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Part - II

Key Drivers for implementation of Shared Service Strategy (SSS)

Firms worldwide are pressing hard for implementation of SSS and the key drivers for this are the following: -

• Alignment of the Business Strategy and Administrative processes is achieved.

• Improvement in the Quality of Services: Establishing Shared Service Centers (SSCs) can be a catalyst for reengineering the business processes that will be performed centrally. These centers are measured by Service Level Agreements (SLA) to ensure that firm observes continuous process improvements and change. Process Centralization, Process Re-Engineering and SLA agreements are the driving factors behind the observed process improvements.

• Creation of Value from Shared Services: As the firm centralizes its business processes, it achieves what is called as distinct firm capability as it is miles ahead of its competition in terms of execution of processes like HR, Finance and Procurement. A firm, which believes in diversification, can achieve economies of scale and then decide to introduce its services in market as well, which creates tremendous value for the firm. E.g. Dun and Bradstreet created "D&B Satyam Services" to centralize its IT operations, which then emerged as Cognizant Technology Solutions which is now an standalone leading services firm in its own right!

• Future Growth: At the onset, most SSCs start with transactional back-office activities but as the internal customers derive value and get more comfortable with the structure and standardized processes, front-office activities are integrated into SSCs as well.

• Increased Visibility and Control: Centralizing business activity increases visibility and control as Web based technology is increasingly used to realize SSC and hence low cost, always-on interaction between SSCs and their internal customers is facilitated.

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