Creating Shared Services in the Private and Public Sectors

Abstract

In this chapter, we discuss the first major sourcing option organizations should consider: shared services. According to Accenture (2005), the definition of shared services is “the consolidation of support functions (such as human resources, finance, information technology and procurement) from several departments into a standalone organizational entity whose only mission is to provide services as efficiently and effectively as possible.” Mature shared services organizations are stand-alone entities with standardized processes, service level agreements (SLAs), user chargeback, and high-performance, “front office” cultures that service multiple departments (Lacity and Fox 2008; Schulz and Brenner 2010). According to a recent survey of 270 respondents reporting on 718 shared service centers, finance/accounting (93%) is the functional area most commonly moved to shared services, followed by human resources (60%), information technology (48%), and supply change management (47%) (Deloitte 2011). Although IT organizations have not adopted shared services as widely as finance and accounting, reports indicate that IT shared services are growing at a faster rate (Alsbridge 2007). Indeed, successful management of IT shared services was listed as one of the seven habits of effective CIOs (Andriole 2007).