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Shared Services Centre

Definition

What is a shared services center?

A shared services center (SSC) is the dedicated unit responsible to do specific operations for the company, such as human resources, IT, accounting, and payroll. They centralize a common task from different teams instead of having one for each team to have a better organization and processing. 

Shared services centers are considered internal service providers for the company. They help the main corporate team focus on growth and management aspects through handling these operations. 

Shared services center characteristics

The specific characteristics of a shared services center may vary depending on the requirements they need to do a task. However, they should at least have standard processes, infrastructure, manpower, and compliance to operate. 

For instance, an accounting department should have specific processes for handling account payables, receivables, financial statements, tax filing, and payroll. At times, businesses consult an external provider for their shared services.

What is a shared services centre
Shared services center characteristics

What is a financial shared service center?

Within an organization, a financial shared service center acts as an independent service provider. Shared services centers are supported by user fees and contractual arrangements with other business units in their company as independent service providers.

Pros of financial shared service center

Here are some advantages of financial shared services centers:

Performance-driven culture

The majority of businesses do not utilize KPIs to track the operations of their internal finance and accounting departments. Those who do prefer to concentrate on traditional, outward-facing KPIs such as accounts receivable days and accounts payable days. 

With SSCs, the entire strategy changes. Finance and accounting functions are administered as a service, with efficiency and productivity metrics taken into consideration.

In SSCs, the most common KPIs are the number of invoices per full-time equivalent (FTE). FTE cost as a proportion of revenue, percentage of mistakes, and the number of manual inputs. Organizations can find opportunities for improvement and automation by continuously monitoring these KPIs.

Managerial skills

Finance professionals in many places complain about the difficulty in obtaining the necessary skills and experience. By placing activities in countries with a large talent pool, centralization of finance and accounting processes can effectively solve some of these challenges.

An organization with a low overhead

The transition to an SSC model forces businesses to reconsider their whole business strategy. It’s an opportunity to consider not just how to execute particular activities more effectively, but also if they’re necessary at all.

Benefits of shared services center

Since the workflow is similar across business divisions, many companies have discovered the benefits of adopting shared services. As financial operations must comply with compliance and laws, their approach may and should be standardized.

Shared services centers may also offer significant information from deep data analytics that assist decision-making with the use of automation technologies. 

Here are some benefits of acquiring shared services for your business:

Increased employee efficiency

Your company will be able to get the most out of its technological investments, maintain control, and reduce labor expenses for acquiring shared services. 

Standardize business operation

Business operations should be standardized across the board, and you can enhance the company’s capabilities and create best practices using a shared services center. From data management to reporting insights, each process will follow the same predefined path from start to finish.

Monitor return on investment

The accomplishments of the company are all measured through data and analytics. You can quickly determine your return on investment by comparing past data and industry benchmarks to your own KPIs.

Outsourcing FAQ

What is Business Process Outsourcing (BPO)?

What is Business Process Outsourcing BPO?

Business Process Outsourcing (BPO) is the engagement of services from a third-party provider. BPO uses various technology-enabled services to hasten the delivery of services. The business activities could be back-office such as, but not limited to, payroll, accounting, human resources, or front office jobs like customer service, sales, and marketing, etc. In the case of content providers, these business activities could mean hiring writers, remote editors, or virtual assistants.

BPO speeds up processes and enhances efficiency. Companies that outsource some of their business activities use their time on core services and competencies. With this shift in focus, companies improve their current processes that may result in improved customer satisfaction. BPO helps companies divert their resources to more critical business strategies. Often, companies find it impractical to hire a full-time position in-house because of the cost associated with doing so.

How does Business Process Outsourcing work?

When a business engages an external specialist to manage and operate some of its internal processes, it's referred to as business process outsourcing. Such ‘processes’ include customer service, accounting and finance, or sales. It is different from hiring an agency to do specific tasks, as the outsourcing provider (BPO) is more concerned with the ongoing production of labour-intensive tasks, instead of the higher-level strategy and guidance.

