Shared Services is an operational model where centralized support functions serve multiple business units or departments within an organization. Shared Services help organizations improve their efficiency, reduce costs, and enhance customer satisfaction. However, to measure the performance of shared services, it is essential to track specific metrics known as Key Performance Indicators (KPIs). In this article, we will discuss 23 KPIs for Shared Services that organizations can use to assess their performance and improve their operations.
KPIs for Customer Service
Average Handling Time (AHT)
AHT measures the average time it takes for a customer service representative to handle a call or respond to a customer’s request. AHT directly affects customer satisfaction, and therefore it is a crucial KPI for Shared Services. Reducing AHT can lead to faster customer resolution times and an increase in customer satisfaction.
First Contact Resolution (FCR)
FCR measures the percentage of customer inquiries or issues that are resolved on the first interaction with a customer service representative. A high FCR indicates that the Shared Services team is capable of resolving customer issues efficiently, resulting in satisfied customers.
Customer Satisfaction (CSAT)
CSAT measures customer satisfaction levels with the Shared Services team’s service. A low CSAT score can indicate that customers are dissatisfied with the service they are receiving, and the team needs to improve its service quality.
Net Promoter Score (NPS)
NPS measures the likelihood of a customer recommending the Shared Services team to others. A high NPS indicates that customers are satisfied with the service they are receiving and are likely to recommend the team to others.
KPIs for Financial Management
Accounts Payable (AP) Processing Time
AP Processing Time measures the time it takes for the Shared Services team to process an invoice or payment. A low AP Processing Time indicates that the team is processing payments quickly, resulting in improved vendor relationships and better cash flow management.
Days Sales Outstanding (DSO)
DSO measures the number of days it takes for the Shared Services team to collect payment from customers. A low DSO indicates that the team is collecting payments apace, resulting in better cash flow management and reduced risk of bad debts.
Cost per Transaction
Cost per Transaction measures the average cost of processing a transaction. A lower cost per transaction indicates that the Shared Services team is efficient and effective in its financial management operations.
Purchase Order (PO) Accuracy
PO Accuracy measures the percentage of purchase orders that are processed without errors. A high PO accuracy rate indicates that the Shared Services team is processing purchase orders accurately, reducing the risk of incorrect orders or payments.
KPIs for Human Resources (HR)
Employee Satisfaction (ESAT)
ESAT measures the satisfaction levels of employees with the services provided by the Shared Services team. A high ESAT score indicates that employees are satisfied with the HR services provided, resulting in improved employee retention and engagement.
Employee Turnover Rate
Employee Turnover Rate measures the percentage of employees who leave an organization in a given period. A low turnover rate indicates that the Shared Services team is providing effective HR services that result in higher employee retention rates.
Time-to-Fill (TTF)
TTF measures the time it takes for the Shared Services team to fill a vacant position. A low TTF indicates that the team is efficient in its recruitment process, resulting in faster hiring and reduced recruitment costs.
Time-to-Hire (TTH)
TTH measures the time it takes for the Shared Services team to hire a new employee. A low TTH indicates that the team is efficient in its recruitment process, resulting in faster hiring and reduced recruitment costs.
KPIs for Information Technology (IT)
Application Availability
Application Availability measures the percentage of time that critical IT systems and applications are available for use. A high application availability rate indicates that the Shared Services team is providing reliable IT services to the organization.
Mean Time to Repair (MTTR)
MTTR measures the average time it takes for the Shared Services team to repair a critical IT issue. A low MTTR indicates that the team is effective in resolving IT issues, resulting in improved IT service levels.
User Satisfaction (USAT)
USAT measures user satisfaction levels with IT services provided by the Shared Services team. A high USAT score indicates that users are satisfied with the IT services provided, resulting in improved productivity and engagement.
First Call Resolution (FCR)
FCR measures the percentage of IT issues that are resolved on the first call or interaction with the Shared Services team. A high FCR indicates that the team is effective in resolving IT issues, resulting in improved user satisfaction and productivity.
KPIs for Procurement
Purchase Order (PO) Cycle Time
PO Cycle Time measures the time it takes for the Shared Services team to process a purchase order from creation to approval. A low PO Cycle Time indicates that the team is efficient in its procurement processes, resulting in faster order processing times.
Contract Compliance
Contract Compliance measures the percentage of contracts that are compliant with regulations and policies. A high contract compliance rate indicates that the Shared Services team is effective in managing contracts, reducing the risk of legal and regulatory issues.
Spend Under Management
Spend Under Management measures the percentage of an organization’s spend that is actively managed by the Shared Services team. A high spend under-management rate indicates that the team is effective in managing spend, resulting in improved cost savings and reduced risk.
Savings
Savings measures the amount of money saved by the Shared Services team through effective procurement processes. A high savings rate indicates that the team is effective in reducing costs and improving the organization’s bottom line.
KPIs for Shared Services Center (SSC) Operations
Service Level Agreement (SLA) Compliance
SLA Compliance measures the percentage of SLAs that are met by the Shared Services team. A high SLA compliance rate indicates that the team is meeting the service level requirements set by the organization, resulting in improved customer satisfaction.
Utilization
Utilization measures the percentage of time that Shared Services resources are utilized. A high utilization rate indicates that the team is effectively utilizing its resources, resulting in improved efficiency and reduced costs.
Cost per Full-Time Equivalent (FTE)
Cost per FTE measures the cost of hiring and retaining a Shared Services team member. A low cost per FTE indicates that the team is effectively managing its costs, resulting in improved financial performance.
Customer Complaints
Customer Complaints measure the number of complaints received by the Shared Services team from customers or business units. A low number of complaints indicates that the team is providing high-quality services, resulting in improved customer satisfaction.
Conclusion
In conclusion, Shared Services is an effective operational model that can help organizations improve their efficiency, reduce costs, and enhance customer satisfaction. However, to measure the performance of shared services, it is essential to track specific metrics known as Key Performance Indicators (KPIs). The 23 KPIs for Shared Services discussed in this article cover various aspects of shared services operations, including customer service, financial management, human resources, information technology, procurement, and shared services center operations. By tracking these KPIs, organizations can assess their performance and identify areas for improvement.
FAQs
- What are Shared Services? Shared Services is an operational model where centralized support functions serve multiple business units or departments within an organization.
- Why is it essential to track KPIs for Shared Services? KPIs help organizations measure the performance of their shared services operations and identify areas for improvement.
- How many KPIs are there for Shared Services? There are 23 KPIs for Shared Services discussed in this article.
- What areas do the 23 KPIs for Shared Services cover? The 23 KPIs for Shared Services cover various aspects of shared services operations, including customer service, financial management, human resources, information technology, procurement, and shared services center operations.
- How can organizations use KPIs to improve their Shared Services operations? By tracking KPIs, organizations can assess their performance and identify areas for improvement, resulting in improved efficiency, reduced costs, and enhanced customer satisfaction.