Discuss about the Literature Review of Shared Services for Jisc Research Data.
The report analyzes various aspects of the shared services. The report defines the concept of shared services and the associated characteristics of the service. Shared services have become increasingly popular among the organizations and the popularity is only increasing. Shared service means to share the services that are commonly used by the various department of the same organization (Eisenhardt and Martin 2014). It only increases redundancy in the organizational structure. It is much more convenient to share the service between the departments and this very approach has provided the motivation for the invention and adoption of the service (Ferrarini 2015). A literature review has been conducted on the topic to understand the topic more accurately and develop a clear viewpoint on the application.
According to Palmer (2017), shared services is mainly referred as the practice of various business units as well as operating organization that mainly decides to share proper set of services rather than having number of duplicated services. This type of common services are generally considered administrative functions which are generally combined for improving the services as well as for obtaining better scale of economies in order to get all the parties that are participating to be properly accountable in sharing transactions. On the other hand, it is stated by (Herbert and McGovern 2016) that shared services is one of the consolidation of business operations that are generally utilized by multiple parts of the organization. It is considered to be very much cost-effective as it generally helps in centralizing various operations related with back-office which are mainly used by the various departments of the organization for eliminating redundancy. It is identified that some of the companies generally utilizes charge back system.
According to Martín-Pérez and Berger (2014) Shared service has the ability to reduce the complexity of the organizational structure. The authors argue that creating several duplicates of the same service has several drawbacks. The reason that the authors have cited here is that whenever the same service is deployed across the various department of the same department the service has to be maintained individually which will only add complexity to the overall organizational structure. However according to Quinn et al. (2014), the feature that makes shared service appropriate for the organization is the ability of the service to align with the external competitors. The authors mention that shared service helps in building strategic knowledge by including information about the competitors in the external market. It analyzes the strengths and weakness of the external market with respect to the market competitors and provides detailed overview of the competitiveness with respect to the internal clients (Lacity2016). It also explains the market deviations which is a useful feature for the analysis of the market competition.
It is stated by Valkama, Asenova and Bailey (2016) that shared services mainly operates as one of the standalone unit and it is identified that in most cases it is one of the entity that is not dependent. They must run a business and must consider an internal outsourcing partner and they generally assists in creating flatter structure of the organization. On the other hand, it is argued by Wang and Wang (2014) that shared services are mainly separated geographically with the virtue of different communication as well as information technology. They are mainly considered as one of the procedure that generally focusses on number of activities that are mainly nonstrategic as well as business supporting.
It is opined by Clements and Dvorak (2017) that shared services are mainly driven with the help of the competition that exists in the market with the help of the services. It is identified that the services must be given at very much low cost by virtue of economies of scale. They generally lowers the service cost and enhances the level of quality that is found to be very much attractive option that generally seeks number of services from the centre of shared services from various external providers. However, it is argued by Fu et al. (2015) that shared services generally helps in leveraging number of technological investments and this is due to the fact that their concentration can be able to demand better discounts as well as prices. In addition to this, it is identified that shared services generally helps in justifying the purchase of enabling various types of technologies (Slusarczyk 2017). Furthermore, shared services assists in focussing on number of services as well as support to business units that are generally go beyond even the tradition notion of the customer service as well as client support. The basis generally assists in creating enhanced level of internal supplier as well as customer service due to partnership.
According to Wang and Zhou (2016), it is identified that shared services generally helps in reducing various types of administrative expenses and assists in improving the efficiency by capitalizing on consolidation, automation of procedures, standardisation as well as economies of scale. It is found that more amount of time is mainly generated for the senior management of the organization as well as staffs in order to focus as well as for directing their attention to different types of strategic issues as well as needs of the customers. It is stated by Chitty and Ellis (2016) that critical mass of services can be created with the help of shared services which is used further for justifying various types of technological improvements as well as service development.
It is found that this critical mass generally helps in facilitating services that helps in engaging with various types of strategic goals of the organization. In addition to this, there must be accumulation of capital as well as intellectual assets that helps in facilitating large number of affordable experts for dealing with number of complex issues. It is found that there must be an opportunity of deploying new type of technology that is mainly afforded with the help of cost sharing by the number of multiple units of business and thus minimizing the unit costs (Tchórzewski 2017). Furthermore, due to the utilization of shared services, the speed as well as efficiency of working enhances and assists in engaging in more as well as in more focussed way.
According to Bergeron (2015), cost reduction is the major motive for the organization to implement shared service practice in the organizational business architecture. It simplifies and to some extent makes it easier to manage different organizational needs with a single service on shared services. It is opined by (2014) that in order to successfully implement the shared service, the service should be operated just like a traditional business is managed. It should be outsourced to third party vendors and the IT service provided by the vendors must be tailored according to the customer needs. It would be help organization to recruit people in better, faster and more efficient way.
