Shared Service Centers have become a common instrument for providing internal services to a range of business units from a central location. By choosing a suitable international location, companies can not only achieve synergies from centralization, process and quality improvements, but also location economies. Southeast Asia hosts one of the largest numbers of Shared Service Centers in the world and Malaysia and Singapore are seen as prime locations. This volume presents insights from a study tour to Malaysia and Singapore that identified good practices for managing Shared Service Centers from six major corporations. Key aspects of managing Shared Service Centers are addressed and complemented by recent trends such as robotic process automation (RPA) and the shift to more knowledge-intensive services in Global Business Services (GBS) organizations.
Dirk Klimkeit is Professor of Management, Organization and International Management at Baden-Wuerttemberg Cooperative State University (DHBW) Stuttgart, Germany. Previously, he managed several projects relating to shared service centers in various parts of the world at a large audit and advisory firm. K Thirumaran is the Head of Academic Group, Business and IT at James Cook University Singapore. He has worked in the banking, transport, travel and hospitality industries.
Contents
Chapter 1: Introduction
Chapter 2: Internal Organization and Governance
Chapter 3: Planning, Recruiting, and Selecting Talent
Chapter 4: Training & Development in SSCs in Asia
Chapter 5: Career Development and Retention
Chapter 6: Financial Management
Chapter 7: Performance Management in Shared Service Centers
Chapter 8: Collaboration with the Retained Organization and Other SSC Locations
Chapter 9: Information and Communication Technology
Chapter 10: Introducing Robotic Process Automation
Chapter 11: Shifting to More Knowledge-intensive Services
Chapter 12: Conclusion
Objectives & Core Themes
This book provides comprehensive insights into the management of Shared Service Centers (SSCs) in the Asia Pacific region, specifically focusing on Malaysia and Singapore. It examines how organizations structure their operations to balance efficiency with service quality, while addressing challenges such as talent acquisition, financial governance, and the integration of emerging technologies like automation.
- Strategic governance and organizational design of SSCs.
- Human resource management challenges, including recruitment and retention in tight labor markets.
- Operational optimization through information technology and Robotic Process Automation (RPA).
- Financial management strategies, including transfer pricing and chargeback models.
- The evolution toward knowledge-intensive services to increase value-add.
Excerpt from the Book
1.0 Introduction
During the colonial period, early international corporations exploited land and labor in much of Asia (Alatas 1977; Breman 1989; Murray 1992). Nodal points of communication and command structures helped control far-flung territorial resources and trade (Jones & Wale 1998). However, after World War II, businesses and business organizational models became more agile (Doz & Kosonen 2010) in their profit-seeking activities, focusing on establishing strategic business production facilities to access markets, with an intention of transferring technology or merely assisting developing countries in their economic vitality and engagement in global trade (Amsden 2001; Maddison 2007).
During the 1990s, businesses rationalized and consolidated their resources more efficiently through better management processes and low-cost production centers (Bergeron 2002). ‘Business process optimization’ was a key phrase used by firms seeking ways to run their businesses at the most efficient level with a given resource. This thinking led to further streamlining of the business operations process at the back office and centralizing common functions across business units at select locations (Davenport, Harris & Cantrell 2004; Howcroft & Richardson 2012). Consequently, Shared Service Centers (SSCs) emerged.
The setup of SSCs is driven by geo-economic realities, a cheap but skilled labor force, low rental and infrastructure costs, and developments in information and communication technology that enabled the provision of many services from a geographic distance, all conducive to a centralized form of business operations known as “shared services”. Companies found that key processes conducted in the back office could be standardized and executed in a place separate from the origins of the business transaction (Howcroft & Richardson 2012). Besides efficiency, SSCs promise additional benefits to companies. By moving administrative tasks into a SSC, companies free professionals working in decentralized units from administrative burden, enabling them to move into more strategic activities. Since many companies expect improvements in service quality without giving up control, as would be the case with outsourcing, SSCs are sometimes labeled as “insourcing” (Bondarouk 2014).
