I'm sometimes asked by clients if it's acceptable to allow Business Units the choice of opting out of Shared Services.  My answer is "No" - with a caveat.

Part of the value proposition of Shared Services is the increased delivery effectiveness of standard processes.  It's difficult to get standard processes when some Business Units are going their own way.  Perhaps more importantly, a Shared Service Center requires scale to push down the per transaction cost.  If only some business units are participating then the potential efficiencies of the Center won't be realized.

But Steve, why should Business Units put up with sub-par performance for a greater cost then they could get in the open market?  The answer is that they shouldn't.  A Shared Service Organization that has been operating for at least three years should be very competitive on cost and delivery effectiveness.  My recommendation is that all business units should be compelled to be serviced by the Shared Service Organization for a set period of time, say three years.  This gives the Center time to integrate the processes and achieve the cost savings outlined in the business case.  If after that period of time the Center is still performing inadequately in some of its processes, a review should be undertaken to determine if the processes are better handled back in the Business Units, or if the process should be outsourced completely.

A newly formed Shared Service Organization legitimately requires time to get up and running, and it needs the full cooperation of the Business Units to achieve its goals.   At times this cooperation will need to be enforced from the top of the organization.  Without the full participation of the Business Units, the Shared Service Organization won't live up to its potential.