When developing the business case for shared services, the anticipated reduction in headcount will always be a key point.  One of the primary selling points is that the move to shared services will help the company achieve greater effeciencies and lower cost.  That lower cost is achieved in part through headcount reduction.  Headcount, or full-time equivalent (FTE) reduction is achieved through both process optimization and economies of scale. 

Process optimization is key to creating an efficient shared services organization.  It means that there will be standards around the way things are done to minimize activities that don't add value, such as redundant controls.  It also means there will be a common technology platform that enables common processes.  By optimizing processes through standardization and eliminating or reducing non-value added activities, a reduction in FTEs can be achieved.

The second way FTE reduction is achieved is through economies of scale.  This includes: 1) consolidating numerous part-time resources from various locations to make one FTE and 2) achieving a greater Span of Control so that there are fewer management layers and cost associated with the function.  By consolidating resources from disparate functions and locations, you can eliminate those jobs that are less than 1 FTE.  These are typically the people in remote locations juggling a number of tasks.  Bringing these positions together creates a more efficient organization.

When starting out a business case, it's difficult to look into the future and estimate how much inefficiency can be wrung out of the processes in scope.  That's where benchmarking comes in.  By baselining your current operations and comparing them to high-performing organizations, you can get a feel for the potential cost savings available.  These estimates will become part of your business case.