I want to start with a confession: I once believed that shared services were the unshakeable backbone of corporate efficiency. Like a Swiss army knife - reliable, multifunctional, and always there when you need it. But lately, I’ve been wondering - is shared services still the corporate darling, or has it become the fax machine of the business world - once revolutionary, now gathering dust?
The Golden Age of Shared Services:
The good old days. Picture this, It’s the early 2000s, and companies are obsessed with efficiency. Enter shared services - a model designed to centralise repetitive, transactional tasks like HR, finance, and IT. It was the era of offshoring and business process outsourcing. Companies thought they’d cracked the code to cost savings and streamlined operations. Just stick it all in the same location and turn the handle.
I remember a former colleague, let’s call him John, who worked in finance for a multinational. He was ecstatic when the company moved to a shared services model. “It’s like magic,” he told me over coffee. “One centralised hub handles everything! Less duplication, more efficiency. We’re saving millions.”
For years, shared services thrived. They weren’t just cost-cutting machines, they were the holy grail of corporate optimisation.
The Cracks begin to show:
Then, things started to shift. The business landscape became more dynamic, and suddenly, shared services felt a bit . . . well, rigid. The pandemic came along and forced businesses to embrace remote work, automation, and agility. Suddenly, having a massive, centralised, process-driven service centre felt like driving a steam-powered locomotive in an age of Teslas.
Take the HR manager (let’s call her Kath) who spent half her career making shared services work. She once proudly told me how moving HR tasks to shared services cut costs by 30%. But when COVID hit and companies scrambled to manage remote workforces, she found herself in a nightmare of bureaucratic red tape. Employees were frustrated, leaders were impatient, and shared services felt slow and disconnected from the business reality.
The Rise of Digital and AI: the Real Game Changer:
Here’s where it gets really interesting. The same companies that once relied on shared services for efficiency are now investing heavily in AI, automation, and self-service platforms. Why? Because technology can now do what shared services were designed for - but faster, smarter, and without the headaches of centralisation.
Take chatbots and AI-powered HR platforms. A friend at a tech company (let’s call him Ken) recently raved about their new HR system. “I don’t have to email some team in another country and wait three days for an answer. The AI does it in seconds. It’s brilliant.”
That’s the shift we’re seeing - automation is making centralised human-based shared services redundant. Why would you rely on a human in a shared service centre to process an invoice when AI can do it instantly with near-zero errors?
The Agile Organisation: Flexibility over Centralisation:
Whenever I speak with business leaders, they talk about the need for agility. Businesses need to pivot quickly, make decisions in real time, and avoid bureaucratic bottlenecks. The shared services model, built on centralisation and standardisation, struggles in this fast-moving environment.
Look at startups. They don’t have shared service centres, yet they operate (mainly!!) lean, efficient, and tech-driven. They use cloud-based finance software, automated HR platforms, and decentralised decision-making. Even large corporations are taking notes - shifting from rigid, centralised models to more flexible, distributed service structures.
But wait—Shared Services isn’t Totally Dead (yet):
Before we resign shared services to the bin, let’s be clear: shared services isn’t entirely obsolete. Some companies, especially those with complex global operations, still rely on it. The model is evolving rather than disappearing. The new shared services looks less like a monolithic back-office behemoth and more like a hybrid system - leveraging AI, automation, and regional hubs rather than one-size-fits-all centralisation.
My good friend Sarah works at a FTSE 500 company, and they recently restructured their shared services model to incorporate AI while keeping specialised teams in strategic locations. “It’s a balance,” she told me. “We’re not getting rid of shared services, but we’re making it smarter and more flexible.”
The Future: a Blended Approach:
So, is shared services dead? Not exactly. It’s evolving. The new model will likely be a mix of AI-driven automation, cloud-based solutions, and smaller, more strategic human teams. Businesses that cling to the old way of doing shared services - with large centralised teams handling repetitive tasks - will struggle. Those that embrace technology and agility will thrive.
In the end, shared services isn’t dead, but it’s definitely on life support. And if it doesn’t evolve fast enough, it might just end up in the corporate graveyard next to the fax machine and dial-up internet.
What do you think? Are we witnessing the end of shared services, or is it just undergoing a radical transformation? For more excellent insights from our SSO Network, please join us for our upcoming Record to Report Virtual Summit.