Building A Shared Services Model That Delivers Value
Higher education institutions are under constant pressure to improve service quality while managing constrained budgets, complex regulations, and growing expectations from students, faculty, staff, and governing bodies. Shared services can help institutions respond by consolidating selected administrative activities, standardizing processes, and applying specialized expertise across multiple departments or campuses.
A successful model is more than a cost-cutting exercise. It establishes a clear service relationship between a central team and its internal customers. When thoughtfully designed, it can reduce duplication, improve data quality, strengthen compliance, and allow academic and administrative units to focus on their core missions.
The strongest implementations begin with a practical understanding of institutional needs. They define which services should be centralized, which should remain local, and how performance will be measured. They also recognize that organizational change, communication, and trust are as important as technology or reporting lines.
Establish The Business Case
The first step is to define the problem the shared services organization will solve. Institutions may be dealing with inconsistent procurement practices, fragmented payroll support, duplicated financial reporting, uneven technology capabilities, or difficulty recruiting specialized staff. A shared model should address specific weaknesses rather than centralize functions simply because centralization appears efficient.
Baseline data gives the initiative credibility. Gather current spending, staffing levels, transaction volumes, processing times, error rates, customer satisfaction results, and compliance findings. Include the hidden costs of duplicated systems, manual workarounds, and delayed decisions. A realistic business case should account for transition expenses, new technology, training, communication, and potential retention challenges.
Budget discipline is especially important when deciding which activities to combine. Leaders can use a zero-based budgeting exercise to examine whether existing services, staffing patterns, and expenditures still support institutional priorities. This analysis helps distinguish essential capabilities from historical practices that may no longer be necessary.
The case should connect efficiency with institutional outcomes. For example, a centralized purchasing team may improve contract compliance and supplier terms, while a shared research administration office may help faculty submit proposals more accurately and quickly. This broader value proposition creates stronger support than projected savings alone.
Select The Right Services
Not every function belongs in a shared services center. Activities are strong candidates when they are transactional, repeatable, governed by common policies, and supported by reliable data. Accounts payable, payroll processing, procurement operations, travel administration, identity management, records processing, and routine reporting often meet these criteria.
Functions that require close knowledge of local relationships or academic priorities may need a different arrangement. Strategic budgeting, department-level financial advising, executive decision support, and sensitive employee relations work can remain within colleges or divisions, even when certain administrative components are shared. A hybrid model often produces better results than complete centralization.
Assess each service against several dimensions: process variation, demand volume, regulatory exposure, technology dependence, customer proximity, and the availability of qualified staff. A service with high volume and low variation is usually easier to consolidate than a service involving highly specialized judgment. The analysis should also identify dependencies, since moving one process may affect approvals, data ownership, or reporting responsibilities elsewhere.
A phased approach reduces risk. Institutions can begin with a limited group of services, test the operating model, and apply lessons before expanding. Early candidates should be important enough to demonstrate value but stable enough to avoid overwhelming the new organization during its first year.
Design Governance And Service Standards
Governance determines who makes decisions, resolves disputes, approves policy changes, and sets priorities. A shared services center should have an accountable executive sponsor and a governance body representing major customer groups. At a public university, this may include finance, human resources, information technology, academic leadership, campus operations, and institutional research.
The operating agreement should define roles in plain language. It should identify which decisions belong to the service center, which remain with departments, and where shared accountability applies. Clear responsibility assignment prevents staff from redirecting customers repeatedly or assuming that another group owns a problem.
Service-level agreements turn expectations into measurable commitments. They can specify processing times, escalation procedures, hours of support, documentation requirements, and reporting schedules. Standards should cover both speed and quality. A payment processed quickly but inaccurately can create greater institutional cost than a slightly slower payment completed correctly.
Governance also needs a reliable escalation path. Customers should know how to report recurring failures, request exceptions, or propose process improvements. Regular review meetings can examine performance trends, upcoming policy changes, staffing needs, and technology priorities. This creates a feedback loop that keeps the model aligned with institutional strategy.
Build The Operating Model
The operating model should describe how work moves from request to completion. Map current processes before redesigning them, including approvals, handoffs, systems, duplicate data entry, and points where work waits. Process mapping frequently reveals that the largest opportunities come from eliminating unnecessary approvals or standardizing forms rather than simply relocating staff.
Technology can support self-service, workflow automation, knowledge management, and real-time reporting. However, software will not resolve unclear policies or poorly designed processes. Institutions should simplify procedures first, establish data ownership, and then configure technology around the improved workflow. This sequence avoids automating inefficiency.
