For a founder-led software company, the back office often grows by accident. The founder signs contracts at night, an office manager runs payroll, and a part-time bookkeeper closes the month. It works until the company outgrows it. This guide explains what shared services typically cover, how the model differs from outsourcing, the benefits for the entire organization, the role of technology and governance, and what to consider before adopting it.
Executive Overview: The Importance of Shared Services
The Strategic Significance of Shared Services
Shared services turn support functions into an internal service provider. Instead of every business unit building its own finance, HR and legal capability, a more centralized approach puts one unit in place to serve them all. The strategic payoff is focus. Leaders spend their time on customers, product and people, and the shared services organization handles the work that every company needs but no customer pays for directly.
Impact on Cost Savings and Operational Efficiency
Consolidating repetitive tasks in one place lets a shared team achieve economies of scale, use better tools and apply consistent processes. The result is usually cost savings, faster turnaround and fewer errors. For a group of smaller companies, it also means access to expertise that none of them could afford alone.
Defining Shared Services Coverage
Functions Typically Included
Shared services typically cover the support functions that are similar across business units and support business needs: finance and accounting, human resources and payroll, legal and contract administration, IT support and general back-office operations. Customer-facing work, product development and sales usually stay with each business, because they depend on knowing that specific market and customer base.
Shared Services Versus Outsourcing
Outsourcing moves a function to a third-party provider under contract. Shared services keep the function inside the organization, run by a dedicated internal team that serves internal customers. Shared services usually offer more control, closer alignment with the business and deeper knowledge of how each company works. Many organizations combine the two, keeping core support functions in a shared services center and outsourcing narrow specialist tasks.
Core Functions Centralized in Shared Services
Human Resources Functions
HR shared services typically handle payroll processing, benefits administration, onboarding, employee relations support, HR policies and compliance. Many also support talent management and workforce planning, helping each business hire well and develop its people while shared HR teams provide employees with more consistent guidance and support across the organization. Centralizing HR functions gives employees a consistent experience and gives HR teams better data.
Finance and Accounting
Finance is often the first function to move into a shared services model. Typical coverage includes accounts payable and accounts receivable, cash application, month-end close, reconciliation, financial reporting, budgeting support, tax and audit preparation. Standardized processes produce cleaner numbers, faster closes and better decision making for leadership.
Information Technology Support
IT shared services can include the service desk, network management, device and asset management, cybersecurity and access controls. A shared team can also introduce automation tools and AI integration that would be hard for a small company to build alone, helping streamline processes and improve efficiency.
Back-Office Operations
General back-office services, or office support services, cover the repetitive tasks that keep a company running, such as data management, document handling, process standardization and internal reporting. Consolidating data and processes in one place makes the work faster and easier to improve over time.
Why Shared Services Matter to the Entire Organization
Better Service Quality for Internal Customers
A dedicated shared team delivers support services to each business unit as an internal customer. With clear service levels and specialized staff, internal customers get faster answers, more accurate payroll and better reporting than a stretched generalist could provide.
Support for Core Business Activities
The biggest benefit is time, because centralized support frees internal teams to focus on core business activities. When the back office is handled, founders and leaders can return to serving customers, improving the product and developing their teams. In a mission-critical software company, that focus is often the difference between a product that keeps pace with customer needs and one that falls behind.
Contribution to Sustainable Growth and Strategic Initiatives
Shared services create a foundation that scales and can support the entire company as it grows. A company can add customers, people or locations without rebuilding its finance and HR functions each time. That foundation supports sustainable growth and frees capacity for strategic initiatives such as new products, new markets or modernization.
Benefits of a Shared Services Model
Cost Savings and Cost Advantages
Shared services deliver significant cost savings by consolidating duplicate roles, systems and vendors. Economies of scale lower operational costs across the group. Cost efficiency improves further as processes are standardized and automated.
Improved Operational Efficiency and Streamlined Processes
One way of doing things, documented and improved over time, helps teams gain efficiencies across different departments and is faster and more reliable than many informal ways. Standardized processes reduce errors, speed up closes and payroll runs, and make it easier to train new team members.
Access to Specialized Expertise and Innovative Solutions
A small company rarely has a tax specialist, an employment lawyer and a payroll expert on staff. A shared services team can cover various functions with specialized expertise. It can also introduce innovative solutions, such as new finance systems or HR platforms, and spread them across every business it supports.
Technology's Role in Enhancing Shared Services
Robotic Process Automation and Machine Learning
Robotic process automation handles rules-based tasks such as invoice matching, data entry and report generation. Machine learning and other artificial intelligence tools can flag anomalies, predict cash flow and answer routine employee questions. Together, they let shared services teams spend more time on complex tasks that need human judgment.
Centralized Data Analytics for Better Decision Making
Consolidating data from several businesses into one view gives leaders a clearer picture of performance. Centralized analytics help identify areas for improvement, compare results across business units and support better decision making at every level.
Governance and Performance Management
Service Level Agreements and Performance Metrics
Good shared services run on clear expectations. Service level agreements define what each function delivers and how fast, such as payroll accuracy, invoice processing time, month-end close dates or ticket response times. Performance metrics track delivery against those service levels, support overall service delivery, and regular reviews keep both sides aligned.
Continuous Improvement and Accountability
Shared services should get better every year, with improved service delivery as the goal of that ongoing improvement. Collect feedback from internal customers, review metrics, and fix the processes that cause the most friction. Clear ownership for each function keeps accountability high and makes continuous improvement part of the routine.
Challenges and Considerations
Common Hurdles in Implementing Shared Services
Moving to shared services takes planning. Processes that lived in people's heads need documenting. Systems need consolidating. Each business has its own habits, and some will need to change. A phased approach, starting with one function such as finance, keeps the transition manageable.
Managing Change and Aligning Strategic Priorities
In an evolving business, people worry when work moves to a central team because the organization is adapting to change. Explain the reason, involve the people affected and show early wins, such as a faster close or a simpler expense process. Keep decisions about customers, product and people close to each business, and let the shared team focus on the support work. Alignment on strategic priorities from the start prevents friction later.
How Shared Services Work at Solen
At Solen, shared services are central to how we support business operations across the companies in our portfolio. Finance, HR, legal and administration move to Solen's shared teams, so founders and leaders can focus on customers, product and people. Company leaders keep setting priorities for their business while the company creates centralized capabilities to support them. Our principle is simplification, not control.
Portfolio companies also gain the Solen Business System, a shared set of operating practices, and peer guilds that connect people doing similar work across companies. Brands, teams and billing systems stay in place unless a change clearly adds value.
Conclusion: The Strategic Value of Shared Services
Shared services take the repetitive, essential work of running a company and handle it with more expertise, consistency and efficiency. The result is lower cost, better service quality and, above all, more time for leaders to focus on what makes their business valuable.
Next Steps
If you are considering a shared services model, start by mapping where your leaders spend time on back-office work, pick one function to centralize first, and set clear service levels from day one.
If you lead a mission-critical software company and want to talk about how a permanent-capital partner can lift the back office off your desk, reach out to the Solen team. We are glad to talk, even if the timing is not right today.
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