Final answer:
Shared service centers are used to streamline common business functions like payroll, procurement, accounts payable/receivable, travel expenses, tuition assistance, and pension administration, thereby improving efficiency and reducing costs.
Step-by-step explanation:
Shared service centers consolidate common processes from various departments to improve efficiency and reduce costs in businesses. Some of the most common processes that are integrated into shared services include payroll, procurement, accounts payable/receivable, management of travel expenses, tuition assistance programs, and pension administration. By centralizing these functions, organizations aim to standardize procedures, leverage economies of scale, and enhance service delivery across the company.
For instance, within a shared service center handling payroll, procedures would be streamlined for pay schedules, timesheet submission, overtime management, and vacation or time off requests. Accounts payable and receivable processes would be standardized to efficiently manage the flow of money into and out of the company. Procurement processes might be optimized for bulk purchasing to secure better pricing or to manage supplier relationships more effectively.
Benefits such as tuition assistance and pension administration become more centrally managed, ensuring consistency and compliance across different departments and potentially reducing the need for duplication in administrative roles that were earlier present in separate business units. By leveraging shared services, businesses can focus more on their core activities while ensuring that supportive functions are managed more effectively and efficiently.