The following comparison illustrates how common service arrangements differ:
| Model | Best Fit | Primary Strength | Main Risk | Key Control |
|---|---|---|---|---|
| Centralized Center | High-volume, standardized work | Consistent processes and scale | Loss of local responsiveness | Service-level agreements |
| Federated Network | Related units with distinct needs | Shared expertise with local flexibility | Uneven practices | Common standards and shared metrics |
| Hybrid Model | Mixed portfolios and complex institutions | Balance between control and proximity | Unclear responsibilities | Detailed decision rights |
| Managed Service | Specialized or technology-intensive work | Access to external expertise | Vendor dependence | Contract governance and performance reviews |
Staffing decisions should reflect the capabilities required for the future state, not simply replicate current positions in a new reporting structure. Roles may shift from transaction processing toward quality assurance, analytics, customer support, process improvement, and relationship management. A skills inventory can identify training needs and potential gaps before implementation begins.
The customer experience deserves equal attention. A service center should offer intuitive request channels, searchable guidance, status visibility, and knowledgeable support staff. Internal customers are more likely to adopt the model when they can see where a request stands and receive consistent answers without navigating multiple offices.
Manage The Transition
Change management should begin before organizational charts are finalized. Leaders need to explain why the change is occurring, what will be different, how decisions were made, and how employees and customers will be supported. Communication should be specific to each audience: executives need financial and risk information, employees need clarity about roles, and departments need practical guidance about service access.
Employee involvement improves both acceptance and design quality. Staff who perform the work understand exceptions, informal dependencies, and customer concerns that may not appear in process documentation. Use working groups, pilot teams, listening sessions, and structured feedback to bring this knowledge into the implementation.
Training should cover new procedures, systems, escalation routes, service expectations, and decision rights. Managers also need guidance on reinforcing new behaviors. During the transition, institutions may need temporary staffing, parallel processing, or additional quality checks to protect critical services while the organization stabilizes.
A launch dashboard should track operational and people-related indicators. Useful measures include transaction cycle time, first-contact resolution, error rates, backlog volume, customer satisfaction, employee turnover, adoption of self-service tools, and cost per transaction. Establish the baseline before launch so that improvements can be measured accurately.
Measure Performance And Refine The Model
Shared services should be managed as an ongoing capability rather than a one-time restructuring project. Initial targets may focus on continuity and service stability, while later goals can address productivity, automation, customer experience, and strategic insight. Measures should be reviewed with service users, not developed solely by the central team.
Financial results require careful interpretation. Savings may come from reduced duplication, improved purchasing, lower technology costs, or more effective workforce deployment. Some benefits will appear as avoided costs, improved compliance, faster reporting, or reduced institutional risk rather than direct budget reductions. A balanced scorecard prevents leaders from sacrificing quality for a narrow savings target.
Benchmarking can reveal whether performance is improving relative to peer institutions and internal history. Professional networks serving higher education administrators are useful sources of operating practices, staffing comparisons, policy examples, and implementation lessons. Peer discussion is particularly valuable when an institution is deciding whether to expand shared services into sensitive or specialized areas.
Continuous improvement should be built into the governance calendar. Review root causes behind recurring service failures, prioritize improvements according to customer impact, and test changes on a manageable scale. Recognize teams that improve accuracy, reduce cycle times, or make services easier to use. A culture of improvement helps the organization remain responsive as institutional priorities and regulations change.
Priorities For A Stronger Implementation
Successful shared services depend on disciplined choices and sustained leadership attention. The following priorities help institutions protect service quality while pursuing efficiency:
- Start with a defined institutional problem and measurable baseline rather than a broad mandate to centralize.
- Choose services according to process characteristics, customer needs, risk, and strategic value.
- Establish decision rights, service standards, escalation paths, and data ownership before launch.
- Involve employees and service users in process design, testing, training, and performance reviews.
- Use a phased rollout with transparent metrics and regular adjustments based on evidence.
The model should evolve as the institution learns. A service that is appropriate for centralization today may later require greater local support, while a fragmented activity may become ready for consolidation after systems and policies mature. Periodic portfolio reviews help leaders make these decisions deliberately.
Senior business officers play a critical role in maintaining that discipline. They connect financial stewardship, operational performance, technology, facilities, human resources, and strategic planning so that shared services serve the institution as a whole. Their cross-functional perspective can prevent isolated decisions that improve one department while creating problems elsewhere.
A well-designed shared services organization gives public colleges and universities a practical way to increase consistency, strengthen accountability, and redirect expertise toward higher-value work. Begin with evidence, build trust through transparent governance, and treat service quality as a central outcome. TASSCUBO members can use peer collaboration and professional networks to compare approaches, share lessons, and move from a promising concept to a durable operating capability.