Shared Service Center Factors and Return on Investment

Abstract

Many businesses today face enormous competition on both national and international levels. Companies are increasingly looking for realizing the benefits of shared service centers. A new way of organizing back office functions is being implemented across companies worldwide. This novelty called shared services has taken over as the most discussed topic in the last fifteen years and it is likely to stay with us for some time to come. It is advisable to explore a shared service center and to find out its benefits. Research methodology was a single case study and literature analysis. The shared service center conception enables the understanding of main focused areas to be taken in the consideration before migrating main business operations. A clear view has to be given to either outsourcing operations or establishing a shared service center. Prime targets depend of corporate objectives, risk assessment, and potential return on investment (ROI). ROI was calculated based on authentic shared service center figures. Bergeron (2003) presents a different way to calculate ROI. He notes that return can be taken as a profit or income figure. And that makes sense as at the beginning of implementation a shared service center works with none or small level of profit. Research has shown the evidence about the importance of the main factors that influence the choice to establish a shared service center. And the research has not agreed with the theoretical argument that the reduction of cost is the most important driver before establishing a shared service center as there are many more not less important drivers for a shared service center creation. The main keys to success regarding the shared service center ‘X’ evidence, in order of importance, are increased business value, cost savings, controls and continuity, customer service, and high quality. DOI: http://dx.doi.org/10.5755/j01.ss.83.1.6866