Shared services centres take on more functions in developing economies

Companies are expanding their shared services centres geographically and each centre is increasingly taking on multiple functions, according to Deloitte research.

The 2015 Deloitte poll of more than 300 respondents operating more than 1,000 shared services centres worldwide suggested that language difficulties, skills shortages, time zone differences, and regulatory requirements no longer keep companies from finding talent in developing countries, including new markets in Africa and the Middle East.

During the past two years, companies increased the number of their shared services centres in developing economies. In 2015, 17% had shared services centres in Asia Pacific (12% in 2013), 16% in Latin America (15% in 2013), 10% in Eastern Europe (8% in 2013) and 8% in India (7% in 2013).

The number of shared service centres in developed economies decreased by five percentage points in Western Europe (27% in 2015) and four percentage points in the US and Canada (19% in 2015).

As shared services centres spread geographically, they also took on more functions. Survey respondents reported that the number of shared service centres with more than three functions rose by more than 40% since 2013.

Companies continue to see strong value from leveraging the shared services model, Noemie Tilghman, principal at Deloitte Consulting, said in a statement. But “while there may be no single right answer or one-size-fits-all solution, there are critical elements and lessons to be learned from others who are more mature in this space.”

The Deloitte survey also tracked the following trends:

• Geographic barriers are decreasing and companies are transitioning from developed to emerging markets when they decide on the location for shared services centres.
• Companies are adopting shared services models that incorporate a mix of multi-function, multi-location, multi-region, multi-business, and multi-sourced.
• Business unit customers are asking for more, including faster response times and better cost of service. And companies are leveraging service-level-agreement conversations and scorecards for shared service centres to focus time and energy on continuous improvement.
• Companies are following disciplined approaches to gain greater headcount savings and productivity improvements.
• Companies are enhancing shared services centres by dedicating teams and training resources. Also, as shared services centres take on advisory and collaborative responsibilities, they will be challenged to become more familiar with the business.

Related CGMA Magazine content:

“Ten Tips for Implementing Shared Services”:  The benefits of moving a process to a shared services centre can be substantial in the right circumstances, according to Ravichandran Venkataraman, ACMA, CGMA, senior vice president and head of the Global Services Division at Hewlett-Packard.

—Sabine Vollmer (svollmer@aicpa.org) is a CGMA Magazine senior editor.