Key success factors are considered as ingredients that are mainly necessary for the success of various shared services. This generally include communication, shared service employees, general predictors as well as performance management as well as flexibility of the services. The key success factors are elaborated below:
Shared service employees: It is suggested by Lopes (2017) that availability of various skilled workers, supportive culture of the business, high level employees as well as open employee communication are quite necessary for the environment of shared services. It is found that the strategy that is related with people management helps in documenting the road map for developing and increasing an effective shared service structure. This generally includes development, consultation, redeployment as well as training. It is identified that the shared services environment generally needs transformation of people. In traditional companies, employees generally create departmental relationship with different other business units. It is identified that in shared service environment employees are required to develop customer service as well as business partner relationship with other units of the business (Squilla, Lee and Steil 2017). The employees that generally renders shared services unit generally requires to become both customer focused as well as responsive as per the needs of the various units.
Communication: It is stated by Herbert and Windsor (2016) that development of two way communication between different service provider as well as user is considered as one of the essential driver for the shared services. Communication within the environment of shared services helps in informing stakeholders about service solicitation feedback on different ideas by alerting different types of changes. Some of the methodology that is related with communication mainly include meetings, newsletters as well as discussion forums. The importance as well as understanding on the shared services are found to be contingent upon effective communication by different management levels.
Operating model: It is opined by Murtagh (2015) that operating model must be properly explored during the feasibility as well as vision stage for encompassing various types of shared services framework. Each service must have proper functional model of operating that identifies the mix and generally utilizes employee service centers as well as self –service. There must be strong culture for performance management that generally ensures effectiveness, efficiency as well as continuous improvement for encouraging the service level agreement delivery, performance reporting procedure as well as resource planning. It is quite essential for setting proper metrics for measuring the benefits as well as advantages of shared services. It is identified that people can only manage what can be measured. Therefore proper metrics are considered as an essential ingredient for efficient as well as effective environment of shared services. In addition to this, all the services that are mainly supported by the cost benefit analysis must have proper timelines, milestones for supporting as well as for benchmarking data.
According to the 2018 annual survey presented by the Global Business Services (GBS) and outsourcing industry, most of the companies around the world are facing the pressure for bringing improvement in the process management (Services 2018). The pressure is due to the external forces such as digital disruption and due to this companies are looking for better and improved way to use the share services to deal with the external market competition.
According to the annual report published by Capgemini, Major national and International IT companies these days are looking for the outsourcing of the IT services for bringing speed and efficiency in managing IT services. According to the companies, IT outsourcing has improved the talent hiring process significantly. Shared service has a major role to play in this context as outlined by the report. The companies are adopting shared service to reduce redundancy in the organizational structure as well (France 2018).
According to the Global shared services 2017 report published by Deloitte, shared service is becoming popular among the global organization due to cost effectiveness (Kpmg-institutes.com 2018). Shared service is helping in creating business cases for the organization which helps to understand the cost and saving opportunities with the business strategies. It is analyzed that shared service center generally helps in delivering greater value each year. In the year 2017, it is reported by 73% of the respondents of the shared services that the productivity have enhanced by 5% from the year 2015. Although it is analyzed that knowledge related processes are on the rise still adoption of much more complex as well as knowledge based processes can get tripled from the year 2013 (Porter and Kramer 2019). In addition to this, while there is much important movement towards the global business model it is identified that 72% of the organizations does not utilizes GBS in order to make shift within the plan while 4% generally tried GBS switched back.
According to Almeida (2017) the enterprises determines the value of shared services of the organization over the three decades. It is identified that enterprises generally creates IT shared services for the organizations in order to centralize various IT functions in order to professionalize various services and for selling high quality services at a very much lower prices. The concept of working well generally assists in improving the performance of IT as well as reliability by lowering the It component unit costs in order to create proper professional team for the various technology experts so that the organization can widely reply on that.
The IT functions that are associated with the enterprises are generally aligned around various technologies that are generally organized by middleware, maintenance of application, development of application, security as well as project management (Elston 2014). It is stated by that each of the functional team generally helps in organizing high quality functional services which are generally resold for the broader organization. This generally assists in making a great deal of sense until proper consideration about the collapse of stack is generally integrated as well as automated.
