Effectiveness Of Business Shared Services Model In Cost Reduction In East African Breweries Limited

Abstract

The business shared services model (BSSM) seeks to deliver corporate support, combine and consolidate services from headquarters and business units into a distinct entity based on market-like principles. The purpose is to align processes, position the firm strategically and reduce cost. However, some of the firms using the BSSM do not experience a significant reduction in cost after the implementation of BSSM. The general objective of the study was to establish the influence of the business shared services model on cost reduction in EABL. The study’s specific objectives were to determine the influence of human resource shared services, finance shared services, logistic shared services, and customer service shared services on cost reduction in EABL. This study used a descriptive research design. The study’s target population was all the 238 employees in management positions of EABL in the company’s headquarters in Ruaraka, Nairobi Kenya. The study used a stratified sampling technique to select a sample of 149. The study utilized a structured questionnaire to collect data from the management-level employees targeted in the study. Data analysis was done through descriptive statistics (frequencies and percentages) and inferential statistics (multiple linear regression). SPSS was applied in the analysis and the results were presented in tables and figures. The study findings determined that human resource shared services had a significant positive influence on cost reduction in EABL (β = 0.470, p < 0.05). The study findings also determined that finance shared services had a significant positive influence on cost reduction in EABL (β = 0.209, p = 0.022). Moreover, logistics shared services had a significant positive influence on cost reduction in EABL (β = 0.226, p = 0.023). However, customer service shared services had no significant influence on cost reduction in EABL (β = 0.182, p = 0.108). The study makes the following recommendations. First, the study recommends to EABL to expand the sharing of its human resources model to include the services that are shared to a small extent since this could help the organization to be efficient and reduce waste. Besides, the study recommends to EABL to standardize finance processes across the whole organization, ensuring that not only is the organization running at peak efficiency but that its clients are getting the same high quality experience regardless of whatever department they interact with. Finally, the study recommends to EABL adopt the BSSM to a greater extent relating to sharing of the critical logistics functions. This would foster a distinct culture of collaboration in a shared services centre, where workers can combine their expertise to successfully finish these logistics services efficiently.