Shared Services Agreement What Is

Shared Services Agreement: What Is It and How Can It Benefit Your Business?

In the business world, companies are always looking for ways to optimize their operations and reduce costs. One way to achieve this is through shared services agreements. But what exactly is a shared services agreement, and how can it benefit your business? In this article, we’ll take a closer look.

What Is a Shared Services Agreement?

A shared services agreement is a contract between two or more companies in which they agree to share certain services or resources. These services may include back-office functions such as accounting, human resources, IT, and procurement. By sharing these services, companies can reduce costs and increase efficiency.

For example, let’s say two companies in the same industry both have separate accounting departments. By entering into a shared services agreement, they can combine their accounting functions into one department, eliminating redundancy and reducing costs. This allows each company to focus on its core business while still benefiting from the shared services.

Benefits of a Shared Services Agreement

1. Cost Savings

One of the primary benefits of a shared services agreement is cost savings. By sharing resources and services, companies can eliminate redundancy and reduce operating costs. This allows them to allocate more resources to their core business activities and invest in growth opportunities.

2. Increased Efficiency

Shared services agreements can also improve efficiency by eliminating duplication of efforts. By streamlining processes and reducing the number of departments, companies can work more efficiently and effectively. This can lead to faster decision-making, improved customer service, and better overall performance.

3. Access to Specialized Expertise

Through shared services agreements, companies can gain access to specialized expertise that they may not have in-house. For example, a small business may not have the resources to hire a full-time IT expert, but through a shared services agreement, they can access the expertise of a larger company’s IT department. This can be especially valuable for smaller businesses that want to grow but don’t have the resources to do so on their own.

4. Flexibility and Scalability

Shared services agreements can also provide companies with flexibility and scalability. As a business grows or changes, it may need additional resources or services. Through a shared services agreement, companies can easily scale up or down as needed without having to invest in new infrastructure or personnel.


In today’s competitive business environment, companies must constantly look for ways to optimize their operations and reduce costs. Shared services agreements can be an effective way to achieve these goals. By sharing resources and services, companies can reduce redundancy, improve efficiency, and gain access to specialized expertise. With these benefits, it’s no wonder why shared services agreements are becoming increasingly popular among businesses of all sizes.