25 Sep

It Shared Services Agreement

Large-scale transformation of culture and processes can be an essential component of the transition to common services and involve redundancies and changes in work practices. It is argued that transformation often leads to a better quality of employees` working lives, although there are few case studies that support this approach. Internal customers must then indicate their own service needs. Suppliers must meet their requirements and suppliers will have their performance evaluated on the basis of specific, easily measurable criteria. If executed correctly, the shared services approach harnesses the benefits of centralization and combines them with decentralization. Traditionally, the development of a shared services organization (SSO) or a shared service center (SSC) within an organization is an attempt to reduce costs (often through economies of scale), standardized processes (through centralization). A reference study of the Global Service Center[6] by the Shared Services Network (SSON) and Hackett Group, which surveyed more than 250 companies, showed that only about a third of participants were able to achieve cost savings of 20% or more with their SSOs. At NASA, the move to a shared services model in 2006 generated savings of nearly $20 million per year. In addition, NASA`s shared services center is expected to save a total of more than US$200 million by the organization`s end of 2015, according to NASA`s director of service delivery.

[7] Shared services are more than the centralization or consolidation of similar activities in one place. Shared services can mean running these service activities like a business and providing services to internal customers at cost, quality, and timeliness, who are competitive with alternatives. The agreement should also specify the conditions under which it can be terminated, who can take that action and other details about it. A common service is required if two or more units of the company use the same service or utility. There are two main objectives of a common services agreement – the scarcity of resources and the standardization of the process. If there is a lack of resources to have separate utilities or resources for a given service, it makes sense to share the utility among different entities that benefit from it. Another reason for sharing a service is to improve efficiency by standardizing the service or utility in different business units. This will make the service more efficient and thinner. Also, you shouldn`t reinvent the wheel when writing your deal. Use existing templates when designing your agreement. There are many options you can use for your common services agreement.

The UK government is working on a comprehensive plan to realize the benefits of shared services, as part of a central system of efficiency according to Gershon`s review. The Cabinet Office has set up a team specifically tasked with speeding up reception and developing the strategy for all government departments to bring people together and consolidate. The potential savings of this transformation in the UK public sector were initially estimated by Office at GBP 1.4 billion per year (20% of the estimated cost of HR and finance functions). In its November 2007 report[10], the National Court of Auditors (United Kingdom) indicated that this amount of GBP 1.4 billion did not contain a clear cost base and contained several uncertainties, such as. B initial expenditure and timing of savings. It is sometimes argued that there are three basic location options for a common service, including: The Northern Ireland Civil Service (NICS) has implemented common services for a number of departments and functions. . .


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