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Shared Services Agreement Means: What You Need to Know

In today`s business landscape, companies constantly seek new ways to improve their bottom line and become more efficient. One popular strategy many organizations are turning to is a shared services agreement (SSA). This type of agreement involves groups or departments within a company pooling their resources and functions to reduce costs and streamline operations.

If you are considering a shared services agreement, there are a few things you should know. Here is an overview of what the term means and how it can benefit your business.

What is a Shared Services Agreement?

A shared services agreement is an arrangement in which organizations within the same company share resources and functions to reduce costs, increase efficiency, and improve service delivery. Under a SSA, one department or group provides services to other departments or groups within the company. For example, a company`s finance department may provide accounting and payroll services to other departments. This eliminates the need for each department to have its own accounting staff and systems.

Shared services agreements can take many forms, depending on the needs of the company. Some agreements are structured as contracts between departments, while others may be in the form of a centralized service center that serves all departments. The goal of the agreement is to reduce duplication of effort and resources, improve service delivery, and lower costs.

What are the Benefits of a Shared Services Agreement?

There are several benefits to implementing a shared services agreement in your organization, including:

1. Cost Reduction

One of the primary advantages of a SSA is cost reduction. By pooling resources and functions, companies can eliminate redundancy and reduce costs associated with maintaining separate systems and staff for each department.

2. Improved Service Delivery

Shared services agreements allow departments to specialize in providing specific services, which can lead to improved service delivery and greater expertise. By consolidating functions, companies can also standardize processes and procedures, resulting in more efficient operations.

3. Greater Flexibility

SSAs enable companies to be more flexible in responding to changing business needs. They allow for a more nimble organization that can shift resources and functions as needed to meet new demands.

4. Increased Efficiency

Shared services agreements can lead to greater efficiency, as resources are allocated more effectively. This can result in faster, more accurate delivery of services and products, which can improve the overall performance of the company.


Shared services agreements can provide many benefits for organizations looking to streamline operations and reduce costs. By pooling resources and functions, companies can become more efficient, flexible, and responsive to changing business needs. If you are considering a SSA for your organization, be sure to carefully evaluate your needs and goals, and work with experienced professionals to develop an effective agreement.