A shared service is a business model where specific operational functions, such as finance, human resources, or information technology, are consolidated into a centralized unit and shared among different departments or business units within an organization. This centralized service center aims to improve efficiency, reduce costs, and enhance overall effectiveness by streamlining processes and standardizing services. Shared services often involve the use of common resources, technologies, and expertise to serve multiple parts of an organization, fostering economies of scale and resource optimization.

A Global Business Service (GBS) is a centralized, integrated entity within an organization that provides shared services on a global scale. GBS goes beyond traditional shared services by consolidating and managing various business functions and processes, not only within a single location but also across different regions and countries. This model is designed to optimize efficiency, standardize processes, and improve collaboration across the entire organization. This approach allows organizations to leverage economies of scale, implement standardized practices, and enhance overall performance.

Shared services and GBS lead to increased efficiency, reduced operational costs, improved service quality, and allow for a more strategic allocation of resources.

Common functions include HR, IT, finance, customer support, procurement, and logistics, but can vary based on the organization’s needs.

GBS integrates a more extensive range of functions and processes, aiming for a holistic approach to service delivery across the entire organization on a global scale.

Successful implementation relies on a perfect synchronization of various factors such as: clear strategy, stakeholder buy-in, effective change management, process mapping and standardization, talent management and training, clear definition of service level agreements and corresponding reporting, continuous process improvement and a strong customer focus.