Management

Outsourcing/Shared services: Aligning the organizational complexity to the defined environment

Organizations have to concentrate their organizational effort on their core competences. The pressure on prices, quality and efficiency is increasing. Thus, organizations have to focus more on their core processes, and all other processes have to be structured as lean and standardized as possible. In the end, all organizational units are competing against the market. In case a non-business-critical service can be bought-in with a better organizational fit, it should be outsourced. Another possibility is to create shared services, where the organizational units within a group can be more focused, standardized and organizationally fit.


In order for organizations to remain agile to market requirements, they have to think about whether their business units are fitting best to these requirements. Both strategies—outsourcing and shared services—are possible solutions to create a higher organisational fit to the organisations.
Outsourcing: Outsourcing is a possibility to buy-in knowledge by more or less upfront investments of the organisations. A part of the organisational processes can also be sourced to other organisations, which then need to be inter-linked with their own processes.
Shared services: In case a group of companies deliver the same service to more than one organization, shared services are a possibility to standardize this service and get a better organizational fit by lean business processes. Shared service must not mean losing the local connections of the organization. For example, virtual shared service is a possible solution. They are a possibility to combine different tasks and increase the interconnection between these services.

To sum it up, depending on the proposed market strategy, organizations have a variety of possibilities to cope with quick changes in markets.

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