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Eastern Europe SSCs account for 2% of the global industry

While the majority of world's shared service centers (SSCs) are located in Western Europe (43%) and North America takes 30% of the market share, Eastern Europe account for just 2% of the global industry, reveals the Deloitte's 2015 Global Shared Services Survey consulted by Outsourcing Today

2015-11-05 12:28:57 - by Bogdan Tudorache

Most important finds of the survey are that "geographic barriers are decreasing as demonstrated by the increase in multi-regional SSCs indicating that organizations are finding ways to address concerns such as languages skills, time zone coverage and regulatory requirements."

About 61% of respondents standardized processes after moving to an SSC. All of the respondents indicated that shared methods and tools were the primary benefits of a GBS model. Most of the SSC interviewed have less than 100 employees (57%), while organizations with 100-250 employees take 16% of share, bigger organizations taking the rest (251 to 500 take 13% and more than 500 – 15%).

A strategic choice is being made to balance cost optimization and proximity when standing up operations. This likely suggests either greater comfort with enhanced connectivity or an increase in scope of higher value-add activities, which companies prefer to locate closer to existing operations

Organizations' shared services geographic scope is expanding, as evidenced by the inclusion of markets such as Greece, Africa and the Middle East; demonstrating that virtually every country can be considered as a source of talent around the world.

At the same time, organizations are skipping the single-function concept and pursuing multi-function SSCs at the start of their shared services journey. Organizations are also more and more adopting hybrid shared service models and customizing their service delivery models by function.
While some organizations are able to serve all of their business units or segments with traditional back office functions, they are still working toward a cross business unit or segment-wide strategy for functions from middle and front office functions.

"By leveraging lessons learned from mature SSCs, new SSCs are more likely to start with an integrated Global Business Services (GBS) model, leapfrogging the mature single-function SSCs. Although the definition of GBS varies in the marketplace, organizations are moving toward GBS and adopting models that incorporate a mix of multifunction, multi-location, multi-region, multi-business, and multi-sourced,"reveals the study.
Also, the GBS leader is becoming a confirmed and recognized role in organizations, with significant responsibility across multiple functions including continuous improvement and global process ownership
"GBS is becoming a true enabler of the end-to-end process view and is driving significant end-to-end process improvements."

Although cost savings is a driver of SSC adoption, it should not be the sole focus as lack of service responsiveness could cause decreased adoption during a time when SSCs must use scale to remain
competitive and relevant, say the authors.

"While business unit customers want SSCs to continue focusing on the basics, they are also asking for more — from response timeliness to cost of service — to facilitate the transition into higher value added activities into existing centers."

At the same time, organizations are leveraging service level agreement (SLA) conversations and scorecards to focus time and energy on continuous improvement. As SSCs become more global in nature, organizations will need to implement chargeback methodologies and leverage transfer pricing to effectively address tax implications and regulatory requirements.

To achieve the average annual productivity targets, organizations are building continuous improvement into the culture of the SSC and leveraging methods like Lean and Six Sigma to realize those benefits.

As the focus on benefit realization increases, organizations are following very disciplined approaches to benefit identification and tracking, which is helping organizations to gain greater headcount savings and productivity improvements.

Some organizations are still not incorporating tax as a strategic element in their SSC decision making process, which could be leading them to leave money on the table.

As SS/GBS organizations aspire to become advisors and collaborators to the business, they will be challenged to become more familiar with the business to be able to deliver higher value activities (e.g. predictive analytics).

"Given the potentially high value derived from continuous improvement activities, organizations are focusing on enhancing them by dedicating teams and training resources to find and implement more opportunities," reads the study.


The 2015 survey garnered 311 respondents headquartered in 35 countries consisting of 1,000+ Shared Service Centers (SSCs). Over 50% of respondents had organizations over 10,000 full time
equivalents (FTEs). Manufacturing is the top industry represented in the biennial survey, accounting for approximately 27% of respondents. Tech/Telecom, Financial Services, and Consumer Products are the next most represented industries accounting for 13%, 11%, and 10% of respondents respectively About 70% of survey respondents are headquartered outside of the United States.


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