Definition of Human Resources Shared Services

What Does Shared Services Mean, Anyway?  November 14, 2011 – 06:42 pm
Human Resources Shared Services Combined Field User Guide

The term “shared services” goes back over 15 years.  Many credit David Ulrich as the inventor of the term because it appears in his 1997 book HR Champions, which gave the shared services concept a big boost.  But Ulrich actually used the term to describe what certain companies were already doing.  In fact, the shared services term and concept began in finance several years before Ulrich’s book.  I, myself, got my start in shared services (and, yes, we used the term back then) at Georgia-Pacific Corporation in 1994.

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For the past three years, the Shared Services Institute has conducted an annual survey on HR delivery practices with a focus on shared services.  Based on this research I believe I can definitively say what shared services means. Nothing.

The original definition was just as the words imply, a delivery model to share services across business entities, thus the moniker “in-house outsourcing.”  Large multi-divisional companies, like Tenneco and Proctor & Gamble, created separate multi-functional service organizations that were designed to consolidate service functions across multiple business units.  These early adopters were going after consolidation economies primarily.  But the number of today’s “shared services” operations that serve organizations which do not have multiple business units and, if they do, have never maintained redundant business unit service delivery organizations, shows that this narrow definition can no longer be applied.

Source: Human Resources - Shared Services Institute

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