Nearly 69% of organizations currently operate under a shared services model or are actively transitioning toward it, with an additional 16% planning to make the move within five years. Moreover, nearly 80% of investment firms already outsource significant back-office functions.

The numbers tell a clear story: consolidating administrative functions into a centrally managed shared services organization delivers efficiency and cost savings that decentralized operations simply can't match. Accordingly, understanding what is a shared services model and following shared services model best practices becomes critical for staying competitive.

The challenge? Implementing this shared services operating model without disrupting your daily operations. In this guide, we'll walk you through the process step-by-step, helping you realize the benefits of shared services model while maintaining business continuity.

What Is a Shared Services Model and Why It Matters

Understanding the Shared Services Operating Model

A shared services model centralizes support functions into one unified unit that serves the entire organization. Instead of each department maintaining its own finance, HR, or IT staff, a single specialized team provides these functions company-wide. In effect, this creates what many call a "business within a business" structure where the shared services center operates like an internal service provider.

The model relies on Service Level Agreements (SLAs) that define performance expectations and quality standards between the shared services organization and its internal customers. These formal agreements establish clear accountability and measurable outputs, distinguishing shared services from traditional centralization. The center charges back services to business units using transfer pricing mechanisms, ensuring transparency in cost allocation.

Key Benefits of Shared Services Model

Organizations implementing shared services typically achieve cost reductions exceeding 30% through higher staff utilization, cross-training, and lower labor rates. According to industry data, 55% of organizations with a global business services leader role have achieved over 20% average cost savings. Some organizations report cost reductions as high as 70%, with the average around 50%.

Beyond financial savings, the model delivers operational advantages. Standardized processes reduce variations and enhance service quality across all units. Companies gain scalability that allows rapid integration of new business units without building support functions from scratch. The payback period for shared services initiatives typically runs 1.5 years or less.

Moreover, consolidating data into a centralized repository provides leaders with a single source of truth. This foundation enables stronger analytics, clearer reporting, and tighter control over financial and operational performance. Organizations also report improved talent acquisition, particularly when accessing skilled resources in other geographies at scale.

Common Functions Suited for Shared Services

Organizations commonly consolidate these administrative functions into shared services:

• Finance and Accounting: Accounts payable, accounts receivable, payroll, general ledger, and financial reporting represent the most prevalent shared services function, adopted by 90% of organizations

• Human Resources: Payroll administration, benefits management, onboarding, and employee help desks are used by 57% of organizations

• Information Technology: Help desk support, network management, and application support centralize technology services for 57% of companies

• Procurement: Vendor management, purchase order processing, and strategic sourcing consolidate under shared services in 53% of organizations

Work retained in-house typically requires direct customer interaction, specific business knowledge, or handles sensitive information, including legal, investor relations, and treasury functions.

Planning Your Shared Services Implementation Without Disruption

Assess Your Current Operations and Readiness

Before launching your shared services initiative, conduct a systematic readiness assessment. This evaluation examines your organization's preparedness, willingness, and ability to implement change. Readiness assessments identify potential risks and root causes of resistance, allowing you to create plans that better equip the organization.

Start by defining the scope and depth of your planned changes. Cultural awareness ranks as important or very important to change management for 87% of participants. Organizations already experiencing significant change face added difficulty when introducing additional initiatives, leading to change saturation.

Assess employee readiness to gage whether you can expect high or low resistance. Understanding these factors proves critical for tailoring your approach to support people through transitions. Following this assessment, analyze all collected data to evaluate your organization's change readiness.

Set Clear Goals and Success Metrics

Establish specific objectives beyond cost reduction alone. Your goals may include improved process efficiency, better service levels, greater scalability, or implementing global delivery models. Select a handful of relevant key performance indicators for activities performed by shared services.

Track productivity metrics and transaction data to monitor work volumes and their relationship to processing time and error rates. Customer satisfaction surveys gage campus opinion and solicit feedback on operations. Even institutions not yet ready for organizational change can begin tracking baseline metrics now to build a data-driven mindset and enable analysis later.

Build Your Business Case and Timeline

Develop a comprehensive business case that includes project objectives, benefits, challenges, timeline, risks, and financials. Perform a baseline assessment of current operations through interviews and process walkthroughs with subject matter experts. Quantify the number of full-time equivalents per process to estimate the size of your future organization.

Identify one-time costs including consulting fees, travel costs, severance, training overlap, hardware, and office improvements. Forecast both one-time and recurring costs against your current-state baseline.

Identify Which Functions to Consolidate First

Prioritize functions with high transaction volume, stable demand, and limited need for local decision-making. Standardize processes before consolidation to create the foundation for productivity gains and automation. Consider implementing incrementally rather than with a 'big bang' approach to minimize stakeholder resistance.

Connecticut Perspective: Hartford and Fairfield County

For Hartford, Greenwich, Westport, New Haven, and Fairfield County owners, shared services can be a smart pre-sale move because buyers pay for systems, not chaos. In Connecticut’s lower-middle-market, consolidating finance, HR, and procurement can improve EBITDA and reduce key-person risk, but only if local customer response times and compliance obligations stay intact. That balance matters in relationship-driven industries common across the region.

