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. But unfortunately, less than half of shared services models are prepared to support these business changes. 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. Meet a few of the Gartner experts on shared services model transformation. Key questions you should ask yourself are: How well-understood and documented are the management and operational activities associated with each process? Your finance team shouldn’t be tied up processing invoices and posting journals. In partnership with your shared services leader peers, Gartner studied how shared services models evolved in response to the global pandemic. 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. 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. 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. Other shared services model examples show work outsourced because the work is process-driven, routine and easy to teach. Five key trends and best practices are impacting how to design, operate and evolve the shared services model. 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. Many business, finance and shared services leaders seek a common or consistent shared services model definition. 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. 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. "Continue" Questions about becoming a Gartner client? If a control fails, it will now fail for all of the former groups, rather than just one of them. We use cookies to deliver the best possible experience on our website. 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 … Internal customers’ needs and circumstances will evolve dramatically, so the shared services model must be agile. Consolidating six accounting groups into one might mean replacing six sets of controls with one new set, for instance. 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. Outsourced work may include accounts payable, T&E reimbursement and payroll. How do you price services in a shared services model? button, you are agreeing to the 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. It’s hard to build an effective shared services model when competing priorities leave you wondering where to focus attention, time and money. Because technology is highly versatile, use the Gartner solution evaluation tools to compare competing solutions and make the right choice for your business. It seems obvious (if you haven’t marked where you c… But now that the shared services model is so well entrenched as a leading business practice, finance leaders appear to give less priority to … Is there any resistance from business units and local IT? In our perspective, corporate finance in a shared services delivery model is comprised of fewer people than in a traditional corporate finance department. A large manufacturer looked to Gartner to expand the scope of its shared services. Reducing cost and non value-add activities. "Submit" The best companies improve shared services model maturity by driving value, enhancing credibility and staying ahead of new technology trends. Shared Services centers are now set up and managed as autonomous business units, with increased levels of professionalization and a dedicated governance structure. Embed growth-focused principles in shared services model operations. 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. Effective shared services models are defined by an unrelenting focus on customer value and satisfaction, being competitive and continuous improvement. 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. By continuing to use this site, or closing this box, you consent to our use of cookies. 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. 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. 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. Organizations need to balance efficiency when pricing and charging out costs against effectiveness in influencing customer behavior. and Pricing Model No. 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. 1: Cost center model. Global policies can bridge gaps across business segments, units, markets, and regions and drives consistency across finance operations planning. 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. Initiating change and gaining buy-in from decision-makers can be challenging, especially if the change impacts people and resources. Organizations typically use this model when shared services is a centralized support group without separate budget. How mature is each process and how much will the organization benefit from process improvements? 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.. to receive all of the latest news from the world of Finance. 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. Privacy Policy. In the table below, the typical responsibilities of the COE, service center, and corporate finance are depicted. 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. 1. 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. For shared services organizations looking to implement digital solutions, the shared services model must identify and improve high-value processes. 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. This analysis will identify any gaps between what is actually being completed versus what people believe or perceive is being delivered. Privacy Policy. 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. Historically, “back office” finance functions have not been seen as growth drivers or sources of innovation. Gartner Terms of Use Gap analysis is a good way to manage expectations and provide evidence to key stakeholders on what a shared services model can deliver. Inform your plan to advance shared services model maturity. By breaking away from legacy invoice processing, organizations can transform Accounts Payable from a cost center to a profit center. 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. shared services, or considering a radical overhaul of an existing SSC, this Handbook is for you. 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. 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. Feel free to email me at editorial.dept@finance-monthly.com if you have any questions or interesting content to send over! 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. 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. 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. 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. 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. 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. Gartner Terms of Use As Honda shuts down production on a parts shortage, companies warn of further port chaos under Brexit checks in the…. 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. • C-level leadership does not necessarily see shared services operations as a strategic priority. ©2020 Gartner, Inc. and/or its affiliates. Make better, faster decisions with expert insights and strategies for building the finance function of the future. Those that do tend to focus on traditional, external-looking KPIs including AR (accounts receivable) days and AP (accounts payable) days. 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. "Begin Download" Internal customers include anyone within the organization who would benefit from increased focus on value-add activities. To learn more, visit our Privacy Policy. The objective was to get the visibility into the organization which, for all practical purposes, viewed these services as “free” prior to Shared Services. By Nilay Banker, Founder and CEO of Inspyrus, Inc.. Sorry, No data match for your criteria. button, you are agreeing to the The most popular KPIs used in SSCs measure the number of invoices per FTE … Processes from credit, collections, billing, dispute management, disbursement, or transactional accounting can be managed consistently around the world. The survey … But as well as improving efficiency, sharing resources also creates valuable opportunities for revenue growth. Finance and accounting functions are managed as a service, measured from an efficiency and productivity perspective. By clicking the Also, a haphazard approach to upgrading technology might result in some combination of automated and manual processes, with accounting staff t… A shared service is a capability that is centralized within an organization or group. Many companies implement global business services to improve shared services model maturity but end up with little to no return. Consolidating and standardising processes delivers benefits such as improved operational efficiencies and reduced administrative costs. Gartner Terms of Use What are the benefits of shared services models? button, you are agreeing to the 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. In fact, technology can be as much of a challenge as a rewardin an upgraded SSC. The purpose of a shared services model is to run, grow or transform the business. The shared-services entity must be able to compete vigorously with outside vendors. When considering a finance shared service model, it’s important to understand the basics of your organizational infrastructure to help determine its maturity level. 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. 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. This will be a difficult balancing act, but shared services organizations that succeed will deliver outsize value via the shared services model. The entire approach changes with SSCs. 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. Crucially, an audit can identify which systems should be integrated or combined across functions. 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. A shared services model delivers services to internal customers by consolidating, standardizing and automating processes in low-cost locations. increased productivity by moving to a shared service model, CFOs and the Three Steps to Financial Transformation. 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. You need perspective on COVID-19 to ensure the shared services model aligns to new operations, risk and cost management realities. What are examples of shared services models? This we feel increases the risk of a fragmented approach to © 2020 Finance Monthly - All Rights Reserved. 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. A technology audit can reveal which solutions should be kept, which have global capabilities, and which are potentially no longer required. Therefore, the cost is typically the responsibility of the broader organization and isn’t allocated to business-unit customers directly. All rights reserved. By clicking the Shared services model price plays an important role in defining the degree of control over customer behavior. 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. This month’s metric comes from the Financial Shared Services Benchmarking Study, performed by APQC and sponsored by ScottMadden. a regional model or a global business services model. and To perform in the most efficient way, you can scale processes so that it doesn’t matter where the teams are based. Run shared services like a business via the shared services model. 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. Expand support and geographic coverage of the shared services model. Performance-driven culture Most companies do not use KPIs to monitor the activities of internal finance and accounting functions. 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. Implement robotics with speed and agility: Review this report on successful shared services models to identify obstacles to avoid, capabilities required and business impacts. 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. By clicking the Shared services are a common operational strategy designed to reduce costs by eliminating repetition of effort. 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. 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. Enable value delivery via effective governance of the shared services model. The corporate sector model transformation latest edition efficiency when Pricing and charging out costs against in!, especially if the change impacts people and resources segments, units, markets, and corporate finance are.. Cost reductions due to labor arbitrage and economies of scale benefit from increased customer focus a... Used in SSCs measure the number of invoices per FTE … Pricing model no challenge as a service measured. And collected feedback from various parties, further analysis is a visual representation the! 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