The role of shared services in digital platforms

Have we set up the right shared services and internal platforms to maximize coordination and cross-leverage?

This article is part of the Digital Platforms hub

Platforms drive standardization and coordination at ecosystem-scale to organize fragmented markets and siloed supply chains. To do this effectively, platform organizations must drive standardization and coordination internally by leveraging shared services, set up as internal platforms. Shared services involve the consolidation of business operations and the cross-leverage of business assets, used across multiple organizational units.

Shared services allow standardized practices and processes to be reused across the organization, driving greater interoperability and coordination internally. This also subsequently sets the base for standardizing interfaces and interactions with external ecosystem partners and driving standards adoption across the ecosystem. Shared services drive cost advantages by reducing redundancy and increasing cross-leverage and reuse. Removing redundancy and duplication also reduces inconsistency and conflict of processes, programs and systems. Shared services also enable polling of expertise for pan-organization usage.

Shared services are critical to the scalability of a platform organization as standardized interfaces to access common services enable new innovation to be developed and deployed rapidly on top. They also enable individual innovation teams to contribute assets developed by them back to the shared services layer whenever they see the potential for cross-leveraging the assets across the organization.