Shared Services

Elizabeth Ferrarini   Today’s Top Stories   or  Other Health Care Stories  

Gain a faster, cheaper way to manage workload From Laggard to Leader: Transforming the Data Center Google's Universal Search for Business Extending COBOL to SOA, Web Services and Beyond Extend, Replace, or Convert; which is the best way forward for COBOL Applications? Should You Install Messaging Security Software on Your Exchange Server? The Business Value of Tape Storage Computerworld Technology Briefing: An open-source path to optimal virtualization Learn-Fast Guide: Get Up to Speed on Green IT Sign up to receive Health Care Resource Alerts

November 27, 2000 (Computerworld) -- You don't have to sell Jack Cooper on the concept of shared services. Since 1997, productivity cost savings from Bristol-Myers Squibb Co.'s Global Business Services (GBS) unit have yielded the New York-based firm a cool $1.5 billion per year. The cost savings will be reinvested in areas like sales staffing and research "that will increase our competitive strengths," says Cooper, CIO at the $20 billion pharmaceutical company.

In 1995, a Bristol-Myers task force determined that the company could easily cut costs and improve productivity in two key areas: financial-transaction processing and manufacturing. The idea was to consolidate similar functions in each of these two areas across all of Bristol-Myers' global business units. "We didn't need 85 worldwide locations processing invoices," Cooper says.

			Shared Services: A Reading List Shared Services: Mining for Corporate Gold, by Barbara Quinn et al. (Financial Times Prentice Hall, 2000) Shared Services: Adding Value to the Business Units, by Donniel S. Schulman, Martin Hammer et al. (John Wiley & Sons, 1999) Internal Service Excellence: A Manager's Guide to Building World-Class Internal Service Unit Performance, by Richard D. Hays (Summit Executive Press, 1996) Implementing Shared Governance: Creating a Professional Organization, by Tim Porter-O'Grady (Mosby-Year Book, 1992)

A two-year re-engineering effort resulted in an integrated SAP-based enterprise resource planning network run by Bristol-Myers' Princeton, N.J.-based GBS group. The system handles everything from order entry to production sourcing.

"We formed an IT shared services [unit] to support GBS," says Cooper. "We wouldn't have the economies of scale or control of funds if we didn't have one instant service run by one IT group. Now, Wal-Mart gets one invoice showing all of our brands."

Both GBS and the IT shared services unit allocate their operating costs back to the business units. Specific criteria set by business units measure how each group performs.

"For IT, it's on-time delivery within budget and the business unit's satisfaction rating," Cooper says.

Sharing the Load

Bristol-Myers isn't alone. Nearly half of the Fortune 500 have set up shared services organizations, primarily to support financial transactions, followed by human resources and IT activities, according to Martin Hammer, a partner at PricewaterhouseCoopers in New York. The approach has been successful, he says, noting that "some companies have achieved 30% cost savings gains."

Hammer adds, however, that a company should generate at least $500 million in revenue "to benefit from the economies of scale shared services can provide."

Technology enables just about every type of shared service. However, IT isn't always part of an organization's mix of shared services.

For example, Darcy Volk, director of Blue Bell, Pa.-based Unisys Corp.'s shared services group in Bismarck, N.D., which handles accounts payable, travel reimbursements and sales commissions, must go through the company's central IT department to submit suggested changes to Unisys' three cash disbursement systems. The IT department's advisory board then prioritizes the requests.

Continued...
1 | 2 | NEXT  

Print this Story

Send Us Feedback

E-mail this Story

Digg this Story

Slashdot this Story

"When balancing the need for emergency access to electronic medical records against security concerns, patients are on the horns of..." Read more... "Instead of merely bringing back the most popular results for health-related searches, Hakia cross-references its results with sites certified by..." Read more... Read more health care posts or See all Blogs

At 10, Google reiterates commitment to CIOs Microsoft explains Seinfeld-Windows TV ad: just a 'teaser' Continuing coverage: Google's Chrome browser More top stories...

iPhone 3G owner sues Apple, AT&T over dropped calls, app crashes Mozilla: Firefox is faster than Chrome Upcoming Microsoft patch lineup could be 'massive,' says researcher

