Table of Contents

What Are Shared Services?

A Shared Services Model centralizes common business functions—such as Finance, HR, Procurement, IT Support, and PMO—into a single unit that serves multiple business units or geographies.

Instead of duplication across countries or divisions:

  • Processes are standardized
  • Technology is centralized
  • Talent is pooled
  • Governance is strengthened

For multinationals operating across 20–50+ countries, shared services became a business necessity, not a choice.

Why Multinationals Turned to IT Companies

Foreign multinationals initially experimented with captive shared service centers, but soon realized the complexity involved:

  • Multi-country compliance
  • 24×7 operations
  • Talent attrition
  • Technology modernization
  • Continuous process improvement

This is where IT services companies stepped in—not just as vendors, but as operating partners.

Key Drivers Behind Outsourcing Shared Services

1. Cost Efficiency with Predictability

IT companies operating from India, Eastern Europe, and Southeast Asia delivered:

  • Lower operating costs
  • Transparent pricing models
  • Outcome-based contracts

But more importantly, they offered predictable costs at scale, which CFOs deeply valued.

2. Mature Global Delivery Models

Indian IT firms pioneered the Global Delivery Model (GDM):

  • Follow-the-sun support
  • Offshore–Onsite balance
  • Centralized governance with local execution

This model aligned perfectly with shared services.

3. Process Excellence & Standardization

Most large IT companies institutionalized:

  • ITIL, COBIT, Six Sigma
  • PMOs and transition frameworks
  • Knowledge management systems

Shared services projects demanded discipline, and IT companies were already optimized for it.

From the COO chair, shared services evolved in three deliberate stages:

Stage 1: Stability First

  • Finance ops, HR ops, IT support
  • Focus: continuity, SLAs, risk containment

Stage 2: Efficiency & Standardization

  • ERP consolidation
  • Process harmonization
  • Automation and productivity benchmarks

Stage 3: Value & Intelligence

  • RPA and AI-led operations
  • Predictive insights for business leaders
  • Platform-based shared services

At this stage, IT companies stopped being service providers and became operational co-owners.

Why Indian IT Firms Dominated This Space

From a COO’s lens, Indian IT companies stood out for three reasons:

  1. Depth of Process Leadership – not just technical skills
  2. Talent Supply Chains that could scale reliably
  3. Cultural Alignment with Long-Term Operations, not short-term wins

They didn’t just “run shared services.”
They industrialized enterprise operations.

Risk Transfer: The Hidden Value Proposition

One often underappreciated benefit was risk redistribution.

By partnering with IT companies, enterprises transferred:

  • Talent risk
  • Technology obsolescence risk
  • Compliance execution risk
  • Continuity risk

This freed COOs to focus on:

  • Growth
  • M&A integration
  • New market entry
  • Digital business models

Categorized in:

Global Operations,