There are many reasons why businesses choose to use shared services over centralized services. In this blog post, we will explore some of the most common reasons for this decision.
It is More Cost-Effective
When a business has centralized services, it often means that there is only one department responsible for that service. This can lead to higher costs because the department has to be able to support the entire company on its own. On the other hand, shared services mean that multiple departments can share the responsibility and cost of a service. This can help businesses save money because they are not shouldering the entire burden themselves. This is because the fixed costs of running a shared service center or organization (e.g., rent, IT infrastructure, etc.) are spread across a larger number of customers/users. In addition, shared services organizations often benefit from economies of scale, which further reduces their costs.
Shared Services Can Improve Business Efficiency And Quality
One of the main reasons businesses choose shared services over centralized services is that shared services can help improve business efficiency and quality. By working with a team of experts who are dedicated to providing high-quality services, businesses can improve their overall efficiency and quality. Additionally, shared services can provide access to a variety of resources and tools that businesses may not have access to otherwise. This can help businesses save time and money while still getting the services they need. In addition, when service providers are focused on serving a specific group of customers, they can develop expertise in that area and become more efficient at delivering those services. This improved efficiency can lead to better quality service for customers.
Shared services can also boost efficiency and quality by improving communication among different departments within a business. By having a central point of contact for all service-related needs, businesses can ensure that everyone is on the same page and that communication lines are open. This can help prevent misunderstandings and miscommunication, which can lead to errors and wasted time.
It Can Help Businesses To Be More Agile And Responsive To Change
Change is a constant in today’s business environment, and the ability to quickly adapt to new market demands can be critical to success. Centralized services can often be inflexible and slow to respond to change, while shared services are designed to be more agile. This can give businesses using shared services a significant competitive advantage. When service providers are located close to the customer base they serve, they can more easily respond to changes in customer needs. This can help businesses to be more flexible and adaptable to change.
It leads To Faster Decision-Making
In a centralized organization, decision-making can be slow because it has to go through multiple channels. This can lead to stagnation and missed opportunities. In a shared services organization, decisions can be made quickly because there are fewer channels. This leads to agility and better results.
Another point to consider is that in a centralized organization, all decisions have to go through a single decision-maker. This can lead to bottlenecks and delays, as the decision-maker may not be available or may need to consult with others before making a decision. In a shared services organization, decisions can be made more quickly because there are multiple decision-makers involved. This leads to faster decisions and less downtime for businesses.
It leads To Increased Accountability
In a centralized organization, it can be difficult to hold people accountable because responsibility is spread out among many different departments. In a shared services organization, each business unit is typically responsible for its own performance. This accountability can lead to improved performance because business units are motivated to improve their own results.
Also, when a business implements shared services, each department is responsible for its own budget. This increased accountability can lead to cost savings and improved efficiency. In a centralized service model, one central department is responsible for the entire budget. This can lead to waste and inefficiencies.
It Allows Businesses To Focus On Their Core Competencies
When businesses try to do everything themselves, they spread their resources too thin. This can lead to subpar results in all areas of the business, not just IT. Shared services allow businesses to focus on what they’re good at and outsource the rest. When businesses outsource non-core functions to shared services organizations, they can focus on their core competencies. This allows them to become more efficient and effective at what they do best.
It Helps Improve The Customer Service Levels Of Businesses
When businesses choose to go the centralized route, they are putting all their eggs in one basket. This can be a risky move as it leaves the business vulnerable to a number of potential problems. If the centralized service provider experiences any issues, the entire business could be affected. Shared services, on the other hand, provide businesses with a more reliable and robust solution.
With shared services, businesses can tap into a larger pool of resources. This gives them access to a greater range of expertise and knowledge, which can help improve the quality of their customer service. In addition, shared services are often more cost-effective than centralized solutions. When businesses are able to outsource certain tasks or functions, they’re able to focus more on providing excellent customer service. This is because they’re not bogged down by having to handle everything themselves. As a result, customers are more likely to have a positive experience with the company and continue doing business with them in the future.
It Is Easier To Align With Business Objectives
When a business is centralized, it can be difficult to ensure that each department is working towards the same goal. This can lead to silos within the company and inefficiency. With shared services, each team is working together towards a common goal, which makes it easier to align everyone with the company’s objectives. When done right, shared services can be closely aligned with the business objectives of the company. This alignment can be difficult to achieve in a centralized organization, where there may be conflicting priorities between different business units.
Shared Services Can Improve Communication And Collaboration
In addition to helping businesses be more agile and saving money, shared services can also improve communication and collaboration. This is because when businesses share resources, they are able to share information and ideas more easily. As a result, employees can work together more effectively to solve problems and achieve goals.
There are many benefits of shared services over centralized services. Businesses should carefully consider their options and choose the approach that best meets their needs.