Point of view*
Shared Service Center - the 2nd Generation
Taking the next step to reach a more efficient level of evolution.
Shared Service Center - the 2nd Generation
Improving
business
through
sourcing and individual responsibility
Shared Service
Center
- the intelligent
2nd Generation
Improving business through intelligent sourcing and individual responsibility
The challenge
The challenge
The challenge
Shared
Center (SSC)
(SSC) are
are internal
internalservice
serviceproviders
providerswhich
whichbundle
bundle
Shared Service
Service Center
competencies
andprovide
providestandardized
standardizedservices
services
different
business
competencies and
forfor
different
business
divisions
Shared Service Center
(SSC) areThe
internal
service
which bundle
divisions
the company.
main
goal ofproviders
implementing
shared
within thewithin
company.
The main goal
of
implementing
shared services
is toservices
competencies
provide
standardized
servicesat
for different
business
divisions
is
to achieve
aand
higher
level
of service
lower
cost
level.
This
has
achieve
a higher
level of
service
qualityquality
at a lowera cost
level.
This
has
prompted
within the company. The main goal of implementing shared services is to
prompted
companies
in variousand
industries
and
different
countries
to move
companies
in
various
industries
different
countries
to
move
towards
shared
achieve a higher level of service quality at a lower cost level. This has prompted
towards
shared
services
in the
recent
years.
Butbenefits
leveraging
their
services
in in
the
recent
years.
But
leveraging
their
in the
longbenefits
run
companies
various
industries
and
different
countries
to move
towards
shared in the
long
run
requires
more
than
just
a
one-off
effort.
Companies
which
requires
more
than
just
a
one-off
effort.
Companies
which
have
already
services in the recent years. But leveraging their benefits in the long run have already
established
aa than
SSC
are
with
a anumber
ofof
challenges
(Figure
1).1).
established
SSCjust
areaconfronted
confronted
with
number
challenges
(Figure
requires more
one-off effort.
Companies
which
have already
established a SSC are confronted with a number of challenges (Figure 1).
Company
Internal and external
challenges
Internal
and external
challenges
Company
• Corporate strategy
Competition
and cost
•• Corporate
strategy
pressure and cost
• Competition
• Improvements
in technology
pressure
Cost development
of
•• Improvements
in technology
locations
• Cost
development of
locations in legal regulations
• Changes
•• Changes
in legal regulations
Labor turnover
•• Labor
turnover
M&A activities
•• M&A
activities
Organic
growth
• Organic growth
Service
Service
requirements
requirements
Business
Business
units
units
Service delivery
Service
delivery
(according
to service
(according levels)
to service
levels)
SCC
SCC
Figure 1: Challenges for companies
Figure 1: Challenges for
Figure
for companies
companies
to overcome
overcome
these
challenges
and
generate
sustainable
benefits,
In
overcomethese
these
challenges
and
generate
sustainable
benefits,
In order
order to
challenges
and
generate
sustainable
benefits,
a a a
to
constantly
review
the
services
it
provides,
including
the
service
SSC
needs
to
constantly
review
the
services
it
provides,
including
the
SSC needs to constantly review the services it provides, including the serviceservice
2),as
aswell
wellas
organization.
levels
(Figure 2),
2),
as
well
astheir
theirorganization.
organization.
levels (Figure
Finance
Finance
Accounts
• Accounts
payable
payable
• Accounts
Accounts
receivable
receivable
• Credit
Credit and
and
collections
collections
•• Financial
Financial
reporting
reporting
•• Fixed
Fixed asset
asset
accounting
accounting
• General
• General
ledger
ledger
• Inter• company
Intercompany
reporting
reporting
• Planning and
• forecasting
Planning and
Procurement
Procurement
Administrative
• • Administrative
procurement
procurement
• • Contract
Contract
management
management
• • Logistic
Logisticand
and
goods
goods
management
management
• • Purchase
Purchase
Order
Order
processing
processing
• Supplier
• Supplier
management
Sales
HRHR
IT IT
Sales
• Billing
• Application • Billing
Applicant
data • Application
• •Applicant
data
development • Complaint
administration development
administration
• Complaint
• Hosting
• •Payroll
management
• Hosting
management
Payroll
of of• Customer
• Operating
• •Personnel
Personnel
• Customer
• Operating
datadata
data
service
data
service
administration
processing • Order
administration processing
• Order
center,
datadata
• •Travel
management
center,
management
Travel
collection
and and•
accounting
collection
Technical
accounting
•
Technical
datadata
filingfiling
support
support
• User help
• User help
desk
desk
management
forecasting
Figure 2: Examples of Shared Service Center offerings
Figure
offerings
Figure 2:
2:Examples
ExamplesofofShared
SharedService
Servicecentre
Center
offerings
To ensure
ensure aa long-term
value,
thethe
SSC
needs
to anticipate
changes
in
To
long-termadded
added
value,
SSC
needs
to anticipate
changes
in
To
ensure a long-term
addedtovalue,
the
needs
to anticipate
requirements
and
adjust
its SSC
service
portfolio
in an in
effective
and in and
requirements
andfurthermore
furthermore
to
adjust
its service
portfolio
anchanges
effective
requirements
efficient way.
