Over the past 10 years, the centralization of decentralized services in a Shared Service Center (SSC) has become a popular organizational form. SSCs are set up for various services, including HR, Finance and IT. However, experience has shown that, in practice, many SSCs do not deliver what is expected of them: leveraging scale does not automatically result in economies of scale, the SSC is not able to provide the business with flexible support, or the business case on which the SSC is based is not realized. Organizations then face a difficult, twofold question: why is the SSC performing below expectations and, more importantly, what can and will we do about it? The answer to these questions is often not sought. Rather, the main focus is placed on the next steps to be taken along the path already chosen. Often, one of the following decisions is made without examining the true cause of the problem: ‘abandoning’ the SSC and reverting to departments, or the further outsourcing of the activities of the SSC. This is a shame in both cases, because the organizational form of an SSC offers large possibilities – as long as a number of conditions are always fulfilled.
Based on the experiences of several of Quint Wellington Redwood’s consultants, this white paper deals with 4 fundamental questions that can help organizations in setting up an SSC. Subsequently, 8 principles are described which contribute to the successful operation of an SSC. This white paper is therefore of interest to everyone who works at an SSC, or is involved in setting up or managing one. For customers of an SSC, this white paper provides valuable insights into the choices made when setting up an SSC and into the services SSCs provide.