The concept of shared services is not new. Advances in technology and telecommunications have enabled companies consolidate administrative and financial activities across multiple geographical boundaries since the 1980's. The centralisation of these activities allowed companies standardise on best-in-class operating models. Employing specialist staff with key skills and driving through process automation generated significant cost savings. This strategy typically applied to back office and / or non-core activities.
The evolution of the shared services centre continues to challenge today's executives. The promise of low cost offshore alternatives seems to question their future, but at PricewaterhouseCoopers we believe that shared services are a continuously evolving concept. The first generation of shared service entities has only set the scene, the next generation need to:
- Consider further capacity to manage new territories.
- Consolidate existing shared service centres.
- Target activities further up the value chain such as supply chain and human resource management.
Companies engaging in the discussion regarding the set-up of shared service centres need to be aware of the risks and benefits associated with centralising and standardising. They also need to recognise that shared services are not just about the consolidation of transaction processing activities, but now, more than ever, must support and enable the implementation of corporate strategy. Shared service centres must be proactive and innovative in developing opportunities for further cost savings and providing intuitive reporting capable of driving strategic initiatives.
At PricewaterhouseCoopers, we advise our clients on the key elements of establishing shared service centres:
- Preparation of the business case
- Transition planning
- Transition preparation
- Migration and go live
- Ongoing operations
