What is Shared Services? A Guide to Efficiency & Value 

As organizations grow more complex, many are rethinking how back-office work and service delivery should be managed. Shared services provide a model that consolidates core functions, increases efficiency, and builds greater agility.  

The older approach of decentralized support functions, where each business unit maintains its own finance, HR, and IT teams, has become difficult to sustain. It creates duplicate efforts, inconsistent processes, poor service management, and unnecessary pressure on resources. 

The answer for many organizations is the shared services model. In this article, we explain what shared services is, why it matters, and how it is changing the way companies run their operations. 

From decentralization to strategic consolidation 

Historically, companies were smaller and less global, so it was common for each business unit or location to manage its own support staff for functions like accounting, human resources, and IT. While this decentralized support services structure provided autonomy, it also created inefficiencies, duplicate systems, and little consistency. As businesses expanded and competition became global, this fragmented approach turned into a major disadvantage. 

Shared services emerged as a way to solve these challenges. By centralizing and standardizing administrative functions, the model helps organizations become more agile and cost-effective.   

The global shared-services market was valued at about USD 42.15 billion in 2024, and is projected to grow at a CAGR of 23.5% from 2024 to 2031, emphasizing the increasing scope of this trend. 

What is shared services? 

At its core, shared services is an organizational model where a centralized unit delivers standardized support services across the enterprise. Instead of every department managing its own payroll or accounts payable staff, a single specialized team provides these functions for the entire company. This unit is tasked with delivering high-quality services in a cost-efficient way, often guided by clear Service Level Agreements (SLAs). 

 A shared services center (SSC) operates much like an external provider, but its customers are the internal departments and business units of the same organization. This “business within a business” approach creates accountability, encourages efficiency, and prioritizes customer satisfaction. Over time, the SSC becomes a driver of continuous improvement and a catalyst for broader organizational change. 

Shared services vs. outsourcing 

The comparison of captive shared services vs outsourcing ultimately comes down to a single key factor: ownership.

• Shared Services: This model is internal. The SSC is a captive unit, fully owned and operated by the company. It leverages internal talent and resources to serve other parts of the organization. 
• Traditional Outsourcing: This model is external. A company delegates specific functions to a third-party service provider, who takes on the responsibility for staffing, technology, and process execution. 

These two models are not mutually exclusive. Many organizations now use a hybrid approach, where an SSC manages certain internal processes while also overseeing external outsourcing partners. This combination creates a more flexible and powerful service delivery model. 

Benefits of a shared services model 

Beyond the structural flexibility of a hybrid model, the primary driver for centralization is the measurable impact on a company’s bottom line. While the transition is complex, the long-term advantages—ranging from massive cost savings to improved operational agility—provide a foundation for sustainable growth.

By consolidating functions and eliminating redundant systems and staff, organizations achieve economies of scale. This centralized approach reduces overall operational costs and frees up resources that can be reinvested into core business activities. Approximately 55% of organizations with a global business services (GBS) leader role have achieved over 20% average cost savings through shared services, according to Deloitte’s 2025 GBS Survey. 

An SSC focuses on creating a single, best-practice process for a given function. This standardization reduces variations, enhances accuracy, and improves the overall quality of service delivery. It also simplifies training and makes it easier to onboard new employees. 

As a company grows through new acquisitions or expansion into new markets, the shared services model provides a platform for rapid scalability and cost savings. New business units can be integrated into the standardized processes of the SSC much faster and more cost-effectively than building new support functions from scratch. 

By offloading transactional, repetitive tasks to the SSC, employees in local business units can focus on their core competencies and strategic priorities. This shift from administrative work to value-added activities leads to higher job satisfaction and improved service delivery. 

By consolidating data and processes in one place, a shared services center gives leaders a single source of truth. This foundation enables stronger analytics, clearer reporting, and tighter control over financial and operational performance. 

Key functions of shared services 

Knowing the model’s structure is only half the battle; the real value comes from identifying which specific business areas are prime for consolidation. 

Virtually any repetitive, standardized, and transactional administrative function can be moved from an internal service provider to a shared services model. The most common areas for consolidation include: 

• Finance & Accounting (F&A): This is the most prevalent business function in shared services. It includes accounts payable, accounts receivable, payroll, general ledger, fixed assets, and financial reporting. Centralizing F&A processes ensures consistent financial controls, improves data accuracy, and streamlines reporting. 
• Human Resources (HR): Shared services can manage a wide range of HR functions, such as payroll administration, benefits administration, employee data management, recruiting coordination, and employee help desks. This allows local HR managers to focus on more strategic initiatives like talent development and employee relations. 
• Information Technology (IT): this function is another prime candidate for shared services. A centralized team can handle help desk support, network management, application support and infrastructure services, providing consistent service and security across the organization. 

