Insights

Shared services are not enough anymore

David Mitchell, Director, UST

Introduction

Most shared services organizations are not failing because they lack efficiency. They are failing because efficiency is no longer enough. In a business environment defined by cost pressure, digital acceleration, talent constraints, and rising stakeholder expectations, the traditional shared services mandate, do more for less, is too narrow. The real question is whether shared services can become a platform for enterprise transformation, or whether it will remain a back-office utility optimized for yesterday’s priorities.

The organizations that will lead are those that stop treating shared services as a location strategy or labor-arbitrage exercise and start treating them as an operating model strategy. That means grounding decisions in facts, designing the future state deliberately, embedding automation into the work itself, governing across functions and providers, and managing change as seriously as technology or cost. Based on UST’s shared services transformation and cost optimization approaches, five keys stand out.

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The five keys

1. Establish a fact-based baseline and business case

Successful transformation starts with transparency. Organizations need a clear view of the work being performed, who performs it, where it is performed, what it costs, which systems are involved, and how service quality is measured. Without this baseline, leaders are forced to make decisions based on anecdotes, assumptions, or incomplete functional views.

A strong baseline should include quantitative data such as FTE counts, fully loaded costs, transaction volumes, service levels, cycle times, technology spend, supplier costs, and process volumes. It should also include qualitative insights from process owners, service consumers, technology teams, and business stakeholders. This combination makes it possible to understand not only what shared services costs today, but also why it performs the way it does.

The business case should then connect the baseline to specific value levers: process simplification, labor arbitrage, automation, sourcing optimization, technology consolidation, service integration, and external spend reduction. The strongest business cases do not focus only on savings; they also quantify improvements in quality, scalability, compliance, speed to benefit, and stakeholder experience.

Example: A company assessing its finance, HR, procurement, and order management functions may discover that similar work is being performed in multiple locations, using different systems, service levels, and role definitions. By mapping FTEs, costs, transaction volumes, pain points, and service metrics to a common process taxonomy, leadership can see which activities are candidates for standardization, automation, outsourcing, or retention. The result is a business case based on evidence rather than broad assumptions.

2. Define the target service delivery model and operating model

Shared services transformation is fundamentally an operating model decision. Leaders must determine what work belongs in shared services, what should remain retained in the business, what can be automated, what should be outsourced, and what capabilities should be organized as centers of expertise. These choices should be guided by business outcomes rather than by functional preferences or legacy structures.

An effective service delivery model defines scope, governance, location strategy, sourcing approach, performance expectations, technology enablement, and the retained organization. It should also answer practical questions: Which processes and geographies are in scope? How much standardization is required? Where should work be performed? Which activities are candidates for outsourcing or managed services? What capabilities are required in the retained team?

The operating model should be designed holistically across value, services, processes, organization, technology, people, and governance. When these components evolve together, shared services can move beyond transactional efficiency and become a scalable enterprise platform for better business outcomes.

Example: In a future-state design, transactional accounts payable, payroll administration, employee data maintenance, indirect procurement support, and order entry may move into a centralized shared services or outsourced delivery model, while policy ownership, exception management, business partnering, and strategic decision-making remain in the retained organization. Centers of expertise can then focus on higher-value capabilities such as analytics, category strategy, workforce planning, and continuous improvement.

3. Use automation and digital enablement to redesign work

Automation should not be treated as a bolt-on cost reduction tool. It should be embedded into the design of the future shared services model. The most effective organizations ask four questions for every activity: Can we eliminate it? Can we automate it? If not, what is the optimal service delivery model? How can we optimize external spend or supplier performance?

Robotic process automation, workflow, analytics, artificial intelligence, and modern SaaS platforms can materially improve productivity, accuracy, speed, and auditability. Intelligent process automation candidates often exist across finance and accounting, order management, procurement, HR, help desk, supplier management, reporting, and analytics. However, automation value depends on disciplined assessment: process suitability, transaction volume, exception rates, rules-based decisioning, system access, security, control requirements, and expected return on investment.

Digital enablement also changes the role of shared services. Instead of simply processing transactions, the organization can provide insights, improve compliance, increase business agility, and create a better employee, manager, supplier, and customer experience. Platforms like UST SmartOps show what this looks like in practice: the goal is not just fewer manual steps; it is a smarter, more responsive operating model.

Example: In procure-to-pay, automation can help match invoices to purchase orders, route exceptions, update supplier master data, generate payment files, and produce compliance reports. In HR, automation can support candidate scheduling, employee record updates, payroll data validation, benefits administration, and routine employee inquiries. These examples show why automation should be evaluated at the process-step level rather than applied broadly to an entire function.

4. Build governance, service integration, and cost transparency into the model

As shared services expands across functions, geographies, providers, and technologies, governance becomes a critical success factor. The organization needs clear decision rights, service standards, demand management processes, performance metrics, escalation paths, financial controls, and executive oversight. Without governance, shared services can become another layer of complexity rather than a platform for simplification.

Service integration is especially important in hybrid models that combine captive centers, outsourcing providers, centers of expertise, automation platforms, and retained teams. Multi-sourcing can create flexibility and access to best-of-breed capabilities, but it also requires more sophisticated management. Leaders must define how services are integrated, how suppliers are managed, how service levels are measured, and how business value is tracked.

