Insights / Finance / Article

5 Characteristics of the Best Shared Services Centers

February 22, 2019

Contributor: Jordan Bryan

The most effective SSOs think globally, expand rationally and locate services wisely.

Shared services organizations (SSOs) deliver and demonstrate value to their internal customers in many ways. Managers improve the three main components of shared services — people, process and technology — but the most successful teams typically share five characteristics.

Think globally from the start

Most companies try the shared-services model in their home country first and then export the concept to other parts of the world. As a result, each region often functions as a separate unit, trying independently to improve productivity and reduce costs.

“ More than 80% of shared services organizations have implemented robotic process automation technology”

“Successful organizations take a long-term view of shared services from day one and establish policies and organizational structures for a global model,” says Cliff Struhar, VP, Advisory, Gartner. These firms are careful not to get carried away and open too many physical offices, usually opting for a major global center and several minor regional centers. The leader of the SSO is responsible for all global operations and for providing consistent service to business units in all regions.

Consistently expand the function’s scope and scale

Most shared-services projects first consolidate and standardize high-volume activities, such as accounts payable or cash application. Many SSOs stick with this role, and become pigeonholed as transaction-processing utilities.

Forward-thinking firms expand both the geographic scope and the breadth of their service offerings. For these companies, there are no opt-out options for business units. The SSO serves every country, location, business unit and employee of the company. Progressive companies expand the scope to include expert functions and don’t limit the criteria to whether the SSO yields the same kind of cost savings as those achieved by taking on high-volume transaction processing.

Learn more: Shared Services Strategy and Structure

Use “global process owners” (GPOs) to standardize processes

Many shared-services projects target cost and productivity improvements within a single process (such as accounts payable). The most advanced companies often go well beyond those limitations and appoint GPOs for end-to-end processes such as order-to-cash or purchase-to-pay. GPOs look to standardize these activities across all locations, and they:

  • Measure and improve process quality
  • Apply best practices
  • Manage external relationships
  • Monitor customer satisfaction
  • Identify technology needs

Learn more: Redesign Your Finance Function to Meet Business Demands

Consider automation in addition to labor arbitrage

In the past two decades, companies have moved transaction-processing activities to low-cost geographies to take advantage of labor arbitrage. These efforts aim to improve organizational capabilities, drive processes improvement, reduce costs and execute strategy.

RPA enables shared services leaders to achieve productivity increases and cost reductions

SSOs should also consider robotics capabilities. “Advanced robotics such as cognitive computing and machine learning tools could perform tasks that SSOs currently have difficulty automating,” says Struhar.

Gartner research finds more than 80% of shared services organizations have implemented robotic process automation (RPA) technology to automate routine, repetitive, rule-based activities. RPA enables shared services leaders to achieve productivity increases and cost reductions in excess of those provided by labor arbitrage alone.

Read more:  Add Data Science Skills to Corporate Finance Decisions

Invest in training and recognize the importance of employees

As SSOs look to increase the value they provide to business-unit customers, successful organizations don’t treat employee training as a discretionary cost; rather, they see training and development as an investment. Our research shows that problem-solving skills are critical to providing a better service for internal customers — ahead of other competencies such as seeking resolutions to any problem and being a good communicator — and problem solving is four times more effective than any sort of functional expertise.

Gartner CFO & Finance Executive Conference

Join the most important gathering for CFOs to explore potential finance tech providers and get actionable insights for how you can prioritize technology investments.

Drive stronger performance on your mission-critical priorities.