Shared services best practices for a scalable operating model

Identifying which functions to centralize is only the starting point; the real challenge lies in structuring those operations to ensure they actually deliver on their promise. Moving from a decentralized state to a high-performance environment requires more than just an organizational chart change.

To avoid the trap of simply replicating existing inefficiencies in a new location, high-performing organizations apply a specific set of shared services best practices that prioritize process standardization and simplification before any migration begins. This “process-first” approach ensures that you are scaling an optimized workflow rather than moving manual friction and inefficiencies into the new center.

Applying best practices means being intentional about the delivery model and the technology that supports it. Whether an organization chooses a captive vs. outsourcing approach, the foundation of the model must be built on robust governance and integrated automation from day one.

By focusing on talent ecosystems and a strong change management strategy, leadership can move the organization from a culture of “owning” resources to “consuming” a professional service. This shift not only builds internal buy-in but ensures the shared services center remains a resilient, high-value asset capable of supporting long-term growth.

Selecting the right shared services location strategy

Once the foundational design is in place, the next critical decision is determining where the work will be performed. A successful shared services location strategy is no longer just about finding the lowest hourly wage; it is about finding an ecosystem that supports long-term growth and operational excellence.

• Geographic Proximity and Time Zone Alignment: Real-time collaboration is a significant strategic asset. Selecting a location that aligns with your corporate time zone facilitates “same-day” communication and instantaneous problem-solving, which is vital for agile operations and complex tasks.
• Cost Structure Beyond Labor: High-performing organizations evaluate the total cost of operations rather than just labor arbitrage. This includes infrastructure reliability, tax incentives, and the overall ease of doing business to avoid hidden costs that erode projected savings.
• Cultural Affinity and Language Proficiency: The quality of interaction determines the success of the center. Choosing locations with deep cultural affinity and professional fluency ensures services are delivered with the right context, reducing communication friction and fostering a “one team” environment.

By prioritizing markets that offer a balance of competitive operating costs, talent depth, and time zone alignment, organizations can build a more resilient shared services center. Selecting a location is not a one-time real estate decision, but a strategic choice that determines how closely the center can integrate with the enterprise’s core headquarters. When the location strategy aligns with the broader business model, the shared services center ceases to be a detached utility and becomes a seamless extension of the global team.

Challenges of a shared services model 

But even with a clear roadmap for design and location, leaders must be prepared to navigate the friction that naturally comes with large-scale change. Identifying these hurdles early is essential for maintaining momentum during the transition.

The most common obstacle is organizational resistance, as local business units may be reluctant to cede control over their established processes and staff. Overcoming this requires more than just an executive mandate; it demands a proactive change management strategy and a communication plan that clearly articulates the value of the new model to every stakeholder.

Financial and operational hurdles also play a significant role. Establishing a high-performing center requires an initial investment in technology, infrastructure, and training that must be justified by a rigorous business case focused on long-term ROI.

Additionally, organizations must manage the perceived risk to service quality. To prevent a decline in performance, it is vital to establish robust Service Level Agreements (SLAs) and transparent metrics from the outset, ensuring the shared services center remains accountable to its internal customers.

The evolving landscape of shared services

The shared services model is not static; it is a dynamic framework that continuously evolves to meet new business challenges and capitalize on technological advancements. As organizations push for greater efficiency and strategic value, the trends shaping the industry are redefining what’s possible for back-office operations.

From the strategic integration of AI and intelligent automation to new approaches in talent management and service delivery, staying ahead of these shifts is critical. Understanding the latest shared services trends provides a clear roadmap for future-proofing your operations and ensuring your model continues to deliver a competitive advantage.

The Auxis role: Your partner in shared services transformation 

For over 25 years, Auxis has guided organizations in building shared services models that balance strategy with execution. We help clients assess their current operations, identify opportunities for consolidation, and design future-state models that are scalable, efficient, and backed by a strong business case. 

A key lever for achieving this efficiency is our expertise in intelligent automation. By strategically implementing a mix of AI, machine learning, and advanced analytics, our clients are able to dramatically reduce costs, streamline processes, and improve service quality within their shared services centers. 

For organizations pursuing an outsourced or hybrid model, our nearshore delivery centers in Latin America provide a turnkey solution. With a bilingual, highly skilled talent pool in U.S.-aligned time zones, we deliver the cost advantages of outsourcing with the real-time collaboration and cultural affinity that global businesses need. 

Interested in learning more about how shared services can transform your organization? Connect with Auxis to design the right model for your organization. 

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