Cost transparency is equally important. A mature model provides leadership with visibility into demand, consumption, unit costs, supplier performance, technology costs, and investment tradeoffs. This transparency enables the organization to identify quick wins, prevent cost creep, reinvest savings into strategic priorities, and continuously optimize the service portfolio.

Example: A hybrid shared services model may include an internal service center, a managed services provider, an automation center of excellence, and several retained functional teams. Without integrated governance, each group may optimize its own metrics while the end-to-end process still performs poorly. A common governance model can define service ownership, escalation rules, demand intake, supplier scorecards, unit-cost reporting, and executive review cadence so that performance is managed across the full value chain.

5. Treat change management as a core transformation workstream

Organizations often underestimate the level of change required to transform shared services. New service delivery models affect roles, reporting lines, processes, technology, locations, decision rights, measures of success, and the experience of employees and business stakeholders. If the organization does not manage these impacts deliberately, resistance, confusion, and shadow processes can undermine the transformation.

Change management should begin early and continue through design, build, transition, stabilization, and continuous improvement. It should include executive alignment, stakeholder engagement, communication planning, change readiness assessments, role mapping, training, risk mitigation, and feedback loops. A strong program also creates a guiding coalition and helps leaders explain not only what is changing, but why the change matters.

Effective change management also reinforces the purpose of the transformation: better service, better controls, better experience, and better business value. When stakeholders understand the future model and see how it supports their goals, adoption accelerates and benefits become more sustainable.

Example: When order management work moves from local teams into a global service model, employees may worry about role changes, business leaders may fear loss of control, and customers may experience new handoffs. A structured change program can address these concerns through stakeholder mapping, leadership alignment, transition communications, training, role clarification, readiness checkpoints, and feedback channels before, during, and after migration.

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Conclusion

For organizations ready to transform their shared services organization, the opportunity is significant, but so is the risk of half-measures. A redesigned service model can unlock lower cost, better experience, stronger controls, faster cycle times, and richer insight. But those outcomes will not come from incremental tweaks to today’s model. They require leadership alignment, disciplined execution, and a willingness to challenge long-standing assumptions about where work should sit, how it should flow, who should perform it, and how digital transformation value should be measured.

The choice for leaders is becoming clear: shared services can remain a necessary support function, or it can become a strategic engine for enterprise performance. The difference lies in execution. Organizations that know their baseline, design the model deliberately, automate intelligently, govern rigorously, and manage change proactively will be positioned to convert shared services from an efficiency initiative into a durable source of competitive advantage.

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From assessment to execution

The best shared services transformations move quickly but not casually. They typically follow a structured path: mobilize the team, collect and validate data, assess the current state, define the target operating model, quantify the business case, prioritize initiatives, build the roadmap, and govern execution through clear milestones and executive readouts.

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How UST Can Help

UST helps you move beyond incremental efficiency and turn shared services into a governed, scalable engine for enterprise value. We give your leadership team a clear, fact-based view of where value is trapped today, and a practical path to unlock it quickly. In as little as 12 weeks, UST can help mobilize stakeholders; validate current-state cost and performance data; assess sourcing, operating model, service integration, technical environment, and automation opportunities; and translate the findings into an executive-ready roadmap with prioritized quick wins, investment choices, governance actions, and sustained savings levers.

The value is immediate and strategic: release capital to fund digital priorities, reduce avoidable cost and complexity, strengthen controls, improve service performance, and create the transparency needed to prevent cost creep. For clients ready to make shared services a competitive advantage, UST brings the proven structure, analytical rigor, automation expertise, and execution focus to turn opportunity into measurable results.

If your shared services organization is still measured primarily by cost reduction, raise the bar now. Start with three questions: Do we have a fact-based view of current performance? Do we have a clear target operating model? And do we have a sequenced roadmap that connects automation, governance, sourcing, technology, and change into one integrated agenda?

If any answer is no, the gap usually traces to the same root: automation treated as a bolt-on instead of built into the operating model itself. That is the largest value lever left untouched and the place to start.

See how UST embeds business process automation at the process-step level, where the value lives.
Explore UST Business Process Automation

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Frequently asked questions

What is shared services transformation?

Shared services transformation is the shift from running shared services as a cost-focused back office to operating it as a digital, governed, enterprise-wide platform. It combines a fact-based baseline, a deliberately designed operating model, embedded automation, integrated governance, and structured change management.

How is a shared services operating model different from a location strategy?

A location strategy decides where work is performed; an operating model decides how value is created. It defines what is retained, centralized, automated, or outsourced, how services are governed, what technology enables them, and what capabilities the retained organization needs.

Where does automation deliver the most value in shared services?

Automation delivers the most value when evaluated at the process-step level rather than applied to whole functions. High-value candidates include invoice matching and exception routing in procure-to-pay, and record updates, payroll validation, and routine inquiries in HR.

How quickly can a shared services assessment produce a roadmap?

With a structured approach, organizations can move from mobilization through baseline validation to an executive-ready roadmap with prioritized quick wins in as little as 12 weeks.