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:
“Hence, the less government we have, the better,—the fewer laws, and the less confided power. The antidote to this abuse of formal Government, is, the influence of private character, the growth of the Individual; the appearance of the principal to supersede the proxy; the appearance of the wise man, of whom the existing government, is, it must be owned, but a shabby imitation.”
—Ralph Waldo Emerson (1803–1882)