A shared services agreement is a resource sharing contract enacted between two business entities who have agreed to come together and share a common resource in order to benefit from the excess capacity of the shared resource and save on the very critical resource i.e. funds of both the entities. By entering into such an arrangement both the entities agree to not only utilize the benefits of the resource commonly but also share the burden of maintenance of the utility.
A shared services agreement is a document which drafts the all points with regards to utilization of the resource in question such as the timing of use to avoid a situation of conflict, the sharing proportion of maintenance cost of the utility and other issues such as security etc. In large organizations with various verticals and businesses, entering into such multi departmental sharing agreements can prove to be a major breakthrough in eliminating duplication of efforts and a booster for cost reduction exercise, a very critical mission in today’s competitive business environment.
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