Building a Modern Shared Services Center: Strategies for Success

In a rapidly evolving business landscape, establishing a modern Shared Services Center (SSC) has become a strategic imperative for organizations seeking efficiency, scalability, and cost-effectiveness. In the recent webinar titled “Setting Up a Modern Shared Services Center,” hosted by SSON and K&B Global, experts Carla Sarti and Robert Berkowitz shared their insights on creating a successful SSC using the metaphor of building a house—a process that requires a solid foundation, a thoughtful blueprint, and precise execution.

The Foundation: Strategic Planning

Laying a strong foundation begins with aligning the SSC’s goals with the broader organizational strategy. Whether the primary aim is labor cost arbitrage, centralizing functions for better data analytics, or enabling digital transformation, clarity of purpose is critical.

Carla emphasized the importance of engaging leadership at all levels: “Securing buy-in from the C-suite ensures alignment and sets the tone for the SSC’s success.” According to industry reports, organizations with clear strategic alignment are 30% more likely to meet or exceed their SSC goals.

The Blueprint: Designing the Operating Model

An effective SSC requires a well-thought-out operating model that outlines service delivery, governance structures, and stakeholder engagement. Robert noted that successful models often adopt a hub-and-spoke structure, balancing global efficiency with local responsiveness. Governance models, frequently overlooked, play a vital role in ensuring stakeholder needs are met.

The speakers also stressed the significance of change management. Studies indicate that poor change management contributes to 70% of failed business transformations. Robert highlighted the need for a robust communication plan: “Effective change management reduces resistance and builds trust among employees.”

Process Optimization and Technology Integration

Before diving into automation, organizations must standardize their processes. This step minimizes redundancies and ensures a smoother transition to technological solutions like AI and machine learning. Robert shared a practical approach: “Eliminate unnecessary tasks, consolidate workflows, and then automate. Too often, companies automate inefficiencies, which leads to minimal gains.”

Statistics underscore this point: companies that optimize processes before automation achieve 20-30% higher efficiency gains. Technologies like robotic process automation (RPA) and AI can further enhance outcomes, but only when supported by clean, standardized data.

Location Strategy and Talent Considerations

Selecting the right location for an SSC is another critical decision. Factors like cost, talent availability, and infrastructure must be balanced. The webinar highlighted Latin America as a growing SSC hub, with 50% of webinar attendees considering the region due to its proximity to the U.S., cultural alignment, and skilled workforce.

For example, countries like Mexico and Colombia have become hotspots for STEM and business talent. Organizations in these regions report up to 25% cost savings compared to U.S. operations. However, companies must also consider local economic and political stability to mitigate risks.

Monitoring Success Through Metrics

Continuous monitoring and maintenance are essential for SSC sustainability. Effective KPIs should align with business objectives and provide actionable insights. Robert cautioned against the “watermelon effect,” where metrics appear green on the outside but reveal underlying issues upon closer inspection.

Key metrics such as cost efficiency, process accuracy, and client satisfaction should be revisited regularly. Client satisfaction surveys, often neglected, can provide valuable feedback for improvement. According to SSON’s data, organizations with a strong focus on metrics report 40% higher client satisfaction.

Integrating Key Takeaways

The session provided actionable insights throughout:

1. Start with Strategic Clarity: Define clear goals and secure leadership commitment. Aligning SSC objectives with organizational strategy increases success rates by 30%.
2. Tailor the Operating Model: A hub-and-spoke structure and robust governance create scalability and responsiveness, addressing diverse stakeholder needs.
3. Prioritize Standardization: Standardized processes lay the groundwork for effective automation, boosting efficiency by up to 30%.
4. Leverage Strategic Locations: Latin America’s talent pool and cost advantages make it a compelling choice for SSC operations.
5. Use Metrics Wisely: Focused KPIs and actionable insights prevent stagnation and drive continuous improvement.

Conclusion

By viewing the creation of an SSC as analogous to building a house, the webinar offered a clear and relatable framework for attendees. From laying a strategic foundation to monitoring long-term success, every step is crucial. As the speakers concluded, “A well-built SSC becomes a strategic asset, driving efficiency and innovation across the organization.”