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Shared services: A model for the long term

Mauro Mezzano, Co CEO Vantaz, sees in the current economic situation the opportunity to incorporate this model, which reduce costs, optimize the internal customer service, and improves internal controls.

Since a time Shared Services model is not more a novelty in the way European and United States large companies organize their operations. Quite different from what happens in Latin America, Australia and Asia, where it`s still a model in consolidation, which, because of the current rush to reduce costs, is becoming a real alternative that is also possible to projected in the long term.

And Vantaz know it, because is part of the portfolio of the consultancy since it´s foundation. They have implemented Shared Services in more than twenty companies in different industries, reducing their cost and installing capacities that allowed them to continue operating more efficiently, and have a global approach that goes beyond economic times.

But what it is? And how it fits? Shared services involved support areas such as human resources, finance, accounting, information technology, purchasing, among others, and focuses in centralizing their work in order to reduce costs. Mauro Mezzano, Co CEO Vantaz, explains that in general is possible to reduce between 20 and 40 percent of the staff. A decrease of this size entails the need to improve processes and systems, so that the affected areas can continue supporting the company despite of the lower number of employees.

Another objective of this model is to improve the control mechanisms inside the companies to minimize the probability of fraud, losses and other big size errors.

The key is the implementation

Shared Services has many positive externalities, however, and according to Vantaz experts, achieve them depends on the design of the model and how aligned with the company strategy is. Also of its implementation. To get it, and according to Mauro Mezzano experience, is necessary to control four variables.

  • Do a realistic planning. Many times, especially in contracted economies times, executives try to rush a process which is slow and lasts three to four years.
  • Handle the change. Centralize functions involves reducing staff and introduce new technologies and processes that undoubtedly will create resistance, so the change must necessarily consider the culture of each company, country and / or region in which it is located.
  • The top leadership support. Resistance to change can also occur at managerial and executive level, therefore, the process requires the commitment of the Board.
  • The process should be aligned with the strategic planning of the companies. While it is a great opportunity to reduce costs and make deep reorganizations in crisis times, is necessary to accept that it`s a process that requires time to mature and should be thought in the long run.

Given these four variables is also necessary that consultants and companies work together and involve different professionals fields. Mezzano adds: “Today is a good time to implement Shared Services because companies need to reduce costs and this is a successful model in this area. Also, it increases competitiveness and improves service levels. The important thing is that is has to be implemented as part of the company DNA and not a fad”.