Summary of Chapters
Chapter 1: Introduction: Provides an overview of the emergence and evolution of Shared Service Centers as a strategic response to global economic shifts and the need for process optimization.
Chapter 2: Internal Organization and Governance: Examines different governance models and organizational structures, illustrating with the example of IBM how firms customize these for specific operational needs.
Chapter 3: Planning, Recruiting, and Selecting Talent: Analyzes the critical human resource processes required to build a workforce in competitive markets like Singapore and Malaysia.
Chapter 4: Training & Development in SSCs in Asia: Discusses the importance of continuous skill development and e-learning to maintain service quality and employee engagement.
Chapter 5: Career Development and Retention: Explores the challenges of staff attrition and suggests tools like career anchors and flexible working models to retain valuable talent.
Chapter 6: Financial Management: Reviews common economic models for SSCs, such as cost and profit centers, and evaluates transfer pricing methods used to ensure internal cost efficiency.
Chapter 7: Performance Management in Shared Service Centers: Evaluates tools like Service Level Agreements (SLAs) and Key Performance Indicators (KPIs) used to measure and report on SSC performance.
Chapter 8: Collaboration with the Retained Organization and Other SSC Locations: Investigates the coordination mechanisms required to manage boundary issues between SSCs and parent business units.
Chapter 9: Information and Communication Technology: Summarizes the technological infrastructure, including ticketing systems and ERPs, necessary to integrate geographically dispersed operations.
Chapter 10: Introducing Robotic Process Automation: Assesses the impact of RPA on automating transactional tasks and shifting the human workforce toward value-added activities.
Chapter 11: Shifting to More Knowledge-intensive Services: Explores the strategic transition from transactional processes to higher-value knowledge-based services to maintain relevance.
Chapter 12: Conclusion: Summarizes key insights from the field studies in Malaysia and Singapore and highlights future trends, including automation and the push for higher service complexity.
Keywords
Shared Service Centers, SSC, Asia Pacific, Malaysia, Singapore, Governance, Human Resource Management, Talent Acquisition, Financial Management, Robotic Process Automation, RPA, Service Level Agreements, SLA, Knowledge-intensive Services, Global Business Services, GBS.
Frequently Asked Questions
What is the fundamental purpose of this book?
This book aims to provide a detailed understanding of how Shared Service Centers (SSCs) operate, are managed, and evolve within the dynamic markets of Malaysia and Singapore, bridging the gap between theoretical models and actual industry practices.
What are the central thematic areas covered?
The core themes include governance, human resource management (recruitment and retention), financial management, performance measurement, digital transformation (RPA), and the shift toward knowledge-intensive service delivery.
What is the primary research goal?
The primary goal is to examine the "modus operandi" of SSCs in Singapore and Malaysia by combining academic literature with empirical findings derived from field visits to major multinational corporations.
What scientific methods were employed?
The research relies on a combination of academic literature reviews and qualitative primary research conducted through interviews and on-site visits to six major SSCs in Singapore and Kuala Lumpur.
What is discussed in the main body of the work?
The main body covers a wide range of operational aspects including internal structure and governance, talent deployment, financial chargeback models, performance management tools (SLAs/KPIs), ICT infrastructure, and strategies for implementing robotic process automation.
How is the book categorized by key search terms?
The work is categorized by terms such as Shared Service Centers (SSC), Global Business Services (GBS), human resource deployment, service optimization, Robotic Process Automation (RPA), and regional management practices in Southeast Asia.
How do SSCs in Malaysia and Singapore differ regarding their economic structure?
The findings indicate that while literature often suggests profit centers as ideal, most visited SSCs in these regions operate as cost centers, utilizing the "cost plus" pricing method for ease of administration and tax compliance.
Why is the transition toward knowledge-intensive services significant?
This transition is critical because it allows SSCs to move up the value chain, ensuring their continued relevance as traditional transactional tasks become increasingly automated through technologies like RPA.
- Citation du texte
- Prof. Dr. Dirk Klimkeit (Éditeur), Dr. K Thirumaran (Éditeur), 2018, Management of Shared Service Centers in Asia, Munich, GRIN Verlag, https://www.grin.com/document/380306