Step-by-Step Implementation Process

1. Secure Leadership Buy-In and Form Your Implementation Team

Present shared services as a strategic investment rather than an expense. Frame your proposal around ROI in productivity, retention, and organizational performance. Build a coalition by identifying influential stakeholders who can champion the initiative. Establish a governance committee to manage diverse opinions and provide formal escalation processes. Structure your team around workstreams such as organization design, process redesign, technology, and change management.

2. Design Your Shared Services Organization Structure

Three common models exist: centralized centers offering maximum efficiency through standardization, hub models serving aligned colleges or units, and unit-managed centers providing high customization. A majority of shared services centers report to finance executives like the CFO. Your choice depends on balancing process standardization efficiency against responsiveness to unit service expectations.

3. Choose Between In-House or Outsourced Model

The decision balances core competency, cost, and quality. In-house operations provide direct control and data security but require higher capital and ongoing recruiting effort. Outsourcing offers predictable costs, access to global talent pools, and 24/7 scalability. Organizations with sufficient scale can justify captive centers, while smaller operations often find greater efficiency partnering with third-party providers.

4. Standardize Processes Before Consolidation

Consolidating staff without standardizing underlying work undercuts efficiency opportunities. Create detailed process documentation through desktop procedures to manage effective transitions and train new staff. Standardized processes form the foundation for productivity gains and automation, making them easier to train, govern, and optimize over time. Process standardization before consolidation can deliver savings of 25% to 35% of administrative costs.

5. Select and Implement Technology Infrastructure

Companies optimizing operating models before ERP implementation experience more efficient paths to going live. Align your technology roadmap with the operating model early to avoid fragmented toolsets. Automation and analytics should be core design inputs from the outset, enabling scale as business needs evolve.

6. Execute Phased Rollout by Function or Geography

Break transitions into sequential waves rather than a 'big bang' approach. Organizations often phase implementations every three months, though shorter intervals work for less complex populations. Select initial launch groups with departmental buy-in, strong leadership, and willing participants who provide constructive feedback. This approach proves faster and less disruptive than simultaneous launches.

Managing Change and Maintaining Business Continuity

Communicate Transparently with All Stakeholders

A shared services transition represents a significant cultural shift that requires treating change management as a core workstream rather than an afterthought. Organizations that invest in dedicated change management resources report improved customer satisfaction and employee engagement. Multi-channel communication plans reinforce rationale behind shared services while promoting consistent messaging across face-to-face, on-demand, and proactive methods.

Effective communications should account for varied stakeholder segments with both standardized and tailored components. Business unit leaders need clarity on data visibility improvements, while front-line staff require information about new workflows and escalation paths. Single messages fail to meet diverse stakeholder needs.

Address Employee Concerns and Provide Training

Staff resistance typically stems from four common fears: job loss and skill development needs, losing control over day-to-day work, being left out of reorganization, and anxiety about changing job functions plus losing personal connections. Only 33% of shared services organizations have implemented formalized customer service training programs, yet service and responsiveness remain top priorities for business unit partners.

Address concerns transparently about position impacts. Some campuses falsely promise no job eliminations, while others overemphasize reductions as primary goals when departures and retirements drive most changes.

Maintain Parallel Operations During Transition

Running both old and new systems concurrently reduces failure risks during transitions. Parallel operations validate that new systems function correctly while keeping legacy systems operational, ensuring uninterrupted business processes even when issues surface. Maintain adequate staff at local sites during each transition phase.

Monitor Performance and Adjust Quickly

Track performance through dashboards monitoring key areas based on organizational structure. Performance measurement frameworks enhance client-provider partnerships through transparency and accountability, ensuring fact-based conversations supporting root cause analysis. Act on KPIs and adjust them over time if they don't meet their original purpose.

Conclusion

You now have a complete roadmap to implement shared services without disrupting your operations. The key is treating this as a strategic transformation rather than a simple cost-cutting exercise.

As long as you prioritize process standardization, communicate transparently, and roll out changes in phases, you'll minimize resistance and maintain business continuity. Start with your readiness assessment, build a solid business case, and tackle one function at a time.

The organizations achieving 30-70% cost reductions didn't get there overnight. They followed structured approaches, learned from early phases, and adjusted quickly based on performance data. You can achieve similar results with patience and commitment to the process.

Frequently Asked Questions

What is the first step to implement a shared services model?

Start by mapping every transaction, approval, and exception in the current process. That baseline shows which work is repetitive, which tasks need judgment, and where service delays occur. Without that visibility, centralization usually creates confusion instead of efficiency.

How do you avoid disrupting day-to-day operations during the transition?

Keep the old process running until the new one passes a pilot test, define clear service-level agreements, and train employees before the handoff. A phased rollout with backup owners and escalation rules reduces the risk of missed invoices, payroll issues, or customer delays.

What functions are best for shared services?

Finance, payroll, accounts payable, accounts receivable, HR administration, and procurement are common starting points because they are high-volume and repeatable. Functions that depend heavily on local relationships or specialized judgment usually need a slower transition or hybrid model.

Why does shared services matter in a sale process?

Buyers like businesses with cleaner processes, clearer controls, and lower dependence on a single location or manager. A well-run shared services model can improve EBITDA, reduce key-person risk, and make diligence easier, which can support value in a Hartford-area transaction.

If you are evaluating shared services before a sale or growth initiative, Transworld Business Advisors of Hartford Central can help you test the model, protect operations, and estimate the value impact. Request a confidential consultation or business valuation today.