Reducing The Cost Of Operation

As the shared services model has matured and global business connectivity has improved over time, organizations have continued to seek cost savings by moving shared services centers from traditional business centers in North America and Europe to locations where labor costs are lower, such as India, the Philippines, or Eastern Europe. However, there is a limit to how far an organization can go in reducing labor costs without sacrificing quality or hampering future growth. According to the Hackett Group, the most successful organizations implement cost optimization measures "that are more likely to be sustainable during recovery and growth." (The Hackett Group, 2014). Prepare for the future by setting a vision for processes that is appropriate for your business strategy. Organizations that choose a shared services model based solely on cost cutting, without considering the other factors that allow the company to improve and innovate risk failing to provide the level of service that their internal and external customers expect.