In The Private Sector
The private sector has been moving towards shared services since the beginning of the 1980s. Large organizations such as the BBC, BP, Bristol Myers Squibb, Ford, GE, HP, Pfizer, Rolls-Royce, ArcelorMittal, and SAP are operating them with great success. According to the English Institute of Chartered Accountants, more than 30% of U.S. Fortune 500 companies have implemented a shared-service centre, and are reporting cost savings in their general accounting functions of up to 46%.
The conventional accounting practice used to generate these figures is disputed however by management thinker Professor John Seddon who argues that the measuresment known as 'unit cost' tells you nothing about overall costs. Overall costs include 'failure demand' which is defined as a failure to do something or do something right for the customer.
Read more about this topic: Shared Services
Famous quotes containing the word private:
“Consider any individual at any period of his life, and you will always find him preoccupied with fresh plans to increase his comfort. Do not talk to him about the interests and rights of the human race; that little private business of his for the moment absorbs all his thoughts, and he hopes that public disturbances can be put off to some other time.”
—Alexis de Tocqueville (1805–1859)