Now, business process outsourcing has broadened and is more akin to staff augmentation, or staff leasing.

What are the benefits of business process outsourcing?

There are many benefits to outsourcing, as well as some downsides and risks. The common benefits include:

Cost savings: significant savings of up to 70%, leveraging the lower global salaries Global market: access to a bigger employment pool of talent Global presence: having operational across the globe increases trade opportunities Flexible workforce: reduces internal local labour and employment compliance obligations Leverage skill: leveraging the skills of other specialist companies Focus: enables the client company to focus on their core functions

 

Business process outsourcing examples

The business process outsourcing sector is a vast industry, generating over $200bn annually, and employing many millions of people worldwide. Some examples include:

Big enterprise

Facebook and Uber outsource many of their operational functions, including content moderation for Facebook, and customer service for Uber

Medium-size businesses

A medium business with 50-500 staff might outsource the labour-intensive accounting and finance functions to a team in the Philippines.

Small business and entrepreneur

It is common for small business owners to have a Virtual Assistant (VA) working for hem full time, remotely from the Philippines.

What are the different types of BPO?

The type of business process outsourcing can be characterised by their specialisation, location, and size.

Generalist or specialist BPOs

Business process outsourcing is in the human resources and professional services sector. However, their services extend across all industries. The majority of BPOs are generalist, in that they offer a full range of professional services, although some specialise in certain verticals (ie accounting, or animation).

Location

Business process outsourcing typically operates form developing nations such as the Philippines, India, and Colombia. They typically have cheaper cost-of-living and bigger populations. Different locations offer different advantages.

Size of BPO

The bigger BPOs employ more than 250,000 people. They are huge, global operations. Medium-sized BPOs range from 500-5,000 staff and offer a full range of services. The smaller BPOs might have 1-500 people.

Functions of business process outsourcing

Collectively, business process outsourcing provides any kind of staffing solution. Common functions of BPO include:

Finance and accounting: operational, technical and specialist functions Healthcare: various functions of the backend of the healthcare and health-insurance industries Creative and content: everything from post-production of Hollywood movies to newspaper and website content Tech, IT and development: network management, web and app development and maintenance Sales & customer support: ongoing sales and customer operational support and delivery Marketing: ongoing marketing, communication and branding activities Talent and HR: externalising the management of company HR, recruitment and compliance Administration: general business administration and operational activities Top BPO companies in the world's top outsourcing hubs

A wide range of BPO companies in different parts of the world provide utmost services to their Western and local clients. Many of them have even earned awards and recognitions by award-giving bodies due to their performance on both the roles they take and on their way of taking care of the employees.

Check out the top BPO companies in several outsourcing destinations below:

Top BPO companies in the Philippines Top Indian BPO companies Top South African BPO companies Business Process Outsourcing (BPO) services

Outsource Accelerator is the most trusted source for independent information & advisory for Business Process Outsourcing (BPO). We have over 4,000 articles, 200+ podcast episodes, and a comprehensive directory with 700+ BPOs… all designed to make it easier for clients to learn about, and engage with, business process outsourcing.

What is Shared Services?

What is shared services

Shared services refer to the delegation of specific tasks to a part of the organization or company. This team might house inside the main office, near it, or offshore. For instance, a company based in California may set up an IT department in another location such as New York to handle the entire IT for their teams.

Shared services is another way to save on costs by taking advantage of the cheap costs and resources offshore. It is also a strategic way to expand their operations and attract a different market aside from the local ones. 

Shared services and outsourcing

Shared services and business process outsourcing share a few similarities. For one, they delegate a general task to a team. Second, both of it can be onshore, nearshore, or offshore. Third, they help the business save on costs while increasing their profitability. The only difference is that outsourcing involves a third-party company. After a certain lock-in period, companies can decide whether to absorb their offshore team or keep it co-managed.