efficient
way. and furthermore to adjust its service portfolio in an effective and
efficient way.
This point of view aims to present adequate solutions to face these challenges.
This point of view aims to present adequate solutions to face these challenges.
This point of view aims to present adequate solutions to face these challenges.
1
2
Design
and
Design
andand
implementation
Design
ofimplementation
a Shared Service Centre
of a
implementation of a
Shared Service Center
Shared Service Center
Companies state two major reasons for implementing a SSC:
Companies
state two
two major
major reasons
reasons for
Companies state
for implementing
implementing aa SSC:
SSC:
1. Increase of quality
1.
Increase of quality
• Standardization
and optimization of
• Standardization
and optimization of
processes
• processes
Improvement of services
• Improvement of services
2. Reduction of operating costs
2.
Reduction
of operating
• Human
resources
costscosts
•• Human
resources
costs
Infrastructure costs
• Infrastructure costs
The first
first step
step towards
SSC
isistotodetermine
which
services
shall
The
towardsimplementing
implementingaaaSSC
SSCis
determine
which
services
shall
The
first step Generally,
towards implementing
to determine
which
services shall
be
provided.
all
transactional
processes
which
can
be
standardized
be
provided. Generally,
Generally, all
all transactional
transactionalprocesses
processes whichcan
canbebe
standardized
be
standardized
areprovided.
suitable for a migration
into a SSC. The secondwhich
step is to conduct
an
are
suitable
for
a
migration
into
a
SSC.
The
second
step
is
to
conduct
an
are
suitable
for a migration
a SSC.
Theshould
secondbestep
is to conduct
analysis
to determine
whichinto
process
steps
performed
by thean
SSC and
analysis
to
determine
which
process
steps
should
be
performed
by
the
SSC
analysis
to determine
which processSSCs
steps are
should
performed
by the units
SSC
and
which should
remain decentralized.
oftenbeseparate
business
with
and
which
should
remain
decentralized.
SSCs
are
often
separate
business
units
which
remain decentralized.
SSCs
are often
separate
business
units
with
an ownshould
organizational
and operational
structure.
Therefore
the
SSC may
even
with
an
own
organizational
and
operational
structure.
Therefore
the
SSC
may
an
own to
organizational
and operational
Therefore
theprovider.
SSC may even
decide
transfer selected
processes structure.
to an external
service
even
decide
to transfer
selected
processes
to an external
provider.
decide
to transfer
selected
processes
to an external
serviceservice
provider.
Company
Company
Business
units
Business
units
• Accounts payable
receivable
• Accounts payable
Financial reporting
• Accounts
receivable
Fixed asset
accounting
• Financial
reporting
••Payroll
Fixed asset accounting
• ...
•Payroll
• ...
Services and
communication
Services and
communication
• Feedback
Requirements
• Feedback
• Requirements
SCC
SCC
Organizational structure
Organizational structure
Processes
Processes
IT-infrastructure
IT-infrastructure
Workflow-management
Workflow-management
Control and monitoring
system
Control and
monitoring
system
External
External
service
provider
service provider
Selective
Outsourcing
Selective
Outsourcing
Documentscanning
Documentscanning
Payroll
Payroll
Figure 3: Organizational set-up of a Shared Service Center
Figure 3: Organizational set-up of a Shared Service Center
Figure 3: organisational set-up of a Shared Service centre
In order to deliver the services defined in service level agreements (SLAs), it is
In
order to
totodeliver
deliver
the services
services
defined
inservice
servicelevel
level
agreements
(SLAs),it itisis
the
defined
(SLAs),
essential
implement
an adequate
IT in
infrastructure,
aagreements
workflow
management
to
implement
an
adequate
IT
infrastructure,
a
workflow
management
essential
to
implement
an
adequate
IT
infrastructure,
a
workflow
management
system and an information management system. Focusing on these major
system
and
management
system.
