With companies looking to create more cost-effective operations, offshoring processes through outsourcing or shared services is at the top of the agenda for many CEOs.
As shared services consultants, Alsbridge has been active in designing and deploying multiple shared service centers over the past several years. Shared service centers are a viable alternative to outsourcing information technology services and business processes to a third party provider.
The shared services alternative typically appeals to organizations that wish to retain control over the offshore delivery center and the perceived integrity of their intellectual property. While cost savings of shared services centers are usually not as high as the outsourcing alternative, comparable cost benefits can be achieved if the center is planned, executed and operated effectively.
As per Alsbridge’s research, "need for control" drives most companies towards the shared services solution versus outsourcing. All of these processes are effected by corporate management influence and direction. The operations are deemed to be worth more than the savings that outsourcing may bring.
Alsbridge however, has found the following ten common issues that either make or break a shared services center:
Issue 1: Lack of executive sponsorship.
Issue 2: Lack of Communication plan.
Issue 3: Not knowing what to offshore
Issue 4: Not knowing the true cost of an SSC
Issue 5: Lack of understanding or sensitivity towards offshore cultural and behavioral differences
Issue 6: Lack of precision and clear communication with members of the global team.
Issue 7: Lack of defined roles and responsibilities.
Issue 8: Lack of human resource and government compliance regulation knowledge
Issue 9: Lack of integrated quality controls
Issue 10: Failure to manage expectations
For further details on the above issues that haunt unsuccessful shared services centers and the solutions to address each of these key issues, you can download the complete whitepaper below.
Organizations contemplating a shared services center delivery approach may benefit from these findings. The right sourcing decision is based on designing a solution (outsourced or shared service, onshore or offshore, etc.) that will best achieve the unique mix of objectives for each individual company. Becoming a successful shared service center doesn't happen overnight. It is a process that takes time, knowledge, communication, and good management. All factors need to be precise in order to achieve success in this environment.