What is Shared Services?
Shared Services is a set of principles for structuring the majority of staff work to be more cost effective, and business and service-like in its approach to delivering results to customers.

What are the Benefits of Shared Services?
As organizations grow, bureaucracy and administrative burdens increase. But administrative and support functions too often do not feel directly responsible for the company's results and tend to drift into a “comfortable mode,” since they are not exposed to pressing customer needs and market forces every day. Shared Services are often a means to transform such back-office functions into flexible, responsive, effective, customer-oriented teams.

The main advantage of the shared services model lies in the change of the activities and roles of different departments: a former context process of a department (for example, invoice processing) becomes the core process of the Shared Service Center. The concentration of homogenous tasks in a Shared Service Center bring economies of scale and a significant decrease of costs, which is the number one reason for the creation of Shared Services.

The second most frequently mentioned reason is quality improvement. The concentration of employees at one location also concentrates expertise. Continuously repeated processes are more often improved and streamlined, reducing errors and saving time. Managing the process's complexity, assigning process owners, and eliminating errors by experience and simplification
speaks in favor of Shared Services as a powerful tool, for example, to address the requirements of the recent Sarbanes-Oxley Act in regards to documentation and process control.

With proper IT system support, companies cannot only achieve process improvements, but also gain better data. The concentration of all major contact and operational data eliminates redundancies and opens new opportunities for analysis. However, the realization of the full benefits of Shared Services seems to be restricted to a certain company size.

Current Situation of Shared Services
Usually, companies choose a smaller region as a pilot project and extend the Shared Services from there. The typical return on investment (ROI) of an Shared Service Center is about three years.

Leading benchmarking and analyst firms have found that about half of the FORTUNE 500 companies have already implemented shared services. The most common processes put into a Shared Service Center are (in order of importance) financial transactions, human resources, and information technology (IT). As ideal processes for Shared Services have a high transaction volume and a high degree of standardization, 75% of the companies using Shared Services have deployed accounts payable (AP) and accounts receivable (AR) processes

Companies have also gradually implemented professional and advisory services into Shared Services, such as legal services, business case preparation, and financial analysis. However, operational processing prevails by far.