The Future of Shared Services Centres: Connectivity Will Drive Efficiency
In this excerpt from Conor O’Kelly’s white paper, Creating the Connected Finance Shared Services Centre, we look at the role innovation will play in the future of shared services centres.
While the finance shared services business model has matured since it was first introduced in the 1980s, the maturity of individual centres varies significantly. Many emphasise recruiting and retaining skilled staff in addition to the need to provide further strategic value.
With the initial savings achieved through labour arbitrage being offset by increasing labour costs in Europe, Asia and Latin America, finance shared services centres (SSCs) are exploring new models to improve operating efficiency.
The move to global process delivery
Traditional finance shared services have been based on regional service delivery offerings, with transactional work remaining highly manual. For global firms, this means little standardisation in approaches, structure or process.
Connected reporting and compliance platforms provide SSCs with the ability to enhance process standardisation and simplification. Process-driven SSCs are characterised by consistency and standardisation of data, upstream finance systems and ERP, as well as downstream reporting and data processing.
Improved standardisation supports the building of specialised centres to achieve scale and volume across specific processes. By grouping processes across functions by talent, role and capability, the organisation can build global business services that achieve cost savings through scale.
Innovation supports the move from labour arbitrage to automation
Traditionally, operating efficiencies have been achieved by standardising non-core activities within the services centre and across the broader finance organisation. However, the savings achieved through process improvement have been offset by increased labour costs.
Current shared services models are evolving to a touchless virtual operation that minimises direct interactions and maximises automation. While direct employee input remains important to driving reliability gains, connected reporting and compliance generates incremental efficiency by reducing staff actions and disclosure management, review and signoff times on documents.
Evolving governance models from service level agreements (SLAs) to volumetric measurements
With the transition to global process ownership, the accountability of the SSC has become more detailed. As performance expectations evolve, governance models are also evolving in complexity and maturity to match. This allows for the alignment of service delivery and performance with delivery charges back to the organisation.
Greater data and process connectivity further support the drive for continuous governance, enabling transformation of traditional SLAs to more accurate volumetric measurements based on demand management.
Connected reporting allows for the enhanced tracking and measurement of ad hoc reports and requests outside the standard reports catalogue. In turn, this enhances the alignment of individual performance and rewards back to SLAs. Additionally, it improves the ongoing identification and elimination of reports that no longer have specific management, financial control or regulatory value.
Preparing for the future SSC
The shared services centre business model is at a key transformation point in its development. It can no longer simply serve as a vehicle to cut labour costs. Connected reporting and compliance creates an environment that counters many of the reasons why traditional shared service centres fail. You can standardise and simplify work processes, automate creation and manipulation of data, add value and context to data and reports and increase control and transparency.
Read the full white paper to learn how connected reporting and compliance can address the governance, innovation, process delivery and talent management challenges plaguing SSCs.