Focusing
onon
these
major
and an
an information
information
management
system.
Focusing
these
major
implementation
issues ensures
that all services
and
communications
provided
implementation
issues
ensures
that
all
services
and
communications
provided
implementation
issues
ensures
all services and communications
provided
are performed via
clearly
definedthat
interfaces.
are performed
performed via
are
via clearly
clearly defined
definedinterfaces.
interfaces.
Problems of existing
Problems
of existing
Shared
Serviceofcentre
Problems
existing
Shared Service Center
Shared Service Center
2
Requirements will change over time which often leads to a compromise in the
Requirements
willobjectives.
change over
time which
often leads
to a compromise
in in
the
quality
and cost
Increasing
transaction
volumes
or changes
Requirements
change over
time which
often leads
to a compromise
in the
thethe
quality and costwill
objectives.
Increasing
transaction
volumes
or changes in
scope
of
service,
for example,
can result
in increasing
costs changes
per unit or
a
quality
and
cost objectives.
Increasing
transaction
volumes
in to
the
scope of
service,
for example,
can result
in increasing
costsorper
unit or to
a
decrease
in quality
the organizational
structure
andcosts
processes
areornot
scope
of service,
forififexample,
can resultstructure
in increasing
per unit
toflexible
aflexible
decrease
in quality
the organizational
and processes
are not
enough.
This
quality
loss
in
turn
could
entail
increases
in:
decrease
in
quality
if
the
organizational
structure
and
processes
are
not
flexible
enough. This quality loss in turn could entail increases in:
enough.
This time,
quality
•processing
time, loss in turn could entail increases in:
• processing
processing
time,
••system
• system downtime,
downtime,
downtime,
•• system
error rates,
and
•error
and
and
•• error
costsrates,
per
•costs
per unit.
unit.
• costs per unit.
Furthermore, SSC optimization often focuses only on narrowly defined service
Furthermore, SSC optimization often focuses only on narrowly defined service
requirements.
changes
tothese
these
requirements
occur,
processes
have
Furthermore,
optimization
often
focuses only
on narrowly
defined
service
requirements.SSC
IfIf changes
to
requirements
occur,
processes
have
toto
be
be
adjusted
ad
hoc.
As
a
consequence,
corporate-level
standardization
requirements.
If
changes
to
these
requirements
occur,
processes
have
to
be
adjusted ad hoc. As a consequence, corporate-level standardization
benchmarks
cannot
sustained.The
The
capabilitytoto
avoid
these
critical
issues
adjusted
ad hoc.
As be
abe
consequence,
corporate-level
standardization
benchmarks
cannot
sustained.
capability
avoid
these
critical
issues
benchmarks
cannot
be
sustained.
The
capability
to
avoid
these
critical
issues
depends
on
the
level
of
evolution
of
the
SSC.
depends on the level of evolution of the SSC.
depends on the level of evolution of the SSC.
The evolution of a SSC can be divided into multiple levels (Figure 4).
The evolution of a SSC can be divided into multiple levels (Figure 4).
Characteristics
1 Local departments
(no SSC)
• Duplication of effort
2
SCC
• Process optimization
• Inconsistent service
- Bundling of
• No consistent
- Economies of scale
standards
management culture
• Redundant
structures
competencies
- Standardization
and harmonization
• Implementation of
- Performance
Measurement
System (incl. KPIs)
- Service Level
Agreements (SLAs)
- Workflow-
3
Optimized
SSC
SSC operations are
stable
4 2nd GenerationSSC
• Continuous
• Establishment of
• Development of
• Modular
improvement process
Performance
Measurement System
(incl. KPIs)
• Quality management
service culture
expandability of
services
• Professionalization
of management
• Refinement of
• Quality
• Reward and incentive
• Self dependent
• Selective sourcing
• Systematic human
controlling
tools/instruments
systems
management
Focus
Evolution
process
Evolution
process
of a of a
Shared
Service
Shared
Service
centreCenter
SSC operations are
efficient and effective
improvements
through Six Sigma
optimization
resources
development
SSC maximizes
added value for
entire company
Figure 4: Evolution process of a Shared Service Center
Figure 4: Evolution process of a shared service centre
(Level
2) has
been
In recent
recent years
yearsaanew
newtrend
trendininSSC
SSCimplementation
implementation
(Level
2) has
been
observed,
namely
that
the
frequent
decision
to
base
site
selection
on
of
observed, namely that the frequent decision to base site selectionaspects
on aspects
quality
rather
than
cost
tends
to
provide
far
better
possibilities
to
realize
a
of quality rather than cost tends to provide far better possibilities to realize a
continuous improvement
Typically,
once
thethe
SSC
is implemented,
a
continuous
improvementprocess.
process.
