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Shared Services operate with a mindset of a business and views other organizations as customers

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Sharvari Gaikwad
Shared Services operate with a mindset of a business and views other organizations as customers

The consolidation of business operations that are used by many parts of the same organisation is known as shared services. Shared services are cost-effective because they centralise and minimise redundancy in back-office processes that are used by many divisions of the same firm. Some businesses utilise a chargeback system to bill departments on a per-use, per-quarter, or per-year basis. Other businesses accept the expense of shared services as part of their overall operating costs. For finance, human resources management (HRM), and information technology, most organisations now use a shared services model (IT).


Collaboration between diverse groups, such as a hospital trust or a police force, is analogous to shared services. Adjacent Trusts, for example, might opt to collaborate by integrating their HR or IT divisions. There are two compelling reasons to share services. The arguments for "less of a shared resource" and "efficiency through industrialization." The first is self-evident: if you have fewer managers, IT systems, facilities, and so on, you will save money; if you utilise less of a resource, you will save money. 'Efficiency through industrialization' is the second argument. This theory assumes that specialisation and standardisation lead to the formation of 'front' and 'back' offices, resulting in increased efficiency. Using an IT'solution' as the mechanism, the conventional procedure is to simplify, standardise, and finally centralise.


Outsourcing, in which an external third party is paid to perform a service that was previously internal to the buying company, generally results in redundancy and reorganisation, is not the same as shared services. The benefits of shared services versus outsourcing are still being debated. A joint venture between a government department and a commercial company is frequently thought to be an example of shared services. A joint venture entails the establishment of a separate legal commercial company (jointly owned) that generates profit for its stockholders.


Read more @ https://tradove.com/blog/Shared-Services-Are-Consolidation-Of-Business-Operations-That-Are-Used-By-Other-Multiple-Part-Of-The-Same-Company.html


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Sharvari Gaikwad
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