While there is no universally agreed definition of a shared service platform (SSP) in IT, these are nothing new in the fields of business and finance. SSPs are simply a way of first standardizing , consolidating, and automating processes in cost-effective locations to provide services to internal customers. These services are accessible to various departments, divisions, and groups within an organization and may consist of accounts payable and receivable, payroll, travel and entertainment reimbursement, the general ledger, and cost accounting.
Before Cloud – Shared Services Platforms in the Industry
SSPs are not to be confused with centralized platforms. While any business process that would benefit from heightened customer focus is a suitable candidate for a shared services model, SSPs go beyond that by providing internal customers with value-added activities. The objective of a shared services model is to effectively run, grow, or transform a business. A successful shared services model is defined by a focus on customer satisfaction and providing value via continuous improvement.
According to Gartner [1]
Shared services offer distinct advantages over centralized services, revolutionizing the way organizations operate. There are three key benefits of shared services. Firstly, shared services enhance efficiency and cost savings by consolidating and streamlining support functions, leading to standardized processes, optimized workflows, and economies of scale. Secondly, shared services provide improved service quality and customer experience by offering specialized teams that understand unique business requirements and deliver tailored support. Lastly, shared services enable agility and flexibility, allowing organizations to adapt rapidly to changing business needs through scalable resource allocation and alignment with strategic objectives. As shared services gain recognition, they become a crucial strategy for businesses aiming to optimize operations and achieve competitive success.
So why build shared services? More than ever in today’s competitive business environment, organizations are under pressure to reduce costs and improve efficiency. One way to do this is to implement a shared service platform. A shared service platform is a centralized system that provides a variety of services to different departments or business units within an organization. This can include things like human resources, finance, IT, and procurement.
So why build SSPs in the Cloud –
- Extending this to technology and the cloud, the current industry thinking is that the adoption of shared services in cloud computing brings numerous benefits to organizations.
- Build less repetitive infrastructure and more applications – By utilizing shared resources and services, organizations can achieve economies of scale and cost savings, as they can share the infrastructure, platforms, and applications with other users.
- Deploy quickly and reduce time to market for new business services – Shared services also enable organizations to rapidly deploy new services and functionalities, as they can leverage the pre-built and pre-configured resources available in the cloud.
- Scale quickly – Additionally, shared services in the cloud can enhance scalability, as organizations can easily increase or decrease the amount of resources they need, depending on their changing business needs.
- Reduce cost – Finally, shared services in the cloud can improve operational efficiency, as organizations can centralize their IT resources and manage them more effectively, while also reducing the time and effort needed to maintain and support their IT systems.
- Bring in more agility – Overall, the adoption of shared services in cloud computing can lead to increased agility, flexibility, and competitiveness for organizations.
- Improve customer service – A shared service platform can help organizations to improve customer service by providing a consistent level of service across all departments and business units.
Conclusion
In the quest for operational optimization, cost reduction, and improved service delivery, shared services have emerged as a popular choice for businesses. Whether organizations opt for building in-house shared services or outsourcing non-core functions to third-party providers, the benefits are significant. By implementing shared services, businesses can streamline operations, realize cost savings, and maintain high levels of quality and efficiency. This strategic approach allows companies to focus on their core competencies while entrusting support functions to specialized teams. As shared services continue to gain traction, businesses of all sizes are leveraging this approach to enhance their competitiveness in an ever-evolving marketplace. The next blog post will explore how these can be implemented on cloud platforms by leveraging containers.
References
[1] Gartner – “3 Advantages of Shared Services Over Centralized Services” https://www.gartner.com/smarterwithgartner/3-advantages-of-shared-services-over-centralized-services