Shared Services Center
What is a shared services center?
A shared services center is a centralized team, often built offshore, that consolidates support functions like finance, HR administration, or IT support for multiple business units within a company. Rather than each division maintaining its own separate team for these functions, a shared services center pools that work into one location to standardize processes and reduce duplication across the organization.
The underlying logic is straightforward. If five different business units are each running their own accounts payable process with their own tools and their own small team, a shared services center consolidates all of that into a single, more efficient operation serving all five simultaneously, typically at meaningfully lower total cost.
Why India is a common location for a shared services center
India shows up constantly in shared services center planning because of the combination of skilled talent and cost efficiency available there for finance, accounting, and administrative functions. A company running a shared services center in India can achieve real economies of scale while enforcing more consistent processes than a fragmented, region-by-region support structure would allow.
Beyond the cost advantage, India's talent pool for these specific functions has matured considerably over the past two decades, meaning a shared services center there isn't just accessing lower-cost labor but genuinely experienced professionals who've often worked at other established centers and bring that operational knowledge with them.
Building a shared services center without the entity headache
Historically, setting up a shared services center meant registering a legal entity first, a process that could take months once you factor in incorporation, tax registration, and opening a compliant local bank account. That timeline mismatch, wanting to consolidate operations quickly but facing a slow entity setup, is exactly the gap an Employer of Record closes. With kaam.work handling employment, a company can staff its shared services center in India and have people working within weeks rather than waiting on entity registration to conclude.
This matters particularly for companies testing whether a shared services center model even fits their operations before committing to the larger investment a legal entity represents. Starting through an EOR lets a company validate the concept with real hires and real output before deciding whether full ownership makes sense.
What makes a shared services center actually succeed
Beyond hiring, a functioning shared services center needs clear service level agreements with the business units it supports, so expectations around turnaround time and quality are explicit rather than assumed. Without these agreements, business units that previously had dedicated local support can feel like their needs are being deprioritized once that work moves into a shared services center serving multiple units at once.
It also needs genuine investment in process documentation, since the whole point of centralizing is to standardize how work gets done, not just relocate the same fragmented approach to a cheaper location. A shared services center that simply replicates five different business units' inconsistent processes in one place hasn't actually captured the standardization benefit the model is supposed to deliver.
The difference between a shared services center and a Global Capability Center
A shared services center typically focuses on transactional, process-driven work, payroll processing, accounts payable, routine HR administration, work that follows well-defined procedures and benefits from consistency and scale. A Global Capability Center tends to take on broader, more strategic work, sometimes including product development or research functions. Companies sometimes evolve from one into the other as their India presence matures and the scope of work expands beyond pure transactional processing.
Frequently asked questions
- Does a shared services center require its own legal entity in India?
- Not necessarily. An Employer of Record lets a company staff a shared services center without registering an entity first, which is particularly useful for validating the model before committing further.
- What functions typically move into a shared services center?
- Finance, accounting, HR administration, and IT support are among the most common functions consolidated this way, since they tend to follow standardized processes that benefit from centralization.
- How is a shared services center different from a Global Capability Center?
- A shared services center generally handles more transactional, process-driven work, while a Global Capability Center takes on broader, more strategic responsibilities like product development.
- Why do companies choose India for a shared services center?
- The combination of skilled talent and cost efficiency for finance and administrative functions makes it a common choice, supported by a mature talent ecosystem.
- What makes a shared services center actually work well?
- Clear service level agreements with the business units it supports, and genuine investment in standardized process documentation rather than replicating fragmented existing processes.
