Majority of Shared Service Centres Suffer Compliance Issues

57 percent of shared service centres (SSC) have problems with regulatory compliance, according to the Alsbridge annual Shared Service Centre Research Study. The study also found that 89 percent of shared service managers foresee challenges with their SSCs, which is a worrying statistic given the pressure being placed on both private and public sector organisations to implement shared service agreements.

The study, which included qualitative interviews with almost 50 shared service leaders from global organisations, found that only half of SSCs have Service Level Agreements (SLAs) that define the service and performance levels of both the SSC and the customer. 17 percent of respondents have no formal relationship framework in place and eight percent have no performance management framework.

Elaine Harrison, Senior Manager, Alsbridge plc, commented: “SLAs should provide a link between services provided by the SSC and the business objectives by creating cost/performance accountabilities. These help to strengthen the relationship between the service provider and the customer. However SLAs should not be seen as a substitute for an effective governance framework that that encourages open communication between the SSC and the customer.”

Other findings from the research include:

• Respondents named reducing operating costs and optimising current assets, focusing on back office commoditised services and improving flexibility and responsiveness to business changes as the most important factors to consider when setting up a shared service centre
• Only 20 percent of survey respondents have implemented a single ERP solution for end-to-end processes, which is considered best practice
• Only 19 percent of respondents applied service performance related charging for their shared service activity although these are believed to be the most effective in building trust between the supplier and the customer. Even less, five percent, included behaviour related penalties and payments relating to the shared service performance levels

“Although the shared service centre model is seen as a key vehicle for improving the efficiency of support activities, many SSCs are failing to meet their full potential. In order to optimise SSCs, organisations need to examine all aspects of the operation from process automation and standardisation to performance management and service level agreements,” concluded Harrison.

About Alsbridge plc

Alsbridge is the award winning global advisory firm, providing unbiased advice and assistance on outsourcing, shared services and offshoring. Alsbridge consultants bring extensive vertical industry expertise and a practical knowledge of all areas within information technology and business process outsourcing. The firm's proven methodology incorporates proprietary collaborative sessions, bringing together executive teams from both the client and the provider in an environment that fosters collaboration. Alsbridge supports its recommendations and assistance through significant investments in proprietary benchmarking and ongoing research within the industry. For more information, visit www.alsbridge.eu