A shared services model: the key to a more efficient organization

Enterprise Service management (ESM) helps break down siloes between service departments, creating a more efficient and collaborative approach to customer support. By streamlining customer support across the business, organizations can solve problems faster, communicate more effectively, and deliver greater value to customers. The shared services model takes this concept a step further by restructuring your organization to create a single, centralized support provider for employees. This model aims to consolidate services into one unified organization, offering a more efficient and cost-effective approach. In this blog, we’ll dive into what the shared services model is, explore its benefits for your organization, and provide practical steps on how to implement it successfully.

What is a shared services model?

The shared services model centers around bringing together key support functions like HR, IT, and finance into one unified team.

If you’re as old as I am, you’ll remember the classic centralization versus decentralization debate – is it better to have one centralized, organization-wide IT department or to have separate, decentralized IT teams within each individual department (HR having its own IT team, for example)? Eventually, centralization emerged as the best way to deliver high-quality services and support at the best possible cost.

The shared services model is a further extension of the centralized model – this time, consolidating various business function support capabilities into a single organization-wide support entity. This could include HR (and payroll), facilities, finance, IT, legal services, governance, risk, and compliance (GRC) teams, procurement, security, and other business function support capabilities that serve the whole organization.

The goal of a shared services model is simple: optimize processes, reduce redundancies, and deliver consistent, high-quality service across the entire organization. Unlike traditional models that either centralize control or decentralize flexibility, the shared services model strikes a balance, combining the strengths of both approaches. By sharing resources and technology, departments work more cohesively, creating a more agile and responsive organization overall.

Key benefits of a shared services model

Implementing a shared services model has many benefits:

First and foremost, it ensures greater accessibility and consistency of services, offering both employees and customers a seamless, high-quality experience across the organization, no matter which specific service department is needed.

A shared services model also reduces redundancies and optimizes resource use, meaning organizations can drive significant operational efficiencies and cut costs. It encourages improved knowledge sharing, breaking down silos and fostering a culture of collaboration.

But most importantly, a shared services model allows your organization to build its service and support capabilities around employee wants and needs – and not those of the individual service providers as has been the case historically. This simplification of support benefits both employee productivity and business outcomes.

Types of shared services models

As with many things in life, there’s no “one-size-fits-all” shared services model. Different organizations have different wants, needs, and capabilities that influence how they implement a shared services model.

For example, some organizations simply want their various business functions to be more closely aligned. This type of looser shared services model improves cross-departmental collaboration while maintaining some degree of autonomy within departments. For instance, a university could implement the shared services model by enabling its IT and HR departments to operate independently, while still sharing resources like tools and training programs. This approach encourages collaborative innovation, all while preserving the unique expertise of each department.

At the other end of the spectrum is the “consolidated” shared services model where there’s one of everything. In other words, it’s a single organization that reports into a single leadership team, with a single service desk staffed by first-line personnel who can field calls across business function lines. There’s also a single way of dealing with employee requests for help, information, service, and change. It makes life so much easier for employees (as there’s a single point of support), offers economies of scale to organizations, and provides support staff with a greater variety of work and development opportunities.

For example, a multinational corporation might centralize its finance operations into one global finance center, standardizing processes and policies to ensure consistency and efficiency across all offices worldwide. This approach reduces operational costs and improves service delivery by aligning all functions with the organization’s strategic objectives.

A phased approach towards a shared services model

Most organizations will take a phased approach to introducing a shared services model. And, in the same way that there’s no “one-size-fits-all” shared services model, there are also different ways to phase the journey to such a model. The most common method is to take an organizational-structure-based approach to change, which includes the following three phases:

1. Business functions start with their separate service and support groups

Each group uses their own tools and processes – with their own telephone number and self-service portal – and they report to their respective departments. Employees have to know which business function to contact for their requests.

2. The co-location of service and support groups

Each business function service and support group still reports to their respective department, but all groups are now co-located in a single service and support centre. Depending on the maturity of the co-located operations, it might already be possible to share workloads across the individual groups to cater to the peaks and troughs that are commonplace in business support.

3. The introduction of a shared services model and organization

The “walls” between the individual service and support groups are removed. A single shared services organization provides all-encompassing, company-wide employee support. Practices and technologies are agreed upon at an organizational level.

