2. Challenge: Maintaining Service Quality While Reducing Costs

Cost reduction is one of the primary goals of shared services, but it should not come at the expense of service quality. Balancing cost efficiency with high-quality service delivery is a challenge that many organizations struggle with.

Solution: Implementing Service Level Agreements (SLAs) and Continuous Monitoring

• Define Clear SLAs: Establishing well-defined SLAs with internal customers is crucial. SLAs should outline the expected level of service, turnaround times, and key performance indicators (KPIs). This sets clear expectations and ensures that cost savings do not compromise service quality.
• Monitor and Improve: Continuously monitor service delivery against SLAs. Use feedback mechanisms, such as customer satisfaction surveys, to identify areas where improvements are needed. Implementing a culture of continuous improvement within the shared services team can help maintain service quality while optimizing costs.

Case Example: A financial services company introduced SLAs with its internal customers, ensuring transparency in service expectations. By regularly reviewing performance data and customer feedback, they managed to cut costs by 20% without compromising service quality.