Adoption of shared service models is now a strategic choice – KPMG Report 2011

August 27, 2011: KPMG released a latest survey report conducted in the BPO and IT sector which talks about the trend of many companies adopting the service provided by the shared service models to enjoy the benefit of cheaper cost. The report which was named ‘KPMG 2011 Sourcing Advisory Pulse Survey’ concludes that the demand for shared services models is increasing while compared to outsourcing.

KPMG – established in 1993 in India is a leader in providing risk management solutions. The company provides financial tax and internal audit services for many companies in the IT sector. KPMG recently conducted a research survey on the up coming trend in the IT companies in adopting shared service models. The survey was conducted among 20 leading companies in the IT sector.    

According to the findings of the survey many companies are focusing on reducing the extra cost incurred in outsourcing. About 59 % of the respondents showed positive approach towards the benefits of adopting shared service models. Another 51 % responded that they are looking forward to improve internal processes through shared service models.  

The research states that the reason for companies to adopt this step is vivid. Companies find that it is very cost effective to invest in shared service models instead of going for outsourcing, moreover cultural issues can also be minimized. They feel that depending on shared service will provide continuous and reliable service with increased quality which can add value to the exciting services. The most eminent reason, these companies find is the sustainable efficiency which could leverage the efficient functioning of the company in the long run.  

Gaining competitive advantage is very essential for any company, depending on shared services could help to understand the internal strengths and external threats very well and make the company flexible to achieve the objectives according to various situations. Companies who are into financial services and human resource Service are widely adopting shared service models.

It is noted that the companies apart form BPO and IT sector which are into energy; utilities, oil, gas and manufacturing are also widely depending on shared service providers. According to the companies in these sectors, shared services ensure improved systematic functioning inside the organization.

About 82 % of the respondents gave a positive response in approaching shared service models. Respondent said, in this flexible economy which could any time down trend the global market seeking the benefits provided by shared service models is a better choice.

This strategic decision adopted by many companies might have a negative impact on pure outsourcing.

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