Part 2 of our Shared Services blog series. Read Part 1 here.
You made the move to a Shared Service Centre (SSC) model because you were told the streets were paved with gold, and they were. You saved money. So what’s the problem?
The problem is that businesses don’t stop growing and evolving. After the initial cost savings from economies of scale that can be achieved within SSC operations, the finance and accounting function is still faced with ongoing challenges around trust, compliance, collaboration, and control.
If anything, the SSC increases corporate risk in those areas. Cost savings are all well and good, but there are other things for the finance professional to think about, too. Like going to jail for large-scale financial misrepresentation, for example.
The Burden of Responsibility
In a highly regulated environment with increasing demands on global compliance, the responsibility that lies within a modern finance function can no longer be delivered by legacy systems—whether those systems and processes are within the SSC or not.
Multiple data sources, old technology, manual processing, and basic human error are all contributing factors that affect the relationship between the SSC and the business.
Outsourcing the function to the SSC does not equate to outsourcing responsibility for the integrity of the closing figures.
So, risks associated with incorrect reporting need to be managed between the business and the SSC. Traditionally, that might entail more bodies, more spreadsheets, more late nights checking and rechecking, and rechecking, and rechecking…
But if the finance and accounting function is ever to become a more strategic partner to the business, focus needs to be placed on supporting growth and providing decision analytics—concentrating on the things that really matter to the success of business instead of the manual processes that slow it down.
For that to happen, the day-to-day Accounting, even at a global scale, needs to take care of itself.
This means strengthening the integrity of data imports and exports between the business and the SSC, for example. Automatically identifying and resolving errors in reporting and reconciliations. Enhancing ERP integrations to improve control and workflows around operational activities.
Every aspect of the relationship between the SSC and the business is open to improvement and upgrade.
The Strategic Imperative
This approach is a significant shift from the backward-thinking focus on historical accounting. Instead, the accounting function needs to provide a more forward-looking, strategic approach to SSC improvement. Rather than scaling up manual processes within the SSC to mitigate increased exposure to corporate risk, process automation can be applied to improve controls across all data touchpoints and ensure end-to-end integrity.
Technology is making it easier than ever to automate these processes, enabling financial data to be used more strategically and effectively. The opportunity (and in most cases, the responsibility) for the finance function is to ensure that the processes and technology are in place to enable continuous visibility and accuracy of financial data.
At a time when advanced tools to help automate controls and ensure accuracy are already available and proven, there is really no excuse.
The Spreadsheet Conundrum
The initial cost savings from the SSC are all well and good, but why are you still relying on questionable spreadsheets to inform complex, high-risk business decisions? The next generation of SSC engagements will require a more strategic approach to collaboration, integration, and automation to ensure trust in the numbers.
The good news, however, is that the potential opportunity for savings in the context of a strategic SSC environment is greater than ever. So don’t be complacent. When the initial cost savings dry up, put the spreadsheets away and move forward.
Remember, you’ve only just started the journey.
Read this Shared Services Playbook to discover strategies for building your organisation’s path to SSC modernization.