Microsoft warns of IE8 lock-in with XP SP3 Users of Windows XP SP3 who try out IE8 Beta 2 won't be able to uninstall either one under certain circumstances. Opinion: Why Google has lost its mojo -- and why you should care Google has gone from innovative upstart to fat-and-happy industry leader in what seems like record time. Preston Gralla explains. Review: Internet Explorer 8 Beta 2 offers some nifty new features Microsoft's latest beta of IE8 includes better tab management, new services such as Web Slices and Accelerators, and the new 'porn mode.' IT Schools to Watch 2008 These leading-edge graduate schools are moving at the pace of the IT workplace, delivering coursework that's relevant to today's IT professionals. Windows Vista A to Z Reviews, analyses, how-tos, visual tours, hot issues and predictions about Microsoft's new OS. More Continuing Coverage After 9/11: Homeland Security Apple's iPhone Ask a Premier 100 IT Leader Bill Gates steps down BlackBerry Legal Battle Data Security Breaches Electronic Voting Firefox H-1B Visas HP's Boardroom Scandal Handheld Devices Hurricane Katrina Aftermath Microsoft Legal Issues Microsoft's Vista Open Source RFID Technology SCO's Linux Fight Sarbanes-Oxley Act Spam Voice Over IP Wi-Fi Windows Meta File Vulnerability Windows XP Service Pack 3 IT Careers 2010 Four years from now, the IT field will be a vastly different place. Will you be ready? More Special Reports Premier 100 IT Leaders 2007 Best in Class 2006 Computerworld Horizon Awards 2006 Premier 100 IT Leaders 2006 Salary Survey 2007 Best Places to Work in IT 2007 IT Forecast 2007 Premier 100 IT Leaders 40 Years of Computerworld ASPs, Take Two Best Places to Work in IT 2003 Best Places to Work in IT 2004 Best Places to Work in IT 2005 Best Places to Work in IT 2006 Business Intelligence Home Runs Business Intelligence: Smarter BI Business Intelligence: The Future of BI CRM Goes Vertical CRM: Sober CRM Career Planning Guide 2005 Careers: IT Profession 2010 Computerworld Horizon Awards 2005 Data Management: Mining for Gems Data Management: Taming Data Chaos Development: Hard-Workin' Web Sites Development: New Tools New Choices Development: The New World of Application Development Development: The Web Services Tsunami Development: Web Services Hurdles Disaster Recovery: Preparing for the Worst E-commerce Grows Up E-mail/Groupware: Big Decisions Faces of Mobile IT Forecast 2006 Global Mobile Hardware: Multiple Cores, Multiple Challenges Hardware: On-Demand Un-Hyped Hardware: The Shape of Things to Come Horizon Awards: 10 Cool Cutting Edge Technologies IT Management: Guide to Managing Vendors IT Management: Navigating Global IT IT Management: Recovery Ahead IT Management: The Future of IT IT Management: The Resourceful Project Manager Innovative Technology Awards 2004 Management: Reinventing IT Microsoft in Transition Mobile/Wireless Leaders and Laggards Mobile/Wireless: The Untethered Worker Mobile/Wireless: Tiny Gadgets, Huge Costs Network Management: Taking Control Networking: Turbulence Ahead! Networking: VoIP Goes Mainstream Operating Systems: In the Slow Lane Operating Systems: Linux Goes Global Operating Systems: Should You Nix Unix? Outsourcing: Offshore Buyer's Guide Outsourcing: Outsourcing Dangers Premier 100 IT Leaders 2004 Best in Class Premier 100 IT Leaders 2005 Best in Class ROI: Do the Math! Salary Survey 2003 Salary Survey 2004 Salary Survey 2005 Security Action Plan Security: Compliance Headaches Security: Proactive Security Security: Risk and Reward Security: Tips From Security Pros Souped-up Security Storage: Battling Complexity Storage: Cheap & Secure Data Stores Storage: Stretching Your Storage Dollars Storage: The Lean Storage Machine Storage: The New Rules of Storage Storage: The Ultimate Backup Guide Supply Chain: Missing Links Supply Chain: RFID Reality Check The Business of Security Web 2.0 Security Wireless: Wireless At Work All Zones Application Performance Zone Business Continuity Zone The File Data Management Zone Security Management Zone ITIL Best Practices Zone The SAS Zone Business Intelligence and Analytics Zone Windows Protection Zone Identity & Security Management Zone See your link here

• At 10, Google reiterates commitment to CIOs
• iPhone 3G owner sues Apple, AT&T over dropped calls, app crashes
• Microsoft explains Seinfeld-Windows TV ad: just a 'teaser'
• More top stories