Shared service centres generating 8 per cent productivity gains

Will Green is news editor of Supply Management
23 March 2015

The time it is taking to recoup the costs of transferring functions to a shared service centre (SSC) has fallen from 2.6 years in 2013 to 2.3 years in 2015, according to research.

Deloitte’s Shared Services Survey for 2015 shows SSCs are generating productivity gains of 8 per cent a year and 71 per cent of respondents are looking to increase the number of functions within their SSCs in the future.

The majority of SSCs are multi-function (60 per cent), while 40 per cent are single function, with finance, human resources and IT the most common functions.

Nick Prangnell, global business services consulting lead at Deloitte, said: “The shared services model is more diverse and more mixed than ever before. Despite this complex backdrop, 91 per cent of respondents to Deloitte’s latest Shared Services Survey suggest this business operation has had a positive impact on cost reduction, with an average payback of 2.3 years.

“Two-thirds of shared services organisations currently operate across many locations, are multi-functional, and serve multiple businesses. They continue to deliver results at regional, national and global levels with an average annual productivity increase of around 8 per cent.”

The research found the majority of respondents (34 per cent) had one SSC, followed by 17 per cent with two and 16 per cent with three. Some 11 per cent had more than five.

The survey shows the number of SSCs in the Asia-Pacific region has increased by 42 per cent compared to 2013, compared to 25 per cent in Eastern Europe, 14 per cent in India and 7 per cent in Latin America. The number of SSCs in Western Europe has dropped by 16 per cent and in the US by 17 per cent.

The survey had responses from 311 firms across 35 countries involving more than 1,000 SSCs, with manufacturing accounting for the majority of respondents (27 per cent).

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