Typically,
once
SSC
is implemented,
continuous
improvement
of
processes
and
service
levels
is
initiated
by
the
SSC
a continuous improvement of processes and service levels is initiated by the
(Levels
2 and23).
On3).
theOn
one
hand
review
of the operational
structure,structure,
together
SSC
(Levels
and
the
oneahand
a review
of the operational
with
identification
and
exploitation
of
optimization
potential,
is
key.
On
the
other
together with identification and exploitation of optimization potential, is
key.
hand
the
organizational
and
management
structure
including
staffing
is
put
to the
On the other hand the organizational and management structure including
test. In order to provide services of significantly optimized cost and quality,
staffing is put to the test. In order to provide services of significantly optimized
appropriate payment models and structures should be established. These
cost and quality, appropriate payment models and structures should be
measures are essential in order to keep staff motivated and its future
established. These measures are essential in order to keep staff motivated
development at a high qualitative level.
and its future development at a high qualitative level.
extent
that
all all
thethe
processes
are are
performed
If the
the SSC
SSC isisoptimized
optimizedtotothe
the
extent
that
processes
performed
efficiently, the
scope
of of
thethe
services
it provides.
ThisThis
efficiently,
theSSC
SSCcan
canextend
extendthe
the
scope
services
it provides.
stage
is
typically
the
starting
point
for
considering
selective
outsourcing
of of
stage is typically the starting point for considering selective outsourcing
specific
services.
According
to
our
experience,
however,
selective
outsourcing
specific services. According to our experience, however, selective outsourcing
often proves
than
expected.
Major
reasons
are are
the profit
often
provestotobe
beless
lessbeneficial
beneficial
than
expected.
Major
reasons
the profit
margin
of
the
outsourcer,
loss
of
business
flexibility
and
a
number
of
margin of the outsourcer, loss of business flexibility and a numberspecific
of specific
risks related
risks
relatedto
tooutsourcing.
outsourcing.
A
2nd Generation
Generation SSC
SSCgoes
goesone
onestep
stepfurther
further(Level
(Level4).
4).ItsItsfocus
focusisisnono
longer
A 2nd
longer
limited
to internal
internalSSC
SSCoptimization
optimization- it- itencompasses
encompasses
added
value
entire
limited to
added
value
for for
thethe
entire
company.
The SSC
SSC develops
developsinto
intoan
aninternal
internalservice
serviceprovider
provider
which
increasingly
company. The
which
increasingly
assumes
the role
role of
ofan
anoperational
operationaland
andstrategic
strategicconsultant.
consultant.
The
basis
assumes the
The
basis
forfor
this is
this
is the establishment
of a service-oriented
culture the
through
the systematic
the establishment
of a service-oriented
culture through
systematic
development
ofhuman
humanresources.
resources.Thus
Thusthe
theSSC
SSCcan
cangain
gain
competencies
development of
competencies
in in
anticipating changes
service
requirements.
anticipating
changesrelated
relatedtotoaacompany's
company’s
service
requirements.
Moreover, the SSC
onon
itsits
own
SSC is
is able
able to
toimplement
implementservice
serviceadjustments
adjustments
own
authority
and
to
introduce
process
optimization
proactively.
authority and to introduce process optimization proactively.
3
In order
level
of maturity
of anofinternal
service
provider
In
ordertotoassess
assessthethe
level
of maturity
an internal
service
provider
PricewaterhouseCoopers
has
developed
a
SSC-Capability-Maturity
Model Model
PricewaterhouseCoopers has developed a SSC-Capability-Maturity
(Figure 5).
(Figure 5).
