The first in a series of seminars aimed to predominantly support PhD students affiliated with the Centre for Global Sourcing and Services (CGSS) and to raise interest in the group’s research. These seminars provide a friendly and constructive environment to present research and gather feedback and suggestions. The seminars will also feature presentations from other members of the CGSS and will hopefully provide a valuable development tool for papers and research.
Title: The Charging Method of Support Services Provided By Shared Service Centres. Wednesday, 10th July 2013 (12:30pm -1:30pm) in BE.0.40 (School of Business and Economics), Loughborough University
Abstract: In the current global economic environment, managers are looking for ways to reduce costs, enhance performance and gain competitive advantages. Since supporting service costs have been continuously increasing in proportion to total costs, the managers’ focus is reducing not only production costs but also support service costs. Some organisations choose third party outsourcers while others choose to set up their own shared service centre (SSC) which consolidate support service activities into one separate business unit. Delivering high quality service across varied client divisions’ requirements within a changing business environment is the core business process of SSCs. However, the challenge faced by SSCs is how to deliver this at an appropriate cost or at a competitive price.
The charging of services provided by SSCs goes beyond a pure cost allocation problem and with increased service transparency and a greater demand for customised services, a more differentiated pricing method is required. Appropriate and efficient charging methods could drive best practice, change the service mix and thus improve organisational performance.
This literature research investigating the charging method chosen by different SSCs could start from theoretical origins. Drawing on work by Chandler (1962), Williamson (1975, 1979, 1985) and Eccles (1985), I set out the charging of support services provided by shared service centres from M-Form organisations, transaction costs economics and transfer pricing perspectives.