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Why Public Sector Organizations Need a Shared Services Center

Posted by  Marco Rolla

When public sector organizations share back-end services like HR or payroll, they are able to save important resources -- like money and manpower -- which can then be reallocated to customer-facing work. There are several ways that public sector organizations can share services, and one of the most effective is via a shared services center.

A shared services center, or a central location where services are completed, is an efficient solution for cutting administrative and manpower costs for public sector organizations. The following benefits show why most public sector organizations should consider moving to a shared services center model.

Share Top Talent and Best Practices

When public sector organizations share a services center, they all have access to the same top talent that performs tasks at that center. This ensures that all organizations involved benefit from top-level staff, and that each organization takes advantage of best practices that have been proven to work for other organizations.

Faster and More Efficient

Shared services centers are created to serve internal organizations. Because they are, by definition, service based, shared services centers respond to organizational needs much quicker than an organization's employees with other responsibilities can. The result is that problems are fixed more quickly and the fixing process is much less disruptive to normal workflow.

Economies of Scale

Shared services centers are designed to deliver economies of scale. They are able to do this for individual organizations by leveraging purchasing on a global or national basis, for example. This means that organizations can cut costs and increase production -- resulting in more income and resources to allocate for other uses.

Improved Productivity

Because shared services centers deliver economies of scale and standard business processes, they are able to help improve productivity for public sector organizations, while also cutting costs. Deloitte Consulting recently conducted a global shared services survey and found that more than 90 percent of respondents achieved consistent annual productivity improvements after moving to a shared services center model. Also, around 70 percent said they saw at least 5 percent improvement each year.

Help With Multiple Services

Using a shared services center can help with simple, standardized, universal administrative duties, like payroll and HR. However, shared services centers can go beyond simple back-office administration. They can help public sector organizations with multiple operational tasks, including accounting, legal, purchasing, security and IT, which can further relieve internal employees of administrative duties, and allow them to have more energy and time to do customer-facing work. Many public sector organizations are choosing to use shared services centers for multiple functions. Over the past two years, the number of shared services centers with more than three functions has increased by more than 40 percent.

Spur Process Change

Shared services centers help improve productivity by affording organizations more time and manpower, but they can also serve as a catalyst for business process change. Moving services to a central location can help remove old, outdated and bureaucratic processes, and introduce new technology into public sector offices.

Marco Rolla

Marco is an industry researcher who focusses on global business, finance and the public sector. Marco aims to free service organizations from excessive administrative work.