Global shared business services are on the rise, delivering an 8% average increase in productivity and with 91% of organisations claiming they help to reduce costs, according to research by Deloitte.
The business consultancy surveyed 300 organisations across the world and concluded that shared business services, which include IT and IT- enabled business processes, are paying for themselves quickly.
“The shared services model is more diverse and more mixed than ever before,” said Nick Prangnell, global business services consulting lead at Deloitte. “Despite this complex backdrop, 91% of respondents to our latest Shared Services Survey suggest this business operation has had a positive impact on cost reduction, with an average payback of 2.3 years.”
Deloitte found that almost any country can be used to set up shared service centres. “Two-thirds of shared services organisations currently operate across many locations, are multi-functional, and serve multiple businesses,” added Prangnell. “They continue to deliver results at regional, national and global levels, with an average annual productivity increase of 8%.”
Read more about shared services in UK public sector
- Surrey County Council’s Cabinet has signed off a plan to save millions of pounds by sharing services, including IT, with East Sussex County Council.
- The leader of the union representing police back-office workers has criticised a Met Police plan to outsource back-office functions to a public and private partnership, with fears over the processing of sensitive data going into private hands and even being offshored.
- The Cabinet Office is working with Steria to create a joint venture that will consolidate government back-office functions, in a deal worth up to £1bn.
Western Europe has the most shared services centres, with 27% of the organisations surveyed having a centre there. The US and Canada came next with 19%, Asia-Pacific 17%, Latin America 16%, Eastern Europe 10% and other areas 3%.
The use of global centres in multiple locations is also a trend noted by management consultancy AT Kearney in its recent index that ranks business services locations. India is still the best place for businesses to outsource services, offering unrivalled scale and availability of skills.
Asian countries dominate Kearney’s index of the top 50 global locations, making up six of the top 10. India, China and Malaysia are the top three, followed by Mexico, and then come Indonesia, Thailand and the Philippines. The remaining three in the top 10 are Brazil, Bulgaria and Egypt.
AT Kearney said in its 2014 Global Services Location Index that India, China and Malaysia have topped the index every year in its 10 years of publication.
Meanwhile, in the UK, public-sector organisations such as local government, central government and the emergency services are also harnessing shared services to cut costs. For example, the Met Police is outsourcing its HR, payroll and procurement divisions through a business process outsourcing deal with a joint venture between the government and French IT service provider Steria, known as Shared Services Connected.