SHARED SERVICES RECOVERY
As companies grow, there comes an increasingly difficult business challenge of providing visibility and insight into the consumption of internal costs. Shared Services Recovery creates that visibility by reengineering an organization’s internal activities into Shared Service providers while managing essential but non-core functional areas. Business organizations can request products and services from the Shared Service business segments and wil be billed a competitive rate for these services. This allows the Shared Service provider to act as a profit center positively motivating the segment to focus on efficiency and cost control.

WHY SHARED SERVICES
The ultimate goal of utilizing the Shared Services model, is to realize improved financial performance of a corporation. By billing each business segment for Shared Services, departments are forced to monitor demand, possibly foregoing requests for marginally profitable services. Organizations seeking accountability for the consumption of internal costs can positively motivate internal resources to self-intitiate this
type of accountability by applying Shared
Services methodologies.

BENEFITS OF AN EFFECTIVE SHARED SERVICES MODEL
An effectively applied Shared Services system, can control demand by holding consumers of shared services responsible for resources consumed within their organization. It also simultaneously forces business segments to evaluate the necessity of services in meeting their respective customer demands by making shared service charges an above the line expense. Shared services also improves efficiency by holding providers to a standard unit rate recovery throughout the year. Operational efficiency within the organization can then be measured by a shared service profit and loss forcing provider management to focus on continued improvements. Shared services implementation can also maximize capacity by aligning business unit capabilities to the enterprise strategy. It can eliminate investments in capacity that do not add value to the operating units or their respective customers. Lastly, the business organization is now able to compare the internal cost of the services, to industry benchmarks, in a more meaningful way, allowing the evaluation of outsourcing opportunities and improvements of internal performance standards.

IMPLEMENT SUCCESS
Proven cost methodology is key to increasing the credibility of Shared Services implementation. It also lessons the debate over validity of cost assignment within the organization. It is also imperative that an organization have detailed consumption billing data that includes volumes and rates for organizational cost management. If an organization is committed to operational improvement on an executive level success can be achieved in implementation and accountability can be facilitated across the enterprise. Contact the Armada Consulting Team for an experienced guide in Shared Services architecture and implementation if your organization wants to find out more about Shared Services or is ready to engage in a shared services initiative.

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