paradox research and categorize contradictory HRM demands into tensions of (1) identity, (2) learning, (3) performing and (4) organizing. The implementation of the business partner model resolves these tensions in the short-term by addressing the opposing forces separately. Yet, these resolution strategies are not sustainable and threaten the long-term impact of HRM. I discuss the shortcomings of the business partner model and explore how organizational actors can reframe HRM work to embrace the multifaceted nature of HRM.

Investment Promotion Regime and Tax Benefits of Shared Service Centres

A 2014 Decree has provided for tax benefits for shared service centres in addition to the benefits already available under the general investment promotion regime.

Creating shared service centres for public sector accounting

Purpose– The purpose of this paper is twofold. First, it aims to contribute to the theoretical discussion on shared service centres (SSCs) for public sector accounting by putting forth a novel typology of different SSCs and their creation modes, and outlining the challenges these specific models are likely to face. Second, it uses the Estonian case study to test the theoretical conjectures.Design/methodology/approach– Since in the Estonian central government different reform models for creating SSCs for public sector accounting have been tried out, the Estonian case offers an opportunity for exploring what the motives behind the creation of different forms of SSCs can be and what kind of challenges reform actors can face when opting for different reform models. The sources of data for the qualitative case study included official documents, media articles and interviews.Findings– The Estonian case study demonstrates that the distinct reform models for creating SSCs in public sector accounting can indeed have different motives and also face various challenges to different degrees. Some challenges, however, are present in all reform models (e.g. difficulties in achieving customer orientation and reduced input to managerial decision making).Originality/value– This paper puts forth a novel typology of public sector SSC reform models and analyses the challenges these different reform models are likely to face. The theoretical contribution and the Estonian case study are valuable for both academics and practitioners analysing or considering the creation of SSCs.

The devolution of the human resources function in South African multinational companies

Understanding how multinationals devolve decision-making within their human resources (HR) function to their subsidiaries in Africa is becoming increasingly important as the continent grows in significance in the global economy. The research examines the extent of HR devolution by South African multinational companies; how it is affected by the availability of capacity, skills and resources and the role that distance plays in this devolution. Qualitative research was conducted involving 13 South African multinationals operating in eight industries and multiple countries. We find that South African multinationals primarily devolve transactional functions to their foreign subsidiaries while retaining control of transformational ones. However, this appears to be in transition, with transactional items increasingly outsourced to third parties or in-sourced to shared service centres or employee self-service. Certain transformational items were gradually being moved to the subsidiaries, subject to skills and resource availability, along with the employment of more skilled HR professionals and the establishment of Centres of Excellence at headquarters (HQ). As regards the dimensions of distance, we find that the impact of geographic distance was minimized, but the greater the cultural, economic and administrative distance between HQ and the foreign subsidiary the greater the devolution of functions down to the subsidiary.

Incentive Pricing of Shared Services with Normal Distribution of Order Flow

Abstract This paper presents simple yet efficient formula for apportionment of cost generated by the variability of flow of requirements (objects, inventory, money) through the shared service center (distribution center, internal bank, some service center) as well as formula for apportionment of the cost generated by the flow, if it were steady. The presented formula assures that shared service center cost are charged fairly and provide incentive for the shared services center counterparts to optimize timing and size of their requirements towards shared services center and minimize the total cost of handling them. Additionally we challenge the marginalist transfer pricing theory.

Empirical research about IT shared service centers in Hungary

In Hungary the two most important service areas in the business service centers are the information technologies and the finance. Nowadays there is more and more information technologies service centers that deliver services for internal or external corporate partners as an outsourcing or a shared service center. However it is a robust trend in the Hungarian information technologies sector in the last two decades that these companies employ the most newly graduates of higher education but there are very few information about these centers. For example not only the growing headcount is important but these service centers are typically affiliates of big global companies that use new information technologies solutions as well. This research tries to get an overall picture about the players of information technologies business service sector in Hungary. Due to a comprehensive questionnaire and the research is based on the answers of 27 information technologies service centers on its strategic and operational work.

Where is My Pay? Critical Success Factors of a Payroll System – A System Life Cycle Approach

Majority of firms deploy technologies in HR administrative applications. While payroll processing is a routine transactional activity, poor design and implementation of payroll system can cause immense harm to employee and organizational well-being. Based on the case study of a flawed payroll system in a large and complex public sector organization in Australia, we highlight the key success factors using the system life cycle approach underpinned by the agile philosophy. It highlights the critical importance of strategic organizational review, user involvement and ongoing communication with diverse stakeholders during the planning, analysis, design, implementation and review stages of a payroll project. It reinforces the need for the adoption of and adherence to sound project and change management methodologies. We also explore the limitations of shared service center approach.

Shared Service Center Factors and Return on Investment

Many businesses today face enormous competition on both national and international levels. Companies are increasingly looking for realizing the benefits of shared service centers. A new way of organizing back office functions is being implemented across companies worldwide. This novelty called shared services has taken over as the most discussed topic in the last fifteen years and it is likely to stay with us for some time to come. It is advisable to explore a shared service center and to find out its benefits. Research methodology was a single case study and literature analysis. The shared service center conception enables the understanding of main focused areas to be taken in the consideration before migrating main business operations. A clear view has to be given to either outsourcing operations or establishing a shared service center. Prime targets depend of corporate objectives, risk assessment, and potential return on investment (ROI). ROI was calculated based on authentic shared service center figures. Bergeron (2003) presents a different way to calculate ROI. He notes that return can be taken as a profit or income figure. And that makes sense as at the beginning of implementation a shared service center works with none or small level of profit. Research has shown the evidence about the importance of the main factors that influence the choice to establish a shared service center. And the research has not agreed with the theoretical argument that the reduction of cost is the most important driver before establishing a shared service center as there are many more not less important drivers for a shared service center creation. The main keys to success regarding the shared service center ‘X’ evidence, in order of importance, are increased business value, cost savings, controls and continuity, customer service, and high quality. DOI: http://dx.doi.org/10.5755/j01.ss.83.1.6866

Framing shared services

During the last decade there has been an increase in the use of horizontal organizational relationships (HORs) such as strategic alliances, shared services, and outsourcing. Studies accentuate the unstable, fragile nature of HORS and the importance of directing attention to how these arrangements are formed and how and why they change. The aim in this study is to explore control problems of HORs and to discuss how different problems are related to accounting and control initiatives. A theoretical framework with the core concepts of framing and overflow is used as a theoretical point of departure. The empirical study is a longitudinal case study of the organization of a shared service center. In this study, we observe the problems of risk and coordination often discussed in the literature. However, guided by our theoretical framework, we also observe how many problems were formative and related to the forming of actors, relations and products. This study adds to the literature by conceptualizing how accounting and control not only functioned as framing devices, but also became sources of overflows, causing destabilization. Following the conceptual framework, we observe how overflow was caused both through reconnecting what had previously been separated and through cutting off relations in the process of disentangling the HOR. (C) 2014 Elsevier Ltd. All rights reserved. (Less)

The Temporal, Cost and Quality Aspects of HR SSC and HRO Operations in Poland

This paper characterises the dynamically developing sector of modern business services in Poland, focusing particularly on HR Shared Service Centres (HR SSCs) and HR Outsourcing (HROs). The temporal, cost-related, and quality-related aspects of HR SSCs’ and HROs’ operations in Poland are presented, distinguishing the exogenic and endogenic conditioning of their competitiveness. Moreover, the scope of HR SSCs’ operations in Poland is described. Four research hypotheses were formulated for the purpose of the study and were verified by means of the main research method, which is the analysis and critical assessment of the available subject literature and industry reports.