Shared Services Reduce Costs, Improve Performance

Companies should consolidate their support services in a centralized shared services organization and measure its performance against that achieved by external vendors, according to a new Deloitte Consulting study.

The study, titled Shared Services: Learning From Success, was conducted in conjunction with International Data Corp. Study participants ranked cost reduction as the primary driver for creating a shared services organization, followed by the desire to increase operational flexibility and improve customer service. On average, respondents reported a 27-per-cent return on investment as a result of consolidating support services.

The success of a shared services implementation begins with a detailed business case and a strong focus on measuring its performance, says Steve McCaughey, a Deloitte Consulting senior manager in Toronto, in a prepared company statement.

“The shared services organization must have detailed pricing, customer service and performance measurements that show it can compete against outside suppliers. Otherwise, the entire shared services organization could find itself out of business,” McCaughey says.

The outsourcing option appears to be gaining popularity. According to the study, 58 per cent of respondents currently outsource some or all of their support processes, or would consider doing so in the future. The most popular functions to outsource are payroll (outsourced by 17 per cent of respondents), IT support (11 per cent) and accounts payable (9 per cent).

More information about the Deloitte Consulting study can be found at