Making Non-Revenue Producing Business Functions 'Profitable' (page 5 of 5)

You can and should look at the cost of performing a specific activity, such as processing invoices or answering user inquiries. The reason is twofold: first, the costs of these individual services are distributed among the business units served; secondly, it gives you an accurate measurement to analyze performance and determine how to run each service more cost- efficiently.

As with any business unit, you also should establish meaningful targets. For example, Shared Service Centers can issue Service Level Agreements (SLA's) to the national offices that they serve that would cover services, service levels, reporting structures and support. To monitor their progress, the Shared Service Centers can provide monthly balanced scorecards using the Key Performance Indicators (KPI's) specified in the SLA, such as per-activity transactional volumes and the attendant costs.

The End Goal: Profiting from Non-Revenue Business Functions
In summary, the shared services cannot succeed in a vacuum. The model requires a commitment from the company leadership to consolidate data and standardize business practices across the enterprise. The Shared Service Centers must be given the autonomy, resources and responsibilities to provide centralized hubs of competitive, processing services. For corporations looking to leverage the fiscal advantages of business automation, shared services represent a long-term solution for operating smarter business with better data, more efficiently and at lower cost - making non-revenue business functions a source of "profit."