Shared Services

ˈšerd ˈsɝː.və.səz / Shared Services


Shared services is a collaborative practice that involves the centralization of a company's existing administrative functions that were previously segmented into separate divisions.

These back-office operations form an independent business unit (shared services center) that supplies services to various departments in an organization.

In the shared services model, the new business unit transforms into an internal service provider. Its management structure must promote efficiency, cost-effectiveness, and service improvements for the internal customers in the same organization.

Shared services may cover administrative functions such as finance, inventory, information technology, recruitment, and payroll.

Organizations that practice shared services usually have significant cost savings and more control over results, thereby allowing them to get high-quality work.

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