Business Shared Services (BSS) and Centralized Services (CS) are two common models’ organizations adopt to streamline operations and increase efficiency.
Business Shared Services is a model that helps organizations centralize and streamline their operations across different departments or regions. It consolidates common business functions, such as finance, human resources, IT, and procurement, into a single service delivery model. This model uses technology, such as shared service centers and enterprise resource planning (ERP) systems, to standardize processes and automate routine tasks.
On the other hand, Centralized Services are a model in which an organization's services and functions are managed and operated from a single location or department. In this model, all decisions and execution of services are made by a central team or department, with little to no involvement from other departments or regions.
While both models have their advantages, organizations increasingly prefer BSS due to its numerous benefits over CS. This blog explores the top three benefits of BSS over CS.
1. Flexibility and Agility
One of the primary benefits of BSS over CS is flexibility and agility. In a centralized model, decision-making and execution are concentrated in a single location or department. It leads to slow decision-making, communication delays, and inflexibility in responding to changing business needs.
On the other hand, BSS allows for decentralized decision-making and execution, with teams in different regions or departments working collaboratively to provide services. This decentralized model enables greater agility and flexibility in responding to changing business needs and customer demands.
The Global Business Services model is an extension of BSS that allows organizations to be more flexible and agile, enabling them to respond quickly to changing market conditions and customer needs. It further allows faster decision-making and implementation, which can help companies stay ahead of their competitors.
2. Cost Savings
Another significant benefit of BSS over CS is cost savings. In a centralized model, all services and functions are managed and operated from a single location, which can lead to high overhead costs, including real estate, personnel, and technology infrastructure. In contrast, BSS allows for sharing resources and expertise across different departments or regions, which can result in significant cost savings.
BSS can help companies reduce costs by sharing resources and expertise across different departments or regions. So, companies can save money on real estate, personnel, and technology infrastructure by consolidating services and functions.
3. Improved Service Quality
BSS can lead to improved service quality compared to CS. In a centralized model, there is a risk of overburdening the central team, which can decrease service quality. On the other hand, BSS allows for a more distributed approach to service delivery, with teams in different regions or departments working collaboratively to provide services. This approach can improve service quality, as teams can leverage their expertise and share best practices to provide better service.
BSS allows organizations to provide better service quality by leveraging the expertise and resources of different teams. By working collaboratively, teams can share best practices and optimize service delivery, improving customer satisfaction.
Final Thoughts
While both Business Shared Services and Centralized Services have their advantages, the former is increasingly being preferred by organizations due to its flexibility and agility, cost savings, and improved service quality through extended tools like Global Business Services. So, BSS can help organizations optimize their operations, reduce costs, and improve service quality, making it a compelling choice for businesses looking to stay competitive in today's fast-paced market.
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