Contracting out of less important activities is an attractive way to reduce overheads. A well run shared service centre can improve operational effectiveness at lower cost.
But the model does not suit all businesses and pitfalls abound:
- Consolidating effort in one place tends to diminish rather than improve the flexibility to reduce costs quickly in difficult times.
- A 'centrist' approach can discourage innovation and stifle initiative and speed of response to change.
- Service level agreements are not infallible; performance has to be measured and managed robustly.
- Costs can escalate rapidly when new tasks are taken on board without a thorough review of how else they could be done.
Collinson Grant helps clients to avoid these mistakes. We work with managers to investigate the business case, test the options and manage the changeover of responsibilities. We design the right managerial and financial controls to ensure that savings and improvements in processes can be measured using Enterprise Resource Planning systems or other applications.
We have helped set up shared service centres and manage contracts for clients in aerospace, construction and building products, distribution, engineering services and media.