What is Finance & Accounting?

What are finance and accounting?

Finance and Accounting are two aspects of a business that work together. It is all about keeping track of financial records and transactions. 

These transactions are recorded and balanced using accounting standards. The financial report is where all the transactions can be found and are then presented to the management team or client. 

This is essential in any form of companies or corporations as reports about finance and accounting will measure the return on investment, assets, and liabilities the company has.

However, did you know that there is such a thing as finance and accounting outsourcing? It is now one of the best digital resources expanding in the online world. Many businesses are looking for ways to save costs. 

One specific way to do that is by hiring somebody who can do finance and accounting offshore. This process can be incredibly beneficial for both clients and employees.

Finance and accounting BPO trends

Companies are increasingly seeing outsourcing as a solution to every problem — whether to gain access to a specialized workforce, perform large-scale tasks, or drive the company’s development.

Here are several accounting and financial trends that an outsourcing company could help you get in line with:

Real-time visibility

Updating your books every time a transaction occurs takes a lot of time. Outsourcing firms can do this and deliver real-time top-quality data back to clients.

Tax help

Most outsourced accounting firms include tax prep and advisory among their core services. By relying on the same to handle all your financials, there is a developed synergy between your tax prep and accounting.

Budgeting and forecasting

For companies who lack the time and resources to handle complex budgeting and forecasting, outsourcing firms can put world-class accountants in charge of the effort.

Performance dashboards 

Dashboards compile and update your key performance indicators (KPIs) in one place so that company leaders have access to the information anytime.

Outsourcing firms can set up and maintain dashboards for clients eager to act based on insight rather than intuition.

Cloud migration 

Shifting your services to the cloud looks more important than ever nowadays. Outsourcing firms can handle technical, financial, and operational matters to make the migration easier and reliable.

Outsource finance and accounting

This is the reason why outsourcing became a trend and a wise alternative for businesses. It has become the go-to service to leverage businesses in reaping the benefits of working with trustworthy and skillful finance and accounting outsourcing companies

Most outsourcing companies have an experienced recruitment team that is capable of hiring individuals that are adept and experienced in the field of finance and accounting.

Outsource Accelerator provides you access to great finance & accounting specialists that you can outsource from the Philippines starting from $6 per hour, where you can save up to 70% on staffing costs. 

We have over 5,000 articles, 350+ podcast episodes, and a comprehensive directory with 2500 BPOs… all designed to make it easier for clients to learn about, and engage with finance & accounting outsourcing.

What is Standard Operating Procedure (SOP)?

What is a Standard Operating Procedure

Standard Operating Procedure (SOP) is a set of instructions that explains how to do a critical process or workflow. Its purpose is to follow processes according to the standards of a company, organization, or industry. This helps to protect the employees, processes, and customers from errors throughout a normal workflow and create a safe work environment for the company. 

SOPs are sometimes required for compliance with the industry regulations while some institutions suggest them as a company’s best practice. This is mostly used to maintain safety and efficiency in different departments such as production, sales and marketing, customer support, finance, and legal.

Standard Operating Procedure template

For small teams and solopreneurs, SOPs are made through writing a checklist of routines that should be done. For bigger enterprises, thorough planning and taking note of processes are needed to ensure proper carrying of procedures. The integral parts of an SOP are the roles that will do the task, the frequency or how often will they do it, and the expected outcome or the deliverables in finishing the task.

SOPs in BPO companies have different standards. Their SOPs need to include compliance with administrative policies, metrics on performance management, and training and coaching sessions. 

Outsource Accelerator provides you the best outsourcing companies in the Philippines, where you can save up-to 70% on staffing cost. We have over 3,000 articles, 200+ podcast episodes, and a comprehensive directory with 700+ BPOs… all designed to make it easier for clients to learn about, and engage with, outsourcing.

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About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

The #1 outsourcing authority

Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 350+ podcast episodes, and a comprehensive directory with 900+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.