Issue 72: Saving you money in Finance Shared Services for just One Day of your Time
Everybody tells you that Training is an Investment. However, I think its much more than that, I believe if it doesn't give you concrete Savings you can apply in your Business Transformation Programs its not Training, its a day out.
Let me tell you a story about the UK CFO of mid sized business, the Waiter and Cost Control on Building a Finance Shared Services Centre. Please read on.
We have all been in that position as the Waiter approaches the Table with a mental tot in our own heads as to the cost of the meal. As Finance people we are hard wired to keep an eye on the costs, to mind the pennies and to realise the value in any Transaction. I defy any Accountant Subscribing to this to tell me they have not raised an eyebrow and gone, sorry how much is that, when presented with the Bill, even if only in their own heads.
When I started my career in Shared Services back in 2001 I was introduced to the concept of Enabling Technologies. Now everyone who is considering an FSSC in 2025 will hear this phrase at some point in the Project. It will sound something like this:
"Oh the ERP doesn't do that or it doesn't do it to sufficient depth. Yes we acknowledge that Process XYZ is the core of what your Business does but no unfortunately the ERP doesn't 'really' cater for it, you need, drum roll please, an Enabling Technology."
In English to our Cost conscious CFO this means another piece of software which you must select, contract for, pay for and 'successfully' rollout to your teams in addition to the ERP. It is additional cost, which wasn't in your mental calculations as the Waiter, sorry Program Manager, approached your Table.
Now I don't wish to digress into software because that is such an involved conversation I would need to be sitting in your Office when we have it. No, what I want to talk about is the 'Essential Add-Ons' of building a new Finance Shared Services Centre in 2025 and they are all people. Well I caution myself at this point to say they are currently people, with AI...who knows.
Remember, when I gave you the CFO Golden Rule? Never rob a Bank across the street from a Diner serving the best donuts in 4 Counties? No, not that one.
Never build a FSSC if you have less than 80 Finance staff in total across the UK, that Golden Rule. Many of you contacted me with somewhere between 60 and 70 and said, lets talk, we think we can make this fly and do you remember what I told you?
I said No.
Then you looked at me, suitably miffed as only a Professional can be when their desire is called into question. Yes, you know that look. I then explained the Essential Add-On's and your face dropped and you thought 'ahh ok' he might have a point there.
As I explained when I set the scene at the start of this Newsletter, you are the CFO of a UK based Business with Finance staff spread across 6 UK Locations and 3 Business Units with c.120 FTE in Finance and an aging ERP, in need of an Upgrade. I am the answer to everything you wanted to know about Finance Shared Services but were afraid to ask.
You are cost conscious, you may be PE backed, you have most likely not directly encountered Shared Services before, you think its all cost savings, headcount reductions and a service culture par excellence overnight. You may be right depending on the level and skill of the resource you dedicate to the Project but that is the exception not the rule.
Remember I never allow 'Lift & Shift' but there is another way in case anyone suggests it to you but we can talk about that another day. The CFO hands me their Organisation Chart and looks expectantly at me, new ERP they say, what will I get a straight line 20% cost reduction?
I pause for a moment and introduce the Essential Add-On's in a scenario where you have never been Transformed before, have antiquated Processes and most likely a tonne of Compliance failures (job costing and I don't mean ABC). I explain that when a new FSSC is established that new Roles are created to support its deployment and ongoing success.
They stop dead. New Roles? More people? By the looks of it more costly Roles? They start to back peddle like Gary Neville in his prime. New Roles, they say again slightly incredulous? Why? Who? What for? I thought Shared Services was a panacea, where is that Waiter!!!
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The Waiter stands there patiently & respectfully. The conversation goes something like this:
Waiter - Broken End to End Process Sir?
CFO - Well yes, its not perfect but I only just took Office as CFO and the systems are creaking, my predecessor was part of the furniture and I need to overhaul the team.
Waiter - No problem Sir, that will be 3 GPO's added to your Bill. The Global Process Owner Sir, a vintage particularly in the P2P space and I think you will find they bear fruit over about 3 years if you pick a good one...
Waiter - Will that be a new System Sir or an Upgrade to the current one? Ahh a new one then that will be a new Finance Systems Manager Role added Sir, I can recommend one for you if you like, they are so hard to find.
CFO - 'Hells bells' is there anything else I've not factored in???
Waiter - Well Sir, the discerning Customer usually goes with a couple of Finance Business Partners. They are all the rage, can fix anything, smooth over disputes, the Rolls Royce of service delivery, Purr like a Spitfires engine, just ignore the Price tag, if you can find one...
CFO - How many? What Cost?? On what basis???
Waiter - Well Sir we do find if you have to ask...you can't afford one, two or three of them.
When you build a new FSSC you design what is known as the Retained Organisation, that means how ALL of Finance is structured with the FSSC playing it's Role within it and yes I am sorry to have to break it to you but you will have to create new Roles.
Now in my next Article I will tell you, based on my experience, how to really make Savings without the Add On's.
Considering FSSC in 2025? Like to explore it with me in a One Day Workshop? Reach out and lets get you Booked in.
Best Regards,
Michael Ryan.
Finding what you didn't know was lost, seamlessly.
3 个月Look at the “no’s†people - it’s important! Thanks Michael Ryan