A Practical Roadmap for Implementing Shared Services in Global Operations

In last week's newsletter, I discussed how finance could best serve a global operation. One key element is centralisation vs. decentralisation. Decentralise what is best done locally to support the business unit, while group accounting will always be done at the centre. But what about other areas? Transaction processing and support services? There's a strong case to centralise these and use a shared service model. By centralizing and standardizing these areas, organizations can leverage