Shared Services Centers, a complementary path to outsourcing

19 August 2010:

When outsourcing payroll at a global level, multinationals may benefit from a Shared Services Center; it will optimize parts of processes that remain internal and act as a single interface with the service supplier.

Indeed, a multinational with one or more SSCs will find it more efficient to outsource its payroll for several countries. These centers will enable the company to consolidate the aspects of the payroll processes that have been retained in-house and to manage the service provider who will handle what is to be outsourced.

If the multinational has already created an SSC for some functions (such as finance or HR), it can leverage this experience to extend the scope of the SSC to cover payroll. If it does not yet have a service center, the multinational can work with the service provider to create an SSC that will maximize outsourcing’s benefits. In both cases, an SSC works in tandem with outsourcing payroll.

A particular advantage of this approach is that it enables human resources managers to address a major challenge, that of contributing to the company’s overall performance by ensuring that resources are allocated exactly as needed along the value chain. By choosing to outsource the company’s non-core processes and boosting or reassigning resources to activities with a high added-value, HR managers optimize their teams’ potential and fulfill their primary duty, that of using the company’s human capital to the best advantage.