Shared Service
Shared services - combining for economy
Shared service centres are a very welcome and new feature in the Tees Valley economy. They represent a new approach to the problem of cutting costs without reducing standards and are quietly making headway in UK boardrooms.
It concentrates on the business services departments most companies maintain. These services – accounting, IT, facilities management, HR and other similar services – are essential to the smooth functioning of an enterprise, but usually make no contribution to its core business.
Yet they are often located in expensive head-office premises, or, worse, replicated from Division to Division or location to location, as part of each operating manager’s portfolio. There, these essential business services become a drain on core-business resources of money, space and management time.
By stripping them out, consolidating them when they are replicated, and locating them in cheaper, dedicated – often remoted – shared-services centres, considerable cost savings are possible. And the concentrations of expertise in these dedicated centres often means a marked improvement in the service provided.
There are few published studies of the shared-services centre approach. Details of how it works in practice are scarce.
To fill the information gap, Tees Valley Regeneration has commissioned a high-level research study. The adoption of shared-service centres is a fop-level decision, and the research was carried out among randomly selected Managing directors, Financial Directors and senior financial managers of the UK’s top 1,000 companies by turnover.
The outcome is a unique and trustworthy picture of a new organisational approach – as far as we know, no comparable study exists. The research findings below allow the senior managements of UK companies to see how their customers, suppliers – and competitors – are addressing the new practice.
What functions can be share? How big are typical shared-services centres? How are they staffed? Where are they best located? What sort of accommodation is required? These and other questions are all covered by the findings.
If you are not already pursuing the shared services route, it may help to see the experiences of companies that area. And if you are already considering or committed to shared services, you will be interested to see the case for locating them in the Tees Valley.