KPIs for Shared Services Center (SSC) Operations

One of the best tools to evaluate the effectiveness of an individual, team, or organization in achieving key business objectives is the Key Performance Indicator (KPIs). Simply put, KPIs provide quantifiable metrics that help organizations track progress toward specific goals and objectives. Depending on the type of business or project, KPIs can vary widely and are essential for monitoring performance, making informed decisions, and identifying areas that need improvement. KPIs are such an instrument or tool that ensures that an activity or process is followed effectively, and if deviates how to control it or make corrections to achieve the desired performance. In addition, the results of the achievement of KPIs can be used as a reference to reward employees and motivate the team for their best efforts.

Key Performance Indicators (KPIs)

Key Performance Indicators (KPIs) are essential for evaluating the Shared Service Centers (SSCs) performance and efficiency. Some of the commonly used KPIs to measure SSC operations are:

1. Cost Efficiency: By monitoring the KPIs related to operations, such as personnel costs, overheads, technology investments, and costs associated with processing each transaction, the SSC can keep track of the areas where costs are exceeding the budget and how to reduce this cost by taking corrective actions. Also, effective risk management through KPIs like tracking potential risks of fraud and compliance issues can prevent unexpected costly errors or fines.
2. Operational Efficiency: KPIs help track the total number of transactions processed, the average time taken, and the percentage of first-time-right rate reflecting the efficiency of SSCs. In addition, it helps identify the process automation rate versus manual.
3. Service Quality: One of the effective ways to measure the efficiency of SSCs is through KPIs related to customer satisfaction. A customer satisfaction (CSAT) score measures the level of satisfaction of both internal and external customers regarding the services provided by the shared service center. The error rate, response time, delivery timelines, and issue resolution impact the overall service quality and hence are taken into account while measuring the service quality through KPIs.
4. Employee Performance: KPIs also help in gauging the engagement of employees like the number of transactions and hours taken per employee indicating the efficiency of the workforce. In addition, SSCs’ efficiency and commitment can be measured by the number of hours spent on continuous improvements like employee training and development.
5. Benchmarking & Continuous Improvements: KPIs can be used for benchmarking against industry peers to gauge the areas of improvement. It can also measure the SSC innovation index in terms of offering new services, processes, and technologies as well as the number of process improvement initiatives undertaken within the SSC.
6. Compliance and Risk Management: KPI can help assess the percentage of processes that comply and do not comply with relevant regulations, policies, and market standards mitigating the risks of data breaches and operational failures.
7. Financial Management: To measure the effectiveness of SSC in managing budget or revenue generation, KPIs are the best tool to compare actual expenses to the planned budget and track the revenue generated by the service provided.
8. Customer service: How effectively the customer queries or issues are resolved within what time frame and what will be the Net Promoter Score (NPS) all can be measured through KPIs indicating the Shared Service Center’s (SSCs) performance and efficiency.

Based on the specific goals, services, and industry of the SSC these KPIs can be tailored accordingly. Regular monitoring and analysis of these KPIs help ensure that the SSC is meeting its objectives and continuously improving its operations.

How Aidosol can help

Aidosol can help in building powerful Key Performance Indicators (KPIs) based on the organization’s goals, cost efficiency, customer satisfaction, process efficiency, and employee productivity. By following these steps, Aidosol can develop powerful and effective KPIs that will help your shared services function deliver maximum value to the organization.