Over the last 15 years, Shared Services has become a well-established delivery model for the provision of common functions used across departments or countries within an organisation.
Funding is usually shared by those departments consuming the services or charged back on a transactional basis.
The aim is to ensure that the consolidation and standardisation benefits outweigh the potential disruption to the service flow (caused by moving the work to a central location, creating waste in handoffs, rework and duplication, etc.).
So, what could possibly go wrong?
Once functions are delivered by a separate unit the people cost stands out and the temptation to start the race to the bottom looms large. Companies get hooked on low cost labour – potentially chasing from continent to continent to get a better “fix”.