Shared Service Center: local, regional or global?

While establishing a shared service center, the important question is, whom this entity is supposed to bring their services to? Will there be single countries, regions or maybe group-internal clients operating world-wide?

Therefore, the are three forms of shared service centers from this point of view:
- local,
- regional,
- global.

The concept of a global shared service center is very interesting. It offers high efficiency as it can be established in such a geographical location where the best practice processes can be realized in the most efficient way, assuring the optimal cost structure. However, the transition costs connected with the migration into one global location can be reasonable. Except of that there are many processes and sub-processes which have to be offered locally for legal and/or organisational reasons.

In practice, most corporations use a heterogenic model, having all: local, regional and global shared service centers. Let's take Hewlett Packard as an example: they have one global shared service center in Bangalore dealing with asset accounting services for the wholle group. Except of that, the HP Group has some regional shared service centers located world-wide.

Magdalena Szarafin
http://www.szarafin.info

Tags: Magdalena Szarafin, shared service, shared service center, shared service centers

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Comment by Pooja Sharma on July 13, 2009 at 11:57am: Thanks a lot Magda ! have downloaded it, will go through it today... thanks again !

Comment by Magdalena Szarafin on July 4, 2009 at 8:25pm: Dear Pooja

Thank you once again for your interest in my writing on shared service centers. As many other people have also asked about this article, I have decided to post a blog, which you can download the full version of the article from.

Best regards

Magdalena Szarafin
http://www.szarafin.info

Comment by Pooja Sharma on July 3, 2009 at 4:49pm: Dear Magdalena , Thanks for the info. I tried to access the link but it says "To access these articles and whitepapers, login in with your Basic or Premium membership." please share, if you have posted that article anywhere else !

Comment by Magdalena Szarafin on June 28, 2009 at 7:28pm: Dear Pooja

Thank you for your inquiry. Yes, there is a material difference between a shared service center and the BPO concept: the essence of a shared service center is to outsource (or: insource) some functions, which are not our core competencies (back-office functions for instance) to an internal provider while at BPO you let work done by an external provider. While implementing a SSC you practically establish a new entity within your group, this entity belongs to the group and serves other subsidiaries and/or headquarters.

Of course, for an SSC to be established, the group must be a group, it has to consist of minimum 2 entities.

For more information about SSC vs. BPO see also my article:

Magdalena Szarafin: “Factory of numbers” as an alternative to the t...

I hope, I could help you?

Best regards

Magdalena Szarafin
http://www.szarafin.info

Comment by Pooja Sharma on June 28, 2009 at 5:30pm: Interesting information ! i some how get confuse between a shared service center and a BPO.. what is the exact difference? How would we call a center a shared service center and not a BPO .... are captive BPO shared service centers...