Centralising versus sharing, and why the difference matters
The term ‘shared service’ is very popular as companies see it as a means to reduce cost through economies of scale. The same principle is at work when opting for centralisation, but there are distinct differences. This post describes how shared service centre differ from centralisation and why it matters to make this distinction. What do sharing and centralising have in common? Common ground 1 : I found among others the following definitions they are an indication that both terms are closely related: Centralisation : is the process by which the activities of an organization, particularly those regarding decision-making, become concentrated within a particular location and/or group. Shared Service Centre : A shared service centre (SSC) is a centralised business unit that undertakes internal business functions for divisions or subsidiaries of a particular company, rather than having those functions conducted separately Common ground 2 : shared objective is striving for improved productiv...