It is opined by Bish and Filipowicz (2016) that as the entire technology related stack collapses, it generally assists in challenging the organizational structure for operating various types of assumptions which generally builds IT enterprises. After properly examining the inevitable changes, it is analyzed that the shared service utilization is quite different the various functionally aligned companies that generally dominate the entire space (Lopes 2017). It is expected that IT shared service is very much helpful in aligning the organizations with the collapsed stack realities that generally helps in enabling much proper alignment with the needs of the business by properly delivering significant TCO within the business.
According to Squilla, Lee and Steil (2017), in order to support the efforts of the shared services that is mainly described by the memorandum it is necessary to describe that it generally serves as one of the managing partner for center line of business for the federal government. It is identified that OGP in proper consultation with various unified shared services helps in maintaining as well as establishing proper data services within the marketplace for coordinating the services for various inter-agency consumptions.
It is done by making proper coordination with OMP for defining as well as qualifying various standards of operation for the interagency providers of shared services, for developing proper guidance materials and for determining as well as approving the candidates. The shared services can be consumed by the inter agency by monitoring as well as maintaining the inter agency provider of shared services at the various standards of operation (Porter and Kramer 2019). It also helps in maintaining proper online inventory for the qualified shared service providers. It is also consumed by the inter-agency by properly establishing proper online support tool for facilitating review of the agency, their selection as well as analysis of the shared service providers in contact to inter agency.
It is opined by Bish and Filipowicz (2016) that there is no decrease in the evolution of shared services which is considered as one of the overriding findings of the year 2018 in context to market survey. It is mainly highlighted within the recently published interactive workbook that many of the organizations are just waking up for the value of shared services. It is identified that more than forty percent respondents are generally planning for the implementation of the model. It is indicated by many of the respondents that transformation within the shared services is the shift within the knowledge based activities. On the other hand, it is opined by Murtagh (2015) that SSON’s annual state associated with shared services as well as outsourcing industry generally undertakes a survey that generally helps in collecting responses from more than 630 professionals including the popular models of the organization. It is identified that strategy is mainly evolving from transactions to the work associated with knowledge in order to embrace intelligent automation.
Currently the business organizations are utilizing shared services for enhancing process efficiencies within the organizations. The utilization of shared services also helps in improving knowledge related expertise. It is identified that technology plays an important role in driving change rather just facilitating it (Almeida 2017). The payroll and HR system can carry out numerous services as well as functions that would generally helpful. It also helps in making it quite easier for introducing proper training facility in order to ensure that proper public sector workforce is required for providing proper possible service that ate mainly useful for dealing with the various types of changes within the business organizations.
It is found that digital disruptions can also help in creating proper expectations of the customer by continuously catering as well as adapting it for their changing requirements. In addition to this, it is identified that the utilization of shared services also helps in saving costs for various HR as well as payroll functions if they are properly handled with the help of a specialist. It is found that outsourcing the services not only reducers overheads as well as need for large headcount however it assists in carrying out tasks properly with the help of proper automated technology.
The literature review as well as the current practices of enterprises is compared and it is identified that the current practices agrees with the literature review. It is analyzed from the literature review that the organizations utilizes shared services for cost reduction, increasing efficiencies as well as for improving knowledge expertise (Elston 2014). Similarly it is analyzed by focusing on the annual reports of the business organizations that utilization of shared services assists in enhancing process efficiencies within the organizations. It also helps in improving knowledge related expertise. As outlined by Martín-Pérez and Berger (2014), shared services helps to simplify the organizational structure for managing the various organizational needs with the help of single service on shared basis. The annual reports published by the capgemini also aggress with that.
A similarity is also seen between the findings of Bergeron (2015) and the 2017 report provided by the Deloitte. Both the findings agree with the fact that shared service provides cost effective solution for business process management. It is determined that shared service is helpful in creating business cases for the organization which helps to understand the cost and saving opportunities with the business strategies. The finding of Quinn et al. (2014) is relevant with the 2018 annual survey by Global Business Services (GBS) and outsourcing industry. Both the findings agree with the fact that shared service helps organization to deal with the external market competition.
Conclusion
The report concludes that the concept of shared service has become very popular among the global organization. The shared service helps to create a simplified organizational structure and reduce the redundancy in the organizational business process. The concept of shared service eliminates the needs for creating several version of the same service for performing similar kind of tasks across the various departments of the organization. The ability of the shared service to provide a common framework for the service sharing for managing similar tasks has helped the companies to reduce the operational cost of the business services. Various literatures that have been reviewed present different views for the justification of the popularity of the shared service. Additionally, current practices in the topic have been compared with the literature findings to provide more clear view about the topic and the relevance of the literature finding as well. According to the comparison, the report concludes that customer alignment, reduction in redundancy, cost effectiveness, better customer service are some of best features of the shared service that makes it so popular across the organizations of various sectors.
Reference:
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