Shared services arrangements are designed to achieve efficiencies by using a single organization to provide a service to multiple departments and agencies (i.e., clients), rather than requiring each of them to have their own capacity to provide that service. In our federal government, shared services concepts have been prevalent for years. The conventional back-office centralized shared services exist in large agencies where internal departments offer very distinct services to the general public. There has been a long history in this area ranging from mainframe data center support services and more recently the consolidating of enterprise resource planning, academic technology, and content repository environments into centralized shared service models.
Benefits of Shared Service Models
While a range of different products and services can be supported, shared service delivery models usually have common features.
- Economies of scale or scope and the achievement of efficiencies.
- Increased leverage for negotiating positions vendor.
- Streamlined business processes for common scenarios.
- Improved management and the improvement in quality and delivery of service.
- Cost economiess for high-volume transactions.
- Standardization of business processes.
- Optimization of commodity services.
- Reduction in costs for systems maintenance and management.
Challenges of Shared Service Models
Despite the successes, apparent advantages, and opportunities in shared services, there are also challenges in implementing them, numerous failed attempts, and lessons learned.
- Perceived loss of control and flexibility
- Trade-offs of reduced costs versus perceived lack of localized service delivery support
- Developing a shared delivery organization and grouping of service delivery resources.
- Defining common practices and standardizing processes
Shared service approaches are not intended to be utilized across all service delivery areas. An understanding of how it can work in unique situations and the potential challenges is important in determining applicability.
Common examples of organizations getting together to share fixed costs or create formal shared service centers include:
- Public funded colleges consolidating operations or creating models that share fixed costs to eliminate redundancies wherever possible
- ERP and LMS customers running similar products getting together to consolidate key support functions and share internal resources (functional and technical).
Gilfus Education Group shared services advisors can help you assess an existing shared services solution, evaluate opportunities for improvement, or design and build a new center. We can also support activities such as the sale or commercialization of a shared services center. Our team is passionate about the role of shared service centers as a tool to share and reduce fixed costs within the education and government. We have creative (and proven) models that can help you rethink how you do business in today’s challenging economic conditions while utilizing the tax payer’s dollars more effectively. the Gilfus Education Group will help your shared service center focus on such nuances as customer service, partnership, scale and scope, adaptability, process management and ownership, innovation, and governance.