Purchasing plays growing role in shared services

26 April 2011

26 April 2011 |  Adam Leach

Procurement activity is increasingly included in the work of shared service centres as companies look to cut overheads and increase efficiency.

According to a survey of 270 companies worldwide conducted by consultancy Deloitte, 47 per cent of firms have moved to centralise their purchasing processes by incorporating them into company-wide shared service centres. This shift has enabled 91 per cent of businesses to cut costs by reducing overheads, with 29 per cent of respondents claiming to have made significant reductions.

 Centralisation has also had a positive impact on processes, with 87 per cent of respondents reporting an increase in efficiency. In addition, 81 per cent of companies saw an improvement in the quality of their processes.

The accompanying report also identified, in cases where shared service centres have been introduced, that the transformation would have benefited from stronger executive support, better change management and greater alignment between processes and technology.

Susan Hogan, principal at Deloitte, said that when moving processes to a shared service centre “the power of the organisation's culture cannot be underestimated or ignored”.

Construction company Balfour Beatty recently announced it is spending £12 million to set up a UK-based shared service centre, and expects the benefits – which include savings from procurement – to recoup that investment by the end of 2012.

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