What is Shared Services Model?

Q: What is Shared Services Model?

Shared Services Model centralizes corporate functions to deliver consistent, efficient services, reduce costs, improve operational risk, and support continuous improvement.

Definition

Shared Services Model centralizes business functions such as finance, HR, procurement, and IT to deliver standardized, cost-efficient services across an organization. By consolidating operations under a single framework, companies achieve consistent service quality, improved Operational Risk (Shared Services), and enhanced Shared Services Expense Management. The model also supports Robotic Process Automation (RPA) in Shared Services for scalable, efficient operations.

Core Components

Key elements of a Shared Services Model include:

Shared Services Maturity Model: Evaluates organizational readiness and capability for centralized operations across functions.
Global Business Services (GBS) Model: Integrates multiple shared service centers into a single global operating model for efficiency and consistency.
Activity-Based Costing (Shared Services View): Measures cost allocation accurately across services to identify optimization opportunities.
Vendor Governance (Shared Services View): Manages third-party relationships, ensuring quality, compliance, and cost efficiency.
Capacity Planning (Shared Services): Aligns staffing and technology resources with service demand to maintain performance.

Implementation Approach

Implementing a Shared Services Model involves designing a centralized operating framework, standardizing processes, and deploying supporting technologies. Shared Services Budget Governance ensures consistent financial oversight, while Shared Services Continuous Improvement drives ongoing efficiency gains. Companies often combine process mapping, automation, and performance monitoring to achieve operational excellence.

For example, consolidating accounts payable and invoice processing from five regional offices into a single center, enhanced by RPA, reduced processing time by 40% and improved accuracy, directly impacting Business Continuity (Shared Services).

Practical Use Cases

Shared Services Models deliver strategic benefits across the organization:

Centralizing accounts payable and reconciliation controls for efficiency and compliance.
Standardizing HR payroll, benefits, and recruitment operations across multiple geographies.
Improving procurement operations through consolidated Vendor Governance (Shared Services View).
Leveraging Robotic Process Automation (RPA) in Shared Services to automate repetitive tasks such as invoice processing or payment approvals.
Supporting enterprise-wide Capacity Planning (Shared Services) to balance workload and optimize resources.

Interpretation and Implications

A mature Shared Services Model leads to improved Operational Risk (Shared Services), predictable service delivery, and cost savings. Low maturity may indicate fragmented processes, higher expenses, or inconsistent service quality. Companies can use the Shared Services Maturity Model to benchmark progress and identify areas for improvement. Edge cases, such as sudden volume spikes or regulatory changes, require dynamic capacity planning and process flexibility.

Best Practices and Improvement Levers

Organizations can maximize the benefits of Shared Services by:

Implementing Robotic Process Automation (RPA) in Shared Services for faster, error-free operations.
Conducting Activity-Based Costing (Shared Services View) to identify high-cost areas and optimize resource allocation.
Establishing Shared Services Budget Governance to control expenses and monitor financial performance.
Driving Shared Services Continuous Improvement initiatives to enhance quality, reduce cycle times, and increase stakeholder satisfaction.
Integrating Enterprise Shared Capability Model to align capabilities across service centers globally.

Summary

The Shared Services Model centralizes and standardizes corporate functions, enhancing efficiency, cost management, and service quality. By leveraging Robotic Process Automation (RPA) in Shared Services, Shared Services Maturity Model, and Vendor Governance (Shared Services View), organizations can optimize operations, mitigate Operational Risk (Shared Services), and support Business Continuity (Shared Services) while driving long-term financial performance.