Choosing Your Business Model: Shared Services Over Centralization

Regardless of industry, specialty, or region, business owners know there is always room for improvement within the company. In the fast-paced and highly-competitive markets of today, businesses have to adapt to the surges of demand and supply, adopt the proper business model that propels the company forward.

There’s a variety of possible models to adopt, but two common and popular models stand out above the rest. Your business needs to know: how is shared services model better than centralization?

Shared Service In A Nutshell

In a shared services model, processes are coordinated between independent units and a supervising entity. This relationship is dynamic, with each unit accountable to its own output and efficiency. There’s focus on service excellence, cost-efficiency, performance, and continuous improvement. Customers are treated as customers, with emphasis on service and feedback.

Centralization, Streamlining And Efficiency

Centralization dedicates leadership to an oversight party or headquarters. Consequently, this model benefits the company more than the end user (customer). Usual focus is on operations and management, instead of customer service. Centralization is a traditional business model, and it’s proven advantageous if the goal is to run the company like a well-oiled machine.

The Advantage Of Shared Services Model

To put it simply, shared services offers the business the chance to maximize a dedicated and expert team of specialists to handle a specific operation/project, at a cost-effective price. Meanwhile, centralization is the integration of services to one location, with a clear designation of decision-making to the higher ups of the management. While both models offer a range of benefits, they also have their own unique advantages to offer.

In the shared services model, businesses can expect a strong emphasis on the quality of performance/output from the provider. In centralization, a standard procedure must be strictly followed. The whole structure of the team under the shared services model also make for a way that leaders have a shared responsibility and accountability to deliver the efficient and effective functions required of them.

In contrast, the decisions in the centralized model are made for the benefit of the company rather than the customers. Because the shared services model offers a more flexible and service-oriented approach to accomplish a task/function, the advantage is evident in excellent results and feedback.


Searching for effective solutions to outsourcing? Consider shared services and staff leasing!


Elsewhere on this blog:

Hiring Your First Offshore Employee – Outsourcing Tips for Beginners

What is Offshore Staff Leasing?

3 Ways to Improve Staff Leasing for Your Business