SHARED SERVICES ORGANISATION: A CULTURE THAT FOSTERS GROWTH, EFFICIENCY AND SUSTAINABLE VALUE CREATION
In today’s competitive environment corporates are under tremendous pressure to explore ways
and means to operate their support functions more efficiently at lower cost while maintaining high
standard of controls and compliances. This article explains as how a shared services organisation
(SSO) model is helpful in achieving this objective. Further, it provides an understanding of the SSO
concept, it’s key benefits and critical steps of implementation.
WHAT IS SSO
During mid-nineties internet availability killed the distance between two locations and people realised that it can change the way they work. Because of internet connectivity it became possible for organisations to move their work to another low-cost location and improve the overall profitability. Thus, the concept of moving common processes used across various business units to a common location came into vogue. Organisations started focusing on their core business while their support functions are either outsourced or managed by internal SSO.
In an SSO model, support functions and related resources (people and technology) are centralised for all business units under one roof unlike the conventional model where each business unit has its own independent business processes and resources.
SSO is to consolidate various business processes that are used by multiple business units of the same corporation with an objective to gain operational efficiency by continuous improvement and standardization of these business processes. It also enables higher value service delivery to the internal customers at reduced costs while maintaining the highest standard of process controls and compliances.
During last two decades the SSO concept has become very popular and many MNC’s and domestic companies have established this model. Acceptability of this model among Indian companies is increasing day by day as they have realised that SSO can play an important role in improving efficiency, productivity and overall growth.
DIFFERENCE BETWEEN SSO AND BPO
Shared services organisation and business process outsourcing (BPO) are different concept although they are often confused.
SSO is fully in-house or captive shared services model which is clearly aligned with company’s business objective, ethics and work culture. On the other hand, BPO is a concept where third party vendors provide services to the corporation.
KEY BENEFITS OF SSO
- Process Standardisation: In SSO, the processes followed by different business units across the organisation get migrated under one roof and reviewed extensively to ensure that they get standardised over a period of time.
- Unified IT Systems and Controls: Application of unified IT systems and controls across all business processes helps in the process automation/ service excellence.
- Cost Reduction: Elimination of duplicate efforts and processes in silos helps in reducing the operational cost. Standard business processes across single organizational ways helps in optimizing head counts, enables economies of scale and improved service delivery.
- Better compliances and decision making: Centralised data base eases out periodical corporate reporting, data analysis and decision making and also provides directions to improve compliances.
- Improved productivity: Standardisation of processes and culture of continuous process improvements helps in enhancing productivity.
- Cohesive work environment: sharing of learning experience under one roof helps in improving the knowledge and skills of the team and creates a
cohesive work environment.
- Greater flexibility: It brings flexibility to handle different scales of transactions volume during ups and down in the business and while dealing with