Shared Services – the beginning not the end of the journey!
When I started in shared services consultancy many moons ago, I remember my project manager at the time describing shared services as “always the bridesmaid, never the bride” – the apparently low value, low skill element of finance. This confused me as I felt without paying suppliers and billing customers, there wasn’t much of a business! I remember vividly on one implementation, shared services was missed out of the full scale test for a new ERP implementation. I had to fight to get it integrated into the testing plan.
As I progressed in my career I began to understand – shared services is but one piece of the finance puzzle – albeit a critical one, and back in the day, was often perceived as a transaction processing factory that added little value to the business. I remember another client I worked on who had nice bright offices apart from the area that housed the transaction processing…this was stuck in a 1960s time warp, and the love and attention given to the rest of the office had bypassed this finance hub. This didn’t go unnoticed by the transaction processing staff who felt that it was a neat representation of how they were perceived by the rest of the business.
However, things have changed. The scope of finance shared services has evolved dramatically over the last few years, from beginnings in accounts payable to general ledger, reporting and now even business analytics. The boundaries are being challenged continuously as technology advances apace, and confidence grows in existing scope. Maybe the bridesmaid will have her day yet?
Our clients are now seeing how much value their shared services centre (SSC) can bring to the organisation, above and beyond the traditional transaction processing element. The expectations from shared services now are innovation, new technologies and cost effectiveness. How can shared service organisations provide innovation benefits to their customers, whilst at the same time avoiding serious hikes in cost to serve?
To answer this question, we need to examine the relationship between Digital Transformation and Shared Services.
New technologies will continue to help move SSC services “up the value chain“
As more value added services such as data analysis, market research and customer relationship management will increasingly be expected by internal customers, SSCs need to explore new technologies that enable them to become more valuable to their organisations, including analytical software and self-serve tools that support the agendas of both the internal and external customer. Some SSCs have implemented online portals where external vendors can enter their invoice directly into the (jointly visible)system, thus allowing more focus on strategic activities such as spotting spending patterns that highlight possible fraud, or performing scenario analyses for improving the efficiency of vendor transactions. In my view, finance has always been digital, hence the ability to outsource and offshore – and the developments in technology continue to develop at an ever increasing pace.
Shared Services can make big data more structured
It is estimated that 15 petabytes of new information are generated every day. 80% of the information growth is unstructured data. Only structured data that is captured in a consistent way can bring comparability across business units, suppliers and customers. By consolidating multiple data capture solutions into a single enterprise standard, we can provide a consistent way to capture and maintain data and process transactions. Centralised data management can not only reduce the costs of managing infrastructure, but also improve accuracy and efficiency. Many shared services already include Master Data Management (MDM) in their scope of services, which provides a centralised data warehouse for Business Intelligence teams and end-users to extract data and generate reports. The Management Team can then view their business from all angles, and thus can respond quickly to change. The drive for better analytics may lead to the scope of shared services increasing to ensure effective governance and consistency from which to derive the data required. You can find more detail in the Capgemini article on the relationship between big data, Business Intelligence and Business Insights here.
Cloud computing will avoid capital being tied up with technology investment
Cloud computing allows an organisation to avoid upfront infrastructure costs and enables IT to adjust resources to meet fluctuating and unpredictable business demand. This means the business case for shared services just got even stronger.
With new technologies including point solutions allowing for the ongoing optimisation of the major finance processes, the opportunities to use “Big Data” once governed and cleansed centrally, and the reduced cost of IT offered by cloud, it feels like the days of shared services living in the shadows are over. It might just be the right time to buy a hat – the church is booked!