Understanding shared services (Article 1 of 3)

Abstract

Purpose: Shared services is a viable business model that can be used by organisations to reduce costs and enhance efficiency and effectiveness in the organisation. The purpose of this trilogy of articles is to introduce shared services as a business model, and how to efficiently and effectively manage a shared services business unit. The purpose of the first article in the trilogy, introduces shared services as a business model, defines what shared services is, the transformation required to successfully implement a shared services business model, as well as the benefits that can be derived from implementing a shared services business model.

Methodology: A comprehensive literature study was conducted in order to: - Define and describe shared services as a business model, - Compare shared services with centralisation and de-centralisation, - Determine and describe the transformation required to successfully implement shared services. Findings: In the article, a framework is generated to help organisations understand the business concept of shared services. This work has further potential: when applied correctly, there are both tangible and intangible benefits that can be accrued above cost savings.

Implications: The findings of this article are important for organisations that are in the process of implementing or have implemented shared services, as it will assist the organisation in determining if shared services is the correct business model for them to implement.

Value: This article provides an understanding of shared services and the business environment required to successfully implement a shared services business model. Value created by a shared services business model is further enhanced once the organisation has embarked on the successful implementation of a shared services business model, which is the primary objective of the second article, Implementation and continuous evolution in shared services.