Local departments
(no SSC)
SCC
Optimized
SSC
2nd Generation
"Independent
company"
Business
processes
No
standardization,
harmonization or
automation
Wide
standardization
and harmonization
Optimization and
automation of
business
processes
Crossorganizational
optimization
Systems and
Technology
Multiple systems
Partially
standardized
system
environment
Standardized
system
environment
Optimized and
modular designed
system
environment
Human
resources
Inconsistent,
non-uniform
management
Concentration of
competencies and
focus on
professional
know-how
Professional
know-how and
development of
management
Establishment of
service-orientated
culture and
leadership
Internal
customer
relationship
Inconsistent,
non-uniform
management
Standardized
routine processes
and transactions
Focus on efficiency Focus on added
andeffectiveness
value proposition
within the SSC
for the entire
company
Figure 5: SSC-Capability-Maturity Model
Figure 5: SSC-Capability-Maturity Model
The assessment
level
is based
on four
key key
criteria.
The
assessmentofofthe
thematurity
maturity
level
is based
on four
criteria.
1.
Businessprocess
processoptimization
optimization
1. Business
The
first
criterion
is
the
level
of business
process
optimization.
The first criterion is the level
of business
process
optimization.
Before Before
shared shared
services
areimplemented
implemented
(Level
1) most
processes
are performed
locally
services are
(Level
1) most
processes
are performed
locally and
are
often
neither
standardized
nor
harmonized.
In
the
course
of
business
and are often neither standardized nor harmonized. In the course of business
process transfer
a SSC
(Level
2) a2)standardization
and harmonization
of the of the
process
transfertoto
a SSC
(Level
a standardization
and harmonization
relevant
processes
should
be
realized.
Standardization
includes,
for
example,
relevant processes should be realized. Standardization includes, for example, the
the implementation
company-wide charts
costs
centers
or or software
implementation
ofofcompany-wide
chartsofofaccounts,
accounts,
costs
centers
software standards. Harmonization focuses on the optimization of processes,
standards. Harmonization focuses on the optimization of processes, systems and
systems and interfaces between departments. The main objectives of both
interfaces
between
departments.are
Thequality
mainimprovement
objectives ofand
both
standardization
standardization
and harmonization
cost
reduction.
and
harmonization
are
quality
improvement
and
cost
reduction.
As soon as the
As soon as the SSC has been implemented and is operating, the focus
SSC
hastobeen
implemented
and is operating,
the provision
focus changes
to a continuous
changes
a continuous
improvement
of the internal
of services.
improvement
internal
provision
services.
the SSC
maturity
Depending on of
thethe
SSC
maturity
level theofinitiative
for Depending
optimizationon
is taken
either
by thethe
internal
customer
(Level 3) orisbytaken
the SSC
(Level
4). internal
At this level
the SSC
level
initiative
for optimization
either
by the
customer
(Level
is working
autonomously
on At
thethis
continuous
of cross-organizational
3)
or by the
SSC (Level 4).
level theoptimization
SSC is working
autonomously on the
process structures.
continuous
optimization of cross-organizational process structures.
2.
Systemsand
andtechnologies
technologies
2. Systems
The
systemsand
andtechnologies
technologies
in use
represent
the second
assessment
The systems
in use
represent
the second
assessment
criterion.
Level1 1is is
often
characterized
a heterogeneous
criterion. Level
often
characterized
by a by
heterogeneous
systemsystem
environment
including pre-systems,
ERP-platform
andERP-platform
workflow solutions.
The
environment
including
pre-systems,
and workflow
solutions.
implementation
of the SSC
often
leads
to aleads
standardization
and consolidation
The
implementation
of the
SSC
often
to a standardization
and of
the systems (Level
2). systems
For example,
proprietary
applications
are replaced
by
consolidation
of the
(Level
2). For example,
proprietary
applications
modular
standard
software which
simplifies
the restructuring
of processes.
are
replaced
by modular
standard
software
which simplifies
the restructuring
Level 3 comprises further optimization, automation and possible expansion of
of processes. Level 3 comprises further optimization, automation and possible
the systems. SSCs which are confronted with changing service requirements
expansion
of the
the changes
systems.
which system
are confronted
with
service
have to reflect
in SSCs
their existing
landscape.
Thechanging
more
requirements
have
to
reflect
the
changes
in
their
existing
system
landscape.
modular systems there are, the easier it is to make adjustments to the service
The
more
modularAsystems
there
are, the easier
it is to make
adjustments
scope
and content.
SSC at level
4 implements
adjustments
autonomously
and
to
the service
scope
and
content.
A SSC at level 4 implements adjustments
provides
an added
value
to the
entire company.
autonomously and provides an added value to the entire company.
