BING Financial Shared Service Center 3.0 | BlackLine Magazine

Financial Shared Service Center 3.0

We live in a diverse financial world. While there is wide variation in corporations’ financial structure, what is universal is the ceaseless pressure put on all organizations to push their margins. This pressure intensifies an organization’s focus on operational agility and cost competitiveness.

To better manage these pressures, many organizations have transferred activities to Shared Service Centers (SSCs) and those centers have become integral to corporations’ success. However, many SSCs are still immature (under two years old) and even more mature centers face common issues that restrict their performance.

If your Shared Service Center, regardless of its stage, isn’t driving performance improvement, then it is at risk of stagnating.

Is your Shared Services Center stagnating?

Although the value of SSCs has been recognized for many years, most organizations are not fully exploiting the concept and are therefore not maximizing the value.

According to the Shared Services & Outsourcing Network’s Global Report 2017, there are three main drivers of value in SSCs: improved customer service, improved economies of scale, and improved productivity. Within this understanding of “value”, the SSC concept still presents significant opportunities for organizations to improve.

Even for mature centers that have been in place for five years or more, there are opportunities to maximize their return on investment. It is essential to avoid stagnation because it can undermine a center and limit support for further investment, as a corporation may not recognize the value an underperforming SSC can deliver.

BlackLine Best Practice Recommendation:

Whether your organization is implementing a Shared Service Center for the first time or has an underperforming SSC, develop a strategy that focuses on standardization, scalability, and continuous improvement to maximize your ROIs.

  1. Standardization strengthens processes by delegating responsibilities and creating clear workflows, thereby improving an organization’s ability to integrate new operations or remove activities which are no longer required.
  2. Scalability is possible for any corporation through centralization and performance management. Centralization optimizes performance by maximizing resources and delivering KPIs to support management. Performance management attained through standardization provides clarity for who is doing what, where, how, and when. Centralization and performance management enable faster, more effective decisions to be made and permit safe scalability for your organization.
  3. Continuous improvement is essential for a Shared Service Center to deliver a competitive advantage to a company’s Finance department. In early stages, it focuses on standardization. The next phase is scalability. Finally, an SSC will be able to offer new knowledge-based services such as decision support through real-time interfaces and analytical reporting.

The Future of Shared Service Centers

As Shared Service Centers focus on continually improving their strategies, technology plays an increasingly important role. When asked what role automation will play in SSCs, the SSON’s Global Report 2017 shows that the majority of companies say that process automation will be a core capability. These companies report that their focus will be on enabling automation to incorporate the majority of processing, with FTEs focused on value add activities.

When incorporating automation, the biggest opportunity to improve SSC performance lies in being able to oversee end-to-end processes. By having responsibility for the entire end-to-end process, SSCs are able to identify and remedy inefficiencies, including better monitoring of input and output for tasks, handover of tasks, and offer greater transparencies across the process.

While many SSCs still focus on transactional services, SSON’s Global Report 2017 reveals that 8 out of 10 are moving toward a focus on knowledge services. While more mature centers already tend to focus on knowledge services, more are being set up to immediately focus on this rather than start with an emphasis on transactional services and gradually transition toward knowledge-based services. As companies move toward knowledge-based services, the opportunities for automation and RPA will continue to increase.