Measuring the ROI of Shared Services Centers: Metrics and KPIs

Shared Services Centers (SSCs) have become increasingly popular in recent years as organizations look for ways to streamline their operations and reduce costs. However, measuring the return on investment (ROI) of these centers can be challenging. In this article, we will explore the metrics and key performance indicators (KPIs) that can be used to measure the ROI of SSCs.

Overview

Shared Services Centers are centralized units within an organization that provide support services to multiple business units or departments. These centers can provide a range of services, including finance and accounting, human resources, IT, and procurement. By consolidating these services, organizations can achieve economies of scale and reduce costs.

However, measuring the ROI of SSCs can be difficult. Unlike other investments, such as capital expenditures, the benefits of SSCs are often intangible and difficult to quantify. Additionally, the costs of SSCs are often spread across multiple business units, making it challenging to attribute specific costs to the center.

Key Players in the Measuring the ROI of Shared Services Centers: Metrics and KPIs

There are several key players involved in measuring the ROI of SSCs:

• Finance: The finance department is responsible for tracking the costs and benefits of SSCs. They are also responsible for developing the metrics and KPIs used to measure the ROI of the center.
• Business Units: The business units that use the services provided by the SSC are also important players. They are responsible for providing input on the quality of the services provided and the impact on their operations.
• SSC Management: The management team of the SSC is responsible for ensuring that the center is operating efficiently and effectively. They are also responsible for implementing any changes needed to improve the ROI of the center.

Metrics and KPIs

There are several metrics and KPIs that can be used to measure the ROI of SSCs:

• Cost Savings: One of the primary benefits of SSCs is cost savings. The cost savings metric measures the difference between the cost of providing services through the SSC versus providing them through individual business units.
• Service Quality: The quality of the services provided by the SSC is also an important metric. This can be measured through customer satisfaction surveys or other feedback mechanisms.
• Process Efficiency: SSCs are designed to improve process efficiency. This metric measures the time and resources required to complete specific tasks before and after the implementation of the SSC.
• Employee Satisfaction: The satisfaction of employees who work in the SSC is also an important metric. This can be measured through employee surveys or other feedback mechanisms.

Market Challenges

There are several challenges that organizations may face when measuring the ROI of SSCs:

• Intangible Benefits: As mentioned earlier, the benefits of SSCs are often intangible and difficult to quantify. This can make it challenging to demonstrate the ROI of the center.
• Attribution: The costs of SSCs are often spread across multiple business units, making it challenging to attribute specific costs to the center.
• Data Availability: Organizations may not have access to the data needed to measure the ROI of SSCs. This can make it challenging to develop accurate metrics and KPIs.

Market Opportunities

Despite these challenges, there are several opportunities for organizations to improve the ROI of SSCs:

• Process Improvement: By continuously improving processes, organizations can reduce costs and improve efficiency.
• Technology: Technology can be used to automate processes and improve efficiency.
• Employee Engagement: Engaged employees are more productive and can help improve the quality of services provided by the SSC.

Future of Measuring the ROI of Shared Services Centers: Metrics and KPIs

The future of measuring the ROI of SSCs is likely to be driven by technology. As organizations continue to adopt new technologies, such as artificial intelligence and machine learning, they will be able to more accurately measure the ROI of SSCs. Additionally, the use of data analytics will enable organizations to develop more accurate metrics and KPIs.

Conclusion

Measuring the ROI of Shared Services Centers can be challenging, but it is essential for organizations to understand the impact of these centers on their operations. By using the right metrics and KPIs, organizations can accurately measure the ROI of SSCs and identify opportunities for improvement.