Shared Services is different from the diametrically Cialis Jelly opposite model of Outsourcing, which is where an external third party is paid to provide a service that was previously internal to the buying organization, typically leading to redundancies and re-organization.

There is an on-going debate about the advantages of Shared Services over outsourcing. It is sometimes assumed that a joint venture between a government department and a commercial organization is an example of Shared Services but in fact they are quite different.

The joint venture involves the creation of a separate legal commercial entity (jointly owned) which provides profit to its shareholders. It is difficult to see what is being shared rather than bought. Such joint ventures are really a form of outsourcing.

One purpose of Shared Services is the convergence and streamlining of an organizations functions to ensure that they deliver to the organization the services required of them as effectively and efficiently as possible. This often involves the centralizing of back office functions such as HR and Finance but can also be applied to the middle or front offices.

A key advantage of this convergence is that it enables the appreciation of economies of scale within the function and can enable multi-function working (e.g. linking HR and Finance together), where there is the potential to create synergies.

A large scale cultural and process transformation can be a key component of a move to Shared Services and may include redundancies and changes of work practices. It is claimed that transformation often results in a better quality of work life for employees although there are few case studies to back this up

Shared Services are more than just centralization or consolidation of similar activities in one location. Shared Services can mean running these service activities like a business and delivering services to internal customers at a cost, quality and timeliness that is competitive with alternatives.

The case against shared services includes being a disruption to the service flow; moving the work to a central location, creates waste in handoffs, rework and duplication), lengthens the time it takes to deliver a service and consequently creates failure demand (demand caused by a failure to do something or do something right for a customer).

A back office is a part of most corporations where tasks dedicated to running the company itself take place. The term comes from the building layout of early companies.

This is where the front office would contain the sales and other customer-facing staff and the back office would be those manufacturing or developing the products or involved in administration but without being seen by customers. Although the operations of a back office are usually not given a lot of consideration, they are a major contributor to a business.

Examples of back-office tasks include IT departments that keep the phones and computers running (operations architecture), accounting, and human resources. These tasks are often supported by back-office systems: secure e-commerce software that processes company information (e.g. a database). A back-office system will keep a record of the company’s sales and purchase transactions, and update the inventory as needed. Invoices, receipts, and reports can also be produced by the back-office system.

In banking, the back office includes a heavyweight IT processing system that handles position keeping, clearance, and settlement. In investment firms, the back office includes the administrative functions that support the trading of securities, including record keeping, trade confirmation, trade settlement, and regulatory compliance. If used in sales, the back office would include functions that fulfill customers orders and would usually include the duties involved in customer-support call centers.

Back offices may be somewhere other than the headquarters of a company. Much of the time they are in areas and countries with cheaper rent and lower labor costs. Back office functions can be outsourced to consultants and contractors in any country.

Author Bio: Tom Mann

Business Operations Director who creates incredible overhead savings in: property leasing, employee benefits expense, equipment, office supplies, vendor contracts, phone systems/cell phones, general utilities, fixtures, facilities, fleet vehicle expenses, insurance policies, site cleaning – EVS cost, parking, landscaping/grounds.