How to implement a shared services model

Step 1: Establish a solid foundation

The first step in implementing a shared services model is to build a strong foundation. This begins by aligning key performance indicators (KPIs) for all service departments with the organization’s strategic objectives, ensuring that the shared services model supports broader business goals. Crafting a clear business case for Enterprise Service Management is essential, as it helps demonstrate the value to stakeholders. Equally important is involving key stakeholders early on and highlighting the model’s positive impact on employee satisfaction, which helps secure their buy-in and support.

Step 2: Select the right technology and tools

Selecting the right technology and tools is a crucial step in the process. The Enterprise Service Management software chosen should provide flexibility, seamless integration with your existing tools, and strong security features to effectively manage sensitive data.

Step 3: Create a realistic and comprehensive plan

A well-defined plan is essential, one that clearly outlines objectives, scope, and project organization. Assigning specific responsibilities and setting realistic milestones ensures the project stays on course. And don't forget to create contingency plans to address potential risks. This willl help your organization stay prepared for any unforeseen challenges that may arise.

Step 4: Initiate the implementation of the shared services model

During implementation, it's crucial to give equal attention to people, processes, and technology. Working closely with the software vendor to ensure a smooth implementation of any new tools and efficient data migration helps minimize disruption and keeps the project on track.

Step 5: Address challenges effectively

Anticipating resistance to change is key to a successful transition. Maintaining continuous feedback loops helps manage any pushback, while dedicating resources to address technical issues and create backups ensures the process runs smoothly.

Step 6: Measure and celebrate success

Regularly tracking progress against KPIs offers valuable insights into the effectiveness of your new shared services model. Celebrating milestones as they are reached not only recognizes the team's efforts but also helps maintain a positive momentum for continued improvements.

Step 7: Continuously monitor and optimize

Foster a culture of continuous improvement by establishing ongoing feedback mechanisms. By regularly adapting processes, you’ll make sure your shared services model remains effective in the long run.

Organizing for a shared services model

As well as processes and technology, there are several other areas that need to be unified when moving to a shared services model. These include:

Leadership

The introduction of a shared services model replaces the various business function leadership teams with a single leadership structure: the shared services manager. The shared services organization reports to this new leadership team but probably still has dotted line relationships into the original business functions such as HR. After all, the shared service organization is providing a service on behalf of the original business functions – meaning that both direction and performance reporting are needed as a minimum.

Governance

The shared services model requires a common approach to governance. For example, in setting organization-wide objectives and targets, and in ensuring that everyone agrees on and effectively communicates about roles and responsibilities.

People management

This touches on performance management but also, importantly, it covers the need for a common and effective people recruitment and development model. This is important on two levels. With the introduction of a shared services model, service and support staff are no longer limited to handling one single business function area – instead, they deal with employee requests across multiple areas. Second, the shared services organization needs to function more effectively than the individual groups it replaces – so its employees’ capabilities will play a large role in ensuring that this happens.

Performance management

The common approach to performance measurement and management applies on many levels. From governance, through people management, to the identification of improvement opportunities. Plus, of course, it also applies to service performance. Where, if a service level agreement (SLA)-based approach is taken, it will require a consistent, organization-wide, approach, and targets that are now agreed upon by two distinct parties. Not only the original business customers and stakeholders, but also the business functions – such as HR, facilities, and IT – that now have a dotted line into the shared services organization.

Utrecht University: a shared services model in action

At Utrecht University, implementing a shared services model, including a single point of contact (SPOC), has transformed how incidents are handled. Before, confusion reigned—students and staff faced multiple phone numbers for services like IT, Facility Management, and the helpdesk, often resulting in delays and frustration. Now, the university service desk serves as a clear, unified hub for assistance, simplifying processes for everyone, with TOPdesk's Enterprise Service Management software improving communication between service departments. “Sharing information is easier when you’re all working in the same system,” says Jacqueline, manager of the service desk and the local support department, highlighting how incident handling is now faster, more efficient, and more enjoyable for all involved.

Bring your services together with TOPdesk

Adopting a shared services model can be a game-changer for organizations aiming to improve operational efficiency, reduce costs, and enhance service quality. TOPdesk’s Enterprise Service Management software lets your service teams join forces and process requests from a single platform. With your services united, you’ll solve problems faster, communicate better, and offer more value to your customer.