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Utilization of Shared Services Operating Model Alternatives

Introduction

Over the past few decades, the Shared Services model has become increasingly popular as more companies adopt this powerful organizational design.  As the model has matured, the number of alternative designs has also increased, with a variety of options with varying levels of integration and complexity now available to companies, all with their advantages and challenges.  The descriptions of some of the most prevalent models for Shared Services are as follows:

Discrete Shared Services – Individual function based support model and infrastructure, focused on scale efficiency and potentially low cost locations.

Multi-Function Shared Services – Multiple function based (HR, IT, Finance) sharing locations, infrastructure, service management, and governance.

Global Business Services – End-to-end process based, with focus on process efficiency and effectiveness.  Empowered Global Process Owners (GPOs) driving standards, increased scope and a global delivery network.

Integrated Business Services – End-to-end service based, focusing on a simplified customer experience and achievement of business outcomes.  Expanded leverage of strategic partners and integrated service offerings.

iPollingTM Results Review

Recently, the Director of Finance Process Improvement for a large global company created a poll using Peeriosity’s iPollingTM technology regarding the use of the various Shared Services models.  The company had just gone live with a Global Business Services (GBS) organization and were interested in learning about what type of Shared Services operating model other companies were utilizing and for how long. 

Looking at the results of this poll, the Global Business Services was the most prevalent, with 39% using that design.  This was followed in popularity by Discrete Shared Services at 25% and Multi-Function Shared Services at 22%.  The newest and most advanced model, Integrated Business Services, had just 14% of the responses, but this is expected to grow significantly as more companies continue to evolve to that design over the next few years.

The second poll question looked at the number of years companies have been operating under their current Shared Services model.  Interestingly, 34% have done so for less than two years, while 22% have done so for 3-5 years and the remaining 44% for more than six years.

Some of the comments made by Peeriosity members include the following:

Consumer Products & Services Member: Common approach is Integrated Business Services, though we still have a few areas that would fall into the “GBS” definition as described in this poll. However, these are moving toward the Integrated Business Services approach as well.

Healthcare, Pharmaceuticals, Biotech Member: We’re called GBS and are actively moving in that direction, with integrated business services being our long term objective.

Manufacturing Member: Spoke and Hub locations is the strategy in place.

Consumer Products & Services Member: Shared Service started with accounting activities on a regional basis.

Manufacturing Member: Our current model is more aligned with a multi-function Shared Service organization, however, we are in the early stages of GBS.

Closing Summary

As shown in our recent research, companies continue to find themselves all along the Shared Services model spectrum, with some focused solely on single functions, or even processes, while others have evolved over a number of years in operation from a cross-functional design to Global Business services, and even to the leading-edge Integrated Business Services design.  This trend will likely continue as companies gain experience and as new companies embrace a Shared Services design for the first time.

What is the status at your company with respect to the Shared Services model that is being utilized?  Does your current approach meet the long-term needs of the company and what is your strategy as the landscape continues to evolve at a rapid pace due to digital disruption and other environmental factors?

Who are your peers and how are you collaborating with them?

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 “iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPollingTM.

Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers.   Membership is for practitioners only, with no consultants or vendors permitted.  To learn more about Peeriosity, click here



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