4
3. Human resources
An essential condition for a sustainable enhancement of SSC competencies is
3. Human resources
An essential condition for a sustainable enhancement of SSC competencies
is the development of human resources. At level 1, before implementing the
SSC, the development of human resources is performed locally and often
not according to company-wide standards. At level 2 shared services are
established and the focus is moved to the accumulation of specific knowhow in order to control operational processes and thus enable a more
efficient provision of services. Level 3 is characterized by the fact that in
addition to specific know-how, the development of management in particular
becomes more important. Vital for the success of shared services are both
the professionalization of management and the establishment of a serviceoriented culture. Therefore at level 4 the emphasis shifts to leadership, as a
principle of responsibility for the entire SSC staff. The management’s focal
points are the strengthening of employees’ competencies and motivation in
order to encourage proactive and customer-oriented behaviour.
Suitable actions to develop strong human resources and retain qualified staff
are for instance the implementation of:
•A Performance Measurement System (including KPIs) in order to track and
benchmark employees’ performance,
•performance-related remuneration,
•team compensation,
•involvement of the team in the recruitment process in order to
improve teamwork,
•flexible working hours (work-life balance, individualized working hours,
home office), or
•improvements to the working atmosphere (e.g. through increased
responsibility for processes and process reengineering).
Appropriate human resources measures as stated above, a service-oriented
culture, and the proactive quest for improvement are all crucial in stepping up
a SSC to the 2nd Generation level.
4. Internal customer relations
The final criterion is the internal customer relation. While the management
of customer relations at level 1 is often non-uniform, the interfaces and
communication channels of the SSC and its internal customers at level 2 are
broadly standardized. The SSC emphasizes on the delivery of operational
and standardizable transactions and processes. SSCs which have achieved
level 3 already implement measures to optimize internal customer relations by
the utilization of customer surveys, complaint management and suggestion
systems. At level 3 the focus is still on improvements of the SSC internal
efficiency and effectiveness. SSCs at level 4 have gone one step further and
focus on added value to the entire company. At this stage, the SSC is now
acting as a professional service provider and optimizing its operations strictly
with regard to the customer’s benefit.
All four criteria together determine the medium- and long-term cost and
service quality level of a SSC. The development of the cost and quality trends
in relation to the SSC’s maturity level are illustrated in Figure 6.
5
systems. At level 3 the focus is still on improvements of the SSC internal
efficiency and effectiveness. SSCs at level 4 have gone one step further and
focus on added value to the entire company. At this stage, the SSC is now
acting as a professional service provider and optimizing its operations strictly
with regard to the customer's benefit.
All four criteria together determine the medium- and long-term cost and service
quality level of a SSC. The development of the cost and quality trends in relation
to the SSC's maturity level are illustrated in Figure 6.
Local Departments
Cost/time
per unit
SSC
SSC
1
Optimized
SSC
Phase 1
2nd Generation-SSC
Phase 2
1
Scenario for an "as is"-SSC
2
Scenario for a 2nd Generation-SSC
1
Performanceadvantage
2
n
Generationd
SSC
1
Costadvantage
2
n
Generationd
SSC
2
Service/quality
2
2
Increasing SSC maturity
Figure 6: Cost and quality trend of a Shared Service Center
Figure 6: Cost and quality trend of a Shared Service Center
6
The figure shows that at the beginning, learning curve effects and economies of
scale lead to decreasing costs and to increasing quality. If, however, the SSC is
confronted with changing service requirements in Phase 1, this could result in an
unwanted development. In this case two different scenarios can be distinguished.
Scenario 1
is typical of a SSC which is not sufficiently prepared to anticipate changes to service
requirements. The organizational structure of the SSC has been designed and optimized
at a particular time for an efficient and effective provision of all contracted services. As a
result of company growth a need for adjustment can arise. If a specific transaction volume
is exceeded, the lack of human and technical resources results in a backlog of optimization
measures. As a result of this lack of resources - and insufficient flexibility - various tasks
concerned with implementation, adjustments and optimization can only be executed
partially. In the course of time this leads to sub-optimal service delivery and under utilized
synergies. Consequently, improvements in efficiency and quality can not be fully realized.
Scenario 2
- in contrast to scenario 1 - illustrates a 2nd Generation SSC which anticipates changes
in requirements over time and which is able to adjust its internal structures flexibly and
autonomously. This is a significant basis for the sustainable realization of medium- and
long-term cost and quality objectives.
