Running Head: SHARED SERVICES
Shared Services: An Organizational Design
Proposal for Coca-Cola Enterprises Inc.
Shared Services is a trend that has quickly taken shape over the past decade. A shared services center is a separate unit or subsidiary of the organization that is responsible for all or most human resources support functions, to include human resources (HR), accounting, compensation, benefits and payroll (IOMA, 2001). Many organizations are moving to this type of centralized and consolidated structure, with manufacturing companies (28%) leading the tide (IOMA, 2001).
The desire of move towards this type of structure is based on the need to lower overall costs, improve efficiency and consistency, and reduce labor costs (HR Focus, 2008). Administrative matters related to human resources functions have frequently consumed a large portion of HR’s time, thereby limiting the availability to focus on more strategic undertakings, such as organizational development and talent management.
In a benchmarking survey conducted by The Hackett Group, companies that had adopted a shared services model, which included the centralization of human resources functions, reported a reduction of processing costs by 21 to 80%, dependent upon how decentralized the processes were previously (BusinessWeek, 2007). According to this survey, the savings mostly came from a reduced HR headcount, with an average spending decrease of 13% on human resources per employee (2007).
Coca-Cola Enterprises Inc. The organization
Coca-Cola Enterprises Inc. (CCE) is the world’s largest marketer, producer and distributor of Coca-Cola products in the world. CCE buys the syrup from The Coca-Cola Company and combines it with other ingredients to create some of the world’s greatest brands and beverages. Coca-Cola Enterprises distributed two billion physical cases of beverages in 2007, which is equivalent to 42 billion bottles and cans and nearly $21 million in annual revenues.