Shared services centres

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Shared services centres (SSC) provide services to internal clients. When an SSC is funded by pricing from internal clients, it is crucial to accurately determine the cost of providing a given service. Rather than aiming to make profits, the goal of these centres is to avoid having a deficit. As for the clients, they want to make sure they pay their fair share of the costs. For example “large” internal clients do not want to subsidize the “smaller” internal clients. In these types of situations, costing should clearly not be done haphazardly.

Internal clients also expect that their SSC should be able to provide transparent and understandable accountability, so clients are able to ascertain for themselves the fairness of internal invoices.

Most SSCs have a continuous improvement goal intended to make them increasingly efficient and thereby reduce unit costs. It is important for managers to understand the value chain and the cost of its component activities because, once they do, they can use performance management techniques (benchmarking business processes, for example) to find ways to improve operational efficiency.