Characteristics of a
2nd Generation Shared
Service Center
6
To ensure that a SSC is able to anticipate future service requirements and
reacts adequately, it is important to develop the SSC gradually into an
”independent” organization by focusing on the following issues:
•implementation of a customer-oriented service culture,
•expansion of decision-making authority in order to carry out service
adjustments proactively and autonomously (e.g. adjustments to the service
portfolio),
•development of human resources to safeguard and improve internal
competencies,
•implementation of a professional customer management to optimize and
further develop customer relations (e.g. implementation of a complaint
management system),
•commitment to continuous process improvement as an ultimate objective.
Service Center
•
•
•
•
expansion of decision-making authority in order to carry out service
adjustments proactively and autonomously (e.g. adjustments to the service
portfolio),
development of human resources to safeguard and improve internal
competencies,
implementation of a professional customer management to optimize and
further develop customer relations (e.g. implementation of a complaint
management system),
commitment to continuous process improvement as an ultimate objective.
The
combinationofofmultiple
multiple
SSCs
into
a service
organization
which
provides
The combination
SSCs
into
a service
organization
which
provides
different
servicesseems
seemstotobebefavourable
favourable
from
organizational
point
of view
different services
from
an an
organizational
point
of view
(Figure
7). The
The scope
scopeof
ofservices
servicesdelivered
deliveredbyby
such
a service
organisation
(Figure 7).
such
a service
organisation
cancan
be expanded
expandedfar
farbeyond
beyondfinance
finance
and
accounting.
Generally
almost
all nonand
accounting.
Generally
almost
all non-core
core
operations
such
as IT,
tax, treasury
or HR
are feasible
operations
such as
IT, tax,
treasury
or HR are
feasible
options.options.
Group department
Strategic relations
Customer
C1
C2
Chief Finance
Officer
Chief Service
Officer
Supplier
Chief Operation
Officer
...
S1
S2
...
Service organization
Transactional/operational relations
SCC 1
SCC 2
...
Figure 7: Integration of a Shared Service Center into the entire organization
Figure 7: Integration of a Shared Service Center into the entire organization
Over time an SSC could gain the ability to deliver a broader scope of services. A
Over
time
an SSC could
ability
to company
deliver a broader
scope
service
organization
adds gain
valuethe
to the
entire
by enabling
localof services.
A
serviceunits
organization
adds
value
the entire
company
by enabling
business
to focus on
their
core to
business.
The
SSC evolves
togetherlocal
with
business
to focus
their core
business.
The SSC evolves
together
the entire units
company
as anon
integral
component
in accordance
with corporate
with
the entire company as an integral component in accordance with
strategy.
corporate strategy.
7
7
8
Your benefit
A number of advantages and benefits can be realized by companies which
develop their SSC towards the 2nd Generation standard. The company is able
to focus on its core competencies. The SSC optimizes itself autonomously,
itinitiates the implementation of new technologies and it acts as a professional
service provider. On the other hand the extension of the SSC competencies
is a basis for further internal SSC optimization and future make-or-buy
decisions. The adjustment of SSC services according to the changing service
requirements of the company enables safeguarding of long-term cost and
quality advantages. Therefore a 2nd Generation SSC is particularly suitable for
ensuring a holistic end-to-end process view.
Our expertise
Companies which have already implemented a SSC are confronted with the
question of how to ensure the long-term cost and quality advantages of their
SSC. PricewaterhouseCoopers has been supporting clients for many years
in implementing and operating Shared Service Center. Our emphasis on high
quality is complemented by our future-oriented thinking on behalf of our
clients. This means going beyond the mere completion of a task to anticipate
their needs and provide a forward-looking solution. In doing so, we give our
clients added security in an increasingly complex world.
About us
PricewaterhouseCoopers (www.pwc.com) provides industry-focused
assurance, tax and advisory services to build public trust and enhance
value for its clients and their stakeholders. More than 155,000 people in 153
countries across our network share their thinking, experience and solutions to
develop fresh perspectives and practical advice.
About us
Paul Horowitz
Principal
Charles Aird
Managing Director
Tel.: +1 646 471 2401
E-Mail: paul.j.horowitz@us.pwc.com
Tel.: +1 704 344 7651
E-Mail: charles.l.aird@us.pwc.com
pwc.com
© 2008 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP (a Delaware limited liability partnership) or, as the context requires, the
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