Service Level Agreement Shared Service Center

The introduction of key performance indicators aims to ensure clarity and accountability of end-to-end processes. Movements in PPCs can be used as lead and lag indicators to correct service outages. Chargeback is a mechanism that defines the basis for billing for customer services. It will be necessary to first determine your operating model. Are you a cost center or a profit center? If it`s a cost point, your goal is to cover all costs. If you are a profit center, the goal is to straighten yourself up too much and get a profit that normally comes back into the company to fund continuous improvement projects. There are many alternatives to defining a repayment method. Some work on the budget, budgeted volumes or actual transactions. You should also opt for your return drivers who determine how you allocate the fees. A common approach is to work on a comprehensive cost-covering model and assign costs to customers based on their actual usage. The discussion continued with a series of views and perspectives shared by participants, including representative comments below: The Service Level Agreement identifies the inputs that the client needs and assigns responsibility for the provision of the service between the SSC and the client.

It also defines the appropriate service levels to meet customer needs. The SLA`s explanatory memorandum is that it clarifies the relationship and expectations between the SSC and the customer and provides a framework for performance measurement and process improvement, improves understanding and reinforces shared responsibility. A common mistake is to grant the shared services centre a status equivalent to that of a business unit or department. This creates confusion, as it conflicts with the primacy of the units responsible for managing market opportunities. Shared service centers should also not report to their corporate human resources (with the exception of the Financial Shared Service Center), as there is a risk that the company`s human resources department will use the shared service center to provide functional authorities. Business unit managers will then perceive the shared service center as an implicit control device that affects the quality of services. Another critical issue in shared service centers is how processes are standardized. At the end of the day, shared service centers must contribute to the competitiveness and (financial) performance of the company. As competition shifts towards business model innovation and in this context increased momentum needs to be met in customers` composite value promises, changes in customer value promise need to be translated into (back-office) processes in a timely and efficient manner. Therefore, the standardisation of processes cannot be based on “good practice processes”, as previously promoted by IT systems (companies) [5], but must be based on modularity. [6] It is equally important that by using a shared service center in a multi-unit organization, the board of directors is accountable to the performance of the shared service centers vis-à-vis the leaders of the business entity.

Indeed, the use of shared service center services is mandatory, the board reduces the volume of resources of the Business Units, while the responsibility of the business unit manager for business development remains unchanged. The performance report integrates the four dimensions of the incitive compensation report, score balance, process report and customer reporting (vs. SLA). .