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Shared Service Center Service Level Agreements

by on April 12th, 2021

This article provides an overview of the most common uses for ALS, their main components and a list of best practices to ensure that both service providers and customers receive what they expect from ALS. Key components of ALS generally include objective and performance services, governance model, operating hours and exceptional circumstances, performance measurement and information, non-compliance management, customer feedback, support service, quality management and process improvement. The ALS also defines the general approach to prices and the climbing model. In some SSCs, account manager roles have been introduced to implement and operate the service management framework. This role serves as an intermediary between the client and the SSC. In my experience, these roles have proven to be very valuable and allow for the implementation of a partnership approach. BY THE AUTHORMIchelle O`Connor has been working in shared services for nine years and has worked in both financial and SHAREd HR services. Companies worked for BHP Billiton, Boral, OneSteel and Jones Lang LaSalle. O`Connor has been secretary of the Australasian Benchmarking Association for three years and has been a member since 2003. The discussion continued with a series of knowledge and perspectives shared by participants, including representative comments below: The Service Level Agreement identifies the entries requested by the client and assigns responsibility for providing service between the SSC and the client. In addition, appropriate service levels are defined to meet customer needs. THE reason for ALS is that it clarifies the relationship and expectations between SSC and the client, provides a framework for measuring performance and improving processes, improving understanding and improving collective accountability.

Chargeback is a mechanism that defines the basis for collecting fees for customer services. It will be necessary to determine your operating model first. Are you a cost centre or a profit center? If a cost point, then your goal is to recover all costs. If you work as a profit center, then the goal is to recover and make a profit that is normally reintroduced into the operation to fund continuous improvement projects. There are many alternatives to determining a return method. some work on budgets, budgeted volumes or actual transactions. You will also need to decide on your mirrors, which will determine how to allocate costs. A common approach is to use a comprehensive cost recovery model and allocate costs to customers based on their actual use. The performance report incorporates the four dimensions of the incentive compensation report, the dashboard, the process report and the customer report (compared to sLA). It enables the SSC to measure and track organizational performance, operational performance, after-sales service delivery and individual performance. Service Level Agreements (SLAs) can be an excellent tool to help build relationships and set expectations between shared services and customers.

SLAs can also become unnecessarily bureaucratic, cumbersome and have unintended negative consequences. The appropriate attention and development of ALS can be of great benefit to shared service leaders as their services and results mature. Based on my experience, I believe that a good service level agreement, backed by strong performance, a robust pricing mechanism and a customer management plan, leads to a win-win partnership between the service center and the company.

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