Driving Corporate Efficiency: The Integral Role of Shared Services in Finance and HR

In an era where efficiency, cost reduction, and strategic performance are at the forefront of corporate agendas, the importance of shared services in finance, HR, and other back-office functions cannot be overstated. Here, we look at the evolving landscape of shared services and how integrating Global Business Services (GBS) models can be a game-changer for businesses looking to thrive in a competitive market.

The transition towards centralising these pivotal functions into shared or GBS models is increasingly apparent. Adopting shared services in areas like finance and HR can fundamentally change the way businesses operate, primarily by driving cost savings and sharpening strategic focus. When these functions are centralised into shared services or Global Business Services (GBS) models, companies can benefit from reduced operational expenses due to streamlined processes and the elimination of duplicated efforts. This not only saves money but also standardises best practices across the organisation. Shared services allow businesses to concentrate their resources and energies on core activities that directly contribute to growth and innovation. By automating routine tasks and employing advanced technologies, companies gain access to valuable data and insights. This can guide strategic decisions, enhance understanding of customer needs, and enable businesses to adapt swiftly to changing market dynamics.

However, the adoption of comprehensive, broad-scale GBS models remains relatively limited. A considerable number of businesses confine their shared services to simple activities within finance, HR, and IT. This is often linked to reluctance concerning the efficacy of a centralised unit in executing high-value tasks, coupled with underlying trust issues. Nonetheless, there is growing recognition of the need to transition more functions into GBS. This shift necessitates a customer-centric service delivery approach, one that resonates closely with the nuanced needs and expectations of internal customers (Bain & Company, 2023).

Additionally, the relationship between HR and finance within an organisation is critical. Despite their distinct operational spheres, collaboration between these departments is paramount: The finance department's expertise in resource allocation to help strengthen the organisation's objectives, while maintaining a delicate equilibrium between costs and revenue complements HR's dedication to recruitment, hiring, and workforce motivation. This partnership contributes to the overarching success and operational efficiency of an organisation. (SPARK Blog by ADP, 2023).

As businesses navigate the complex terrains of market competition and operational efficiency, moving to a shared services model not only offers substantial cost benefits but also equips businesses with the agility and insight needed to thrive in a competitive market, marking it as a crucial strategy for sustainable success.

At SF Recruitment, we understand the significance of these insights for businesses striving towards operational excellence and commercial viability. This article reflects our commitment to staying abreast of industry trends and providing relevant, knowledge, helping to support businesses in their journey towards sustainable growth and efficiency.

References:
Bain & Company. (2023). How Shared Services Organizations Can Scale Up by Earning Internal Customers’ Love.
SPARK Blog by ADP. (2023). How the Collaboration Between HR and Finance Can Improve Business.