What are external shared services providers?

External shared services providers refer to departments or agencies that offer services to organizations outside of their own. This implies that these providers serve multiple clients, consolidating resources and services to improve efficiency and effectiveness. By doing this, they can leverage expertise and shared resources, resulting in cost savings for the organizations they serve.

This concept is prevalent in government and public sector environments where various agencies can provide specialized services—such as payroll, human resources, or IT support—to other entities rather than duplicating these functions across multiple departments. The key aspect of external shared services is the collaboration between different organizations, allowing for streamlined operations and shared expertise, which benefits all parties involved.

In contrast, the other options do not accurately represent the concept of external shared services. Agencies providing services within their department focus solely on internal functions, private companies that specialize in financial services do not fit the definition of shared services within a public context, and non-profits that provide community services do not necessarily operate in a manner that involves serving other organizations in a sharing capacity as defined in the realm of shared services.