Shared Services Technology Centers

Goals

To determine the best organizational structure of a Shared Services Technology center of a US MNC in India (Companies like Schneider, ABB, TE Connectivity, Eaton, Emerson, Ingersoll Rand) and whether it has to be division or vertical based, function-based, or a hybrid model in order to understand inform a comparison of India Shared Service centers.

Early Findings


Shared Services Technology Centers:

Best Organizational Structure Overview

  • Some industry experts have recommended that the best organizational structure for Shared Services Technology centers is a function-based one that focuses on expanding functional scope and scale, noting that progressive companies expand the scope to include expert functions and do not limit the criteria to whether it yields the same kind of cost savings as those achieved by taking on high-volume transaction processing.
  • However, other industry experts believe that a hybrid model is the best organizational structure. One study found that this approach can result in a more integrated organization that is able to help drive rapid cost savings and increase agility and company growth.
  • Creating a hybrid model can also add tremendous value to a company if there is a clear understanding about what should go direct to a Business Process Outsourcing (BPO) provider and what should remain in-house.
  • Regardless of the model chosen, the key principles remain the same: standardization, consolidation, and automation. The challenge is to choose the most appropriate delivery model that meets company objectives.

Schneider

  • Schneider partnered with ValuerHR's BPO service as their provider in order to create growth opportunities, while reducing costs in India that exemplifies the hybrid model as their organizational structure choice for their Shared Services technology center.
  • As a result, Schneider successfully doubled their target business goal of 30% cost reduction.

Proposed next steps:

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