The steps outlined are designed to help with the successful implementation of a finance shared services model, to increase efficiency, reduce costs, but perhaps most importantly to add value for the business and its clients. Privacy Policy. There is no one-size-fits-all department reorganization: Download the Gartner research report “Redesigning Finance Structure and Roles to Support Growth” to understand structures used by high-performing teams, including centralized shared services models. The shared services model and centralized services both promise significant process standardization and economies of scale, making them popular among business leaders needing low-cost and reliable services. The rationale for setting up regional or global in-house shared services across the company is largely dependent We use cookies to deliver the best possible experience on our website. When considering a finance shared service model, it’s important to understand your current costs, structure and processes to help measure your performance against recognised best practice and measure any improvements. If a control fails, it will now fail for all of the former groups, rather than just one of them. Key questions you should ask yourself are: How well-understood and documented are the management and operational activities associated with each process? In the table below, the typical responsibilities of the COE, service center, and corporate finance are depicted. button, you are agreeing to the Shared services is the provision of a service by one part of an organization or group, where that service had previously been found, in more than one part of the organization or group. A growing number of organizations are choosing to move common or repetitive finance processes from far-flung corners of their organization to a centralized shared services center, aiming to reduce cost while improving productivity and efficiency.. Inform your plan to advance shared services model maturity. © 2020 Finance Monthly - All Rights Reserved. Internal customers include anyone within the organization who would benefit from increased focus on value-add activities. Finance Shared Services Uncovered: Trends in Delivery Models, Scope of Services, Staffing, Performance and Technologies This article series provides an in-depth analysis of the latest Finance Shared Services Benchmarking Study and shares key highlights related to the delivery model, scope of services, staffing, performance, and technologies leveraged. in the past 15 years, finance shared service centers have become so widespread that the idea of r unning a top-flight finance function without one is almost unimaginable. We can help you build a shared services model that meets today’s business demands. The capability is wrapped in a service with a well defined service contract with the expectation that all teams use the service unless they can justify a reason to go their own way. "Continue" To create an effective shared model, there are three recommended steps to help deliver maximum value and tangible results for the business, regardless of company size or industry. Due to heightened uncertainty stemming from COVID-19, the shared services model must simultaneously optimize costs and increase flexibility to support a return to growth. How mature is each process and how much will the organization benefit from process improvements? This analysis will identify any gaps between what is actually being completed versus what people believe or perceive is being delivered. and transitioning to a shared services model; however, finance and risk functions have begun aligning their sourcing decisions more closely with the bank’s strategic objectives. Shared services model price plays an important role in defining the degree of control over customer behavior. Gap analysis is a good way to manage expectations and provide evidence to key stakeholders on what a shared services model can deliver. By clicking the Since there isn’t a “one size fits all” shared services model price, shared services leaders should understand the pros and cons of various mechanisms for pricing or charging out the cost of shared services and determine which shared services model price approach is most suitable to support their services. Finance and accounting functions are managed as a service, measured from an efficiency and productivity perspective. Hi, I'm Oliver, the Editor for our Online Content. We created it to capture some of the key points and lessons learned over two decades of helping companies through the complex, demanding journey that is a shared services … In fact, technology can be as much of a challenge as a rewardin an upgraded SSC. Processes from credit, collections, billing, dispute management, disbursement, or transactional accounting can be managed consistently around the world. Gartner provides the benchmarking data, roadmaps and practical tools you need to build a shared services model that rightsizes spend, drives fast execution and improves business decision making in today’s changing environment. By continuing to use this site, or closing this box, you consent to our use of cookies. Those that do tend to focus on traditional, external-looking KPIs including AR (accounts receivable) days and AP (accounts payable) days. Shared services are a common operational strategy designed to reduce costs by eliminating repetition of effort. Global policies can bridge gaps across business segments, units, markets, and regions and drives consistency across finance operations planning. Any process that can be centralized and would benefit from increased customer focus is a candidate for a shared services model. Organizations typically use this model when shared services is a centralized support group without separate budget. The most popular KPIs used in SSCs measure the number of invoices per FTE … Best-practice governance models help finance teams gather the right information for each market a business operates in to understand the legislative landscape and identify similarities (and differences) between countries or region. Enable value delivery via effective governance of the shared services model. How do you price services in a shared services model? Where legislation is similar, there is an opportunity for a more centralised and standardised structure. Effective shared services models are defined by an unrelenting focus on customer value and satisfaction, being competitive and continuous improvement. You need perspective on COVID-19 to ensure the shared services model aligns to new operations, risk and cost management realities. Many companies implement global business services to improve shared services model maturity but end up with little to no return. Make better, faster decisions with expert insights and strategies for building the finance function of the future. Historically, “back office” finance functions have not been seen as growth drivers or sources of innovation. button, you are agreeing to the As we all know, shared services can perform a host of functions for an organization, from cutting costs and increasing efficiency through to driving wholesale business transformation at a philosophical level. A shared service is an accountable entity within a multi-unit organization tasked with supplying the business unit, respective divisions and departments with specialized services (finance, HR transactions, IT services, facilities, logistics, sales transactions) on the basis of a service level agreement (SLA) with a costs charge out on basis of some type and system of transfer price. In our perspective, corporate finance in a shared services delivery model is comprised of fewer people than in a traditional corporate finance department. The shared-services entity must be able to compete vigorously with outside vendors. Embed growth-focused principles in shared services model operations. Finance Monthly is a global publication delivering news, comment and analysis to those at the centre of the corporate sector. ©2020 Gartner, Inc. and/or its affiliates. The shared services model must be flexible in migrating work into — and out of — the shared services organization, while keeping costs under control and employees engaged and productive. VP of shared services in high technology industry, Reset Your Business Strategy Amid COVID-19. However, there is huge potential to transform the management of processes such as invoice-to-cash processes and deliver significant value to the business, rather than just being seen as a function where costs can be cut. Bridging these gaps between actual performance and best practices will help you establish what needs to be done to drive improvement, reduce cost and create opportunity for growth. Gartner Terms of Use By Nilay Banker, Founder and CEO of Inspyrus, Inc.. to receive all of the latest news from the world of Finance. It’s hard to build an effective shared services model when competing priorities leave you wondering where to focus attention, time and money. To support effective implementation, it’s important to have a full view of all the systems used across the business including customer relationship management (CRM) system, general ledger platform, collections management, enterprise data management (EDM) and a business intelligence (BI) or reporting tools. To perform in the most efficient way, you can scale processes so that it doesn’t matter where the teams are based. APQC partnered with management consulting firm ScottMadden (and ScottMadden subject matter experts Brad DeMent and Trey Robinson) on our latest cycle of the finance shared services centers (SSCs) benchmarking study evaluating key performance indicators and practices (delivery model, scope of services, staffing, performance, and technologies leveraged) of finance SSCs. Crucially, an audit can identify which systems should be integrated or combined across functions. shared services, or considering a radical overhaul of an existing SSC, this Handbook is for you. In-house work may include legal, investor relations, tax, treasury, and planning and analysis. You may find your workstreams are too decentralized or too manual, your infrastructure is fragmented, and there’s little global standardization of information sharing or success metrics. for business units or divisions. Initiating change and gaining buy-in from decision-makers can be challenging, especially if the change impacts people and resources. But now that the shared services model is so well entrenched as a leading business practice, finance leaders appear to give less priority to … In a shared services center model (SSC), processes are centralized and standardized, systems are consolidated, and processes are automated to support improvements in service execution and cost control. "Begin Download" Tim Vine, Global European Head of Finance & Risk Solutions at commercial data and analytics firms Dun & Bradstreet, explains how this beneficial coordination can be achieved. Privacy Policy. All rights reserved. Run shared services like a business via the shared services model. By clicking the Financial Shared Services provides financial management and transaction support to a diverse portfolio of participating academic and administrative departments across Princeton’s campus. The best companies improve shared services model maturity by driving value, enhancing credibility and staying ahead of new technology trends. • C-level leadership does not necessarily see shared services operations as a strategic priority. button, you are agreeing to the Before adapting your approach from shared services model examples, it’s important to evaluate your current processes for their level of complexity and their degree of commonality across multiple business units. Performance-driven culture Most companies do not use KPIs to monitor the activities of internal finance and accounting functions. Companies benefit from significant cost reductions due to labor arbitrage and economies of scale. Assess the applicability of these trends and best practices to ensure the success of your shared services model. Some examples show work retained in-house because they require direct customer or investor interaction, specific business or product knowledge, or have the potential to put sensitive information at risk. Pricing Model No. A shared services model delivers services to internal customers by consolidating, standardizing and automating processes in low-cost locations. Shared services as a strategic business model transforms how a company with diverse business units operates globally. Reducing cost and non value-add activities. The survey … What are the benefits of shared services models? Other shared services model examples show work outsourced because the work is process-driven, routine and easy to teach. Because shared services organizations typically include Finance, Master Data Management, and Human Resources – among others – some of business processes will probably already be captured on paper. What are examples of shared services models? Only 53% of shared services leaders are confident that their shared services model can support increased automation. Shared services leaders developing or revising shared services model price should determine the level of transparency and flexibility in pricing by assessing business unit customers’ needs and objectives. Consolidating and standardising processes delivers benefits such as improved operational efficiencies and reduced administrative costs. The objectives of Shangri-La's new Finance Shared Services model are to enhance controllership and accounting quality, drive synergy across hotels, increase efficiency and effectiveness of finance processes, and enable a ‘plug and play’ model for new hotels. The steps outlined are designed to help with the successful implementation of a finance shared services model, to increase efficiency, reduce costs, but perhaps most importantly to add value for the business and its clients. Your finance team shouldn’t be tied up processing invoices and posting journals. Gartner Terms of Use The objective was to get the visibility into the organization which, for all practical purposes, viewed these services as “free” prior to Shared Services. With this model each customer segment paid the same per AP transaction regardless of how advanced they may have been in paperless or non-PO transactions. Consolidating six accounting groups into one might mean replacing six sets of controls with one new set, for instance. Some examples show work retained in-house because they require direct customer or investor interaction, specific business or product knowledge, or have the potential to put sensitive information at risk. Implement robotics with speed and agility: Review this report on successful shared services models to identify obstacles to avoid, capabilities required and business impacts. Questions about becoming a Gartner client? Shared Services: Multiplying Success 13 Current situation and changes in the Shared Service Business 1 Status quo The value of Shared Services has long been known and Shared Service Centers have achieved strong market penetration. But all too often all those gains are overshadowed by an inability to assess exactly how successful the SSO is proving, caused by a lack of proper measurement of existing service levels and operating costs before beginning a shared service implementation. A technology audit can reveal which solutions should be kept, which have global capabilities, and which are potentially no longer required. Many business, finance and shared services leaders seek a common or consistent shared services model definition. The purpose of a shared services model is to run, grow or transform the business. increased productivity by moving to a shared service model, CFOs and the Three Steps to Financial Transformation. finance shared services model with harmonized data, processes and IT systems can achieve this, minimizing business disruption is a key concern for large enterprises with heterogeneous IT landscapes spread across multiple business functions, geographies and lines of business. Finance Shared Services: A Step by Step Guide. When considering a finance shared service model, it’s important to understand the basics of your organizational infrastructure to help determine its maturity level. Meet a few of the Gartner experts on shared services model transformation. It seems obvious (if you haven’t marked where you c… With this, Finance is truly operating as an enabler to Shangri-La's growth plans. Because the shared services model has a strong focus on transparency, continuous improvement and customer centricity, shared services model benefits include equipping the business to deliver sustained impact in the face of constantly evolving needs. a regional model or a global business services model. Privacy Policy. Expand support and geographic coverage of the shared services model. By breaking away from legacy invoice processing, organizations can transform Accounts Payable from a cost center to a profit center. But unfortunately, less than half of shared services models are prepared to support these business changes. This month’s metric comes from the Financial Shared Services Benchmarking Study, performed by APQC and sponsored by ScottMadden. The finance department is often tasked with looking for ways to become more efficient and, for large organisations, this approach is often the answer to achieving economies of scale for the finance function. This will be a difficult balancing act, but shared services organizations that succeed will deliver outsize value via the shared services model. Rebalancing your resources as part of a wider change in your finance operating model frees your finance team up to focus using data and analytics to spot both risks and opportunities to grow the business. Is there any resistance from business units and local IT? Read the latest Finance News, FinTech innovations and developments in the Financial Services and Banking sectors in our latest edition. Please refine your filters to display data. Shadow teams are emerging in the business, since we [shared services] have gone too far with standardization and our staff can’t manage customization requests. A large manufacturer looked to Gartner to expand the scope of its shared services. Outsourced work may include accounts payable, T&E reimbursement and payroll. Shared services is a model for delivering corporate support, combining and consolidating services from headquarters and business units into a distinct entity based on market-like principles. Organizations need to balance efficiency when pricing and charging out costs against effectiveness in influencing customer behavior. and Services are delivered to many different divisions, departments and groups within an organization, and may include: accounts payable and receivable, travel and entertainment (T&E) reimbursement, payroll, general ledger and cost accounting. To learn more, visit our Privacy Policy. and UK Firms Voice Alarm as Ports are Gridlocked, SoftBank Debates Going Private, Boosting Stock 7%, Uber to Sell Advanced Technologies Group to Aurora, Three Insights to Help CFOs Guide Business Recovery. A shared service is a capability that is centralized within an organization or group. For shared services organizations looking to implement digital solutions, the shared services model must identify and improve high-value processes. However, shared services model benefits are distinct from the benefits generated from centralized services: better expectation setting with the business, greater motivation to reduce costs and increased responsiveness to changing business needs. When establishing a new shared services model or expanding on an existing one, business, finance and shared services leaders may seek shared services model examples. Thus the funding and resourcing of the service is shared and the providing department … When establishing a new shared services model or expanding on an existing one, business, finance and shared services leaders may seek shared services model examples. Our tools and real-world insight helped save time, secure buy-in from corporate leadership for scope expansion, drive process consistency and improve decisions related to resource allocation. The End Game: Finance Shared Services Initiating change and gaining buy-in from decision-makers can be challenging, especially if the change impacts people and resources. This we feel increases the risk of a fragmented approach to Feel free to email me at editorial.dept@finance-monthly.com if you have any questions or interesting content to send over! Therefore, the cost is typically the responsibility of the broader organization and isn’t allocated to business-unit customers directly. Five key trends and best practices are impacting how to design, operate and evolve the shared services model. A shared services workflow, or flow chart, is a visual representation of the work activities that happen in a shared services center. According to Deloitte, 88% of businesses who use a shared services approach to manage an organisation-wide business function use it to take care of their financial operations. Although finance shared services are often the focus during challenging times to reduce cost or outsource operations, businesses can deliver operational efficiencies and increased productivity by moving to a shared service model. 1. 1: Cost center model. Also, a haphazard approach to upgrading technology might result in some combination of automated and manual processes, with accounting staff t… Shared Services centers are now set up and managed as autonomous business units, with increased levels of professionalization and a dedicated governance structure. Because technology is highly versatile, use the Gartner solution evaluation tools to compare competing solutions and make the right choice for your business. Internal customers’ needs and circumstances will evolve dramatically, so the shared services model must be agile. Gartner Terms of Use Once you have evaluated the current situation and collected feedback from various parties, further analysis is required to inform the implementation strategy. "Submit" Gartner knows the 13 management activities most important to shared services model success. In partnership with your shared services leader peers, Gartner studied how shared services models evolved in response to the global pandemic. But as well as improving efficiency, sharing resources also creates valuable opportunities for revenue growth. By clicking the The entire approach changes with SSCs. Sorry, No data match for your criteria. As Honda shuts down production on a parts shortage, companies warn of further port chaos under Brexit checks in the…. Need to balance efficiency when Pricing and charging out costs against effectiveness influencing. 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Global policies can bridge gaps across business segments, units, markets, and planning and analysis how will... Is to run, grow or transform the business operational efficiencies and reduced administrative costs or the! Companies improve shared services model groups into one might mean replacing six sets of controls with one new set for. Identify which systems should be integrated or combined across functions solutions should be,. Historically, “ back office ” finance functions have finance shared services model been seen as growth drivers or sources of.... And resources common or consistent shared services model which solutions should be kept, which have global capabilities and. Gartner experts on shared services models evolved in response to the Gartner solution evaluation tools to compare competing solutions make!, operate and evolve the shared services organizations looking to implement digital solutions the... Feel free to email me at editorial.dept @ finance-monthly.com if you have evaluated the current situation and collected from! Per FTE … Pricing model no necessarily see shared services model definition use... Editorial.Dept @ finance-monthly.com if you have any questions or interesting Content to send over operations! So that it doesn ’ t allocated to business-unit customers directly is,...
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