Shared Service Organisations (SSOs) have historically been set up globally to drive cost reduction, establish reliability, and improve service quality efficiencies. While SSOs continue to serve this objective for large number of organisations globally, some organisations have leveraged their SSOs to be a strategic business partner. The scope and influence of SSOs has transformed over the years from a discrete shared services model to a global business shared service model toward leveraging the potential of being an integrated business service provider. With over 80% of global fortune 500 companies having set up an SSO, the value derived is plain and clear.
Organisations headquartered in North America and Western Europe lead the adoption of Shared Services, followed closely by the APAC. In the GCC, the benefit that shared services can provide and the role it can play in improving internal efficiencies is fast catching the attention of most CXOs.. With volatility in oil prices, cost management is becoming a key focus area for many corporates in the region.
The approach of the Manufacturing & Process Consulting Practice at Frost & Sullivan to Shared Services optimisation is to continually-work towards ‘Reduction in Business Shared Services costs as a Percentage of Total Revenue’ of an organisation. Frost & Sullivan believes that Shared Services exist to enable businesses, as a strategic partner.
According to leading studies on SSOs, organisations have gained a 30-35% reduction in labour cost and the ROI is just about 2 – 2.5 years. Companies typically see a 25-30% improvement in process efficiencies, a significant improvement in ERP utilisation, process standardisation and business leaders see it as an enabler to growth and business decision making.
Mr. Gowtham Sivabalan, Associate Director – Manufacturing & Process Consulting Practice, Frost & Sullivan notes, “Some of the organisations in the GCC have been forward looking and have a SSO already in place but most of them are at the level of an internal discrete shared service or multi-function shared service. These organisations can expect an additional 10-15% cost benefit by optimising their current shared services model and upgrading it to a global business service or an integrated business service provider.”
The GCC is fast expected to be a key Shared Services market due to the potential it holds for regional corporations, government and government related service entities through areas of workforce nationalisation through job creation and establishing a local presence.
Frost & Sullivan is presently working with a leading business group in the Kingdom of Saudi Arabia in to design and build a shared service organisation with a clear objective of reducing the cost of internal services, improve service quality, efficiency, and accountability, ultimately supporting business growth. The expertise to provide a rapid and accurate assessment is enhanced by our customised offering capabilities. Robust and objective internal scoring models and templates enable the swift provision of expert recommendations. The cross-functional team further deploys its expertise to address client’s challenges and produce practical and measurable solutions.
Frost & Sullivan areas of expertise –
- Consultation and strategic assessment
- Benchmark your current performance relative to peers and world-class performers
- Simulate and build an optimal shared service model
- Build–Operate–Transform- Transfer your Shared services
Is your Shared Service Organisation optimised to deliver business benefits? Are you adopting the best practices in your SSO? To find out more about our Shares Service expertise, please write to Gowtham Sivabalan, Associate Director – Middle East, North Africa & South Asia @ GowthamS@frost.com.
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