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Shared Service Centers: Risks & Rewards in the Time of Coronavirus

As the pandemic continues to disrupt all aspects of life, companies are re-evaluating how they get work done. For many large enterprises, reassessing their use of, and future investment plans for shared service centers is a key part of this strategic planning. The business logic behind these “captive” centers – standardization, economies of scale, lower cost labor – is still compelling. But the associated risks – geopolitical and business continuity concerns and the risk of diminished innovation – are increasingly pressing issues. Consequently, just as many organizations want to sell their captives as remain committed to using them.

Captives have historically been thought to offer many of the benefits of outsourcing while mitigating some of the risks of working with external service providers. In the time of coronavirus, the nature of this trade-off needs to be recalculated. Globalization, though currently out of favor, will continue to be a motivating force for large enterprises everywhere. But the tactics used to operate globally are set to profoundly change. This research, conducted by Cognizant and ESI ThoughtLab, presents views from C-suite leaders representing 1,500 organizations worldwide regarding the next moves they intend to make.

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