Understanding Shared Services Centers: Definition and Overview
A Shared Services Center (SSC) is an organizational unit that consolidates and centralizes business operations or services that are used across multiple departments or business units within a company. Common functions handled by SSCs include finance and accounting, human resources, IT services, procurement, and customer support. By centralizing these operations, organizations aim to improve efficiency, standardize processes, reduce redundancy, and leverage economies of scale.
The concept of shared services originated in the 1980s and 1990s, primarily in large multinational corporations looking to streamline operations. Over time, SSCs have evolved from cost-focused units to strategic enablers that provide high-quality, value-added services to the business.
Key Functions of Shared Services Centers
SSCs typically manage standardized and repeatable processes that do not require direct involvement from individual business units. Some common functions include:
Finance and Accounting: Payroll processing, accounts payable/receivable, tax management, and financial reporting.
Human Resources: Employee onboarding, benefits administration, training, and recruitment support.
Information Technology: Help desk support, software management, and IT infrastructure monitoring.
Procurement and Supply Chain: Vendor management, purchase order processing, and contract administration.
Customer Support: Call center services, technical support, and service desk operations.
By centralizing these functions, companies reduce process duplication, ensure compliance, and improve service quality.
ables better reporting, decision-making, and performance measurement.