Part - I

"The Obstacle is the Path."

- Zen Saying

The biggest obstacle faced by businesses around the Globe is insurmountable Costs, which leads to myriad of innovative ways and methods in the quest for Cost Reduction.

Shared Service Strategy is one such management thought, which was always practiced in one form or another, but is receiving renewed focus from business academicians and practitioners all over the globe.

Plain common sense has always been the best management strategy. Shared Service strategy executes this plain common economic sense by sharing the core central functions existing in the breadth and depth of the organization and transforming these distributed function centers into core central identities which achieve economies of scale, cost efficiency, and these entities turn themselves into sources of competitive advantage for the firm in more ways than one.

Shared Services approach optimizes business support practices and consolidates these into one or few locations. These functions are transaction or information intensive and occur in most business units. Business Processes that are not core component of business plan are ideal candidates for shared service operation such as Finance, HR, Procurement and Communications. A Shared Service Centre (SSC) brings these business processes together in a single location that supports multiple business entities on a customer-supplier basis.

For example, the finance and treasury functions are commonly included SSC functions as companies realize that financial shared service centers provide an ideal vehicle for the centralization of higher value added activities such as treasury, cash flow management, accounting and reporting.

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* Contributed by -
Narendar Lokwani,
II Year, PGSM,
IIM Bangalore,
Pre-Sales and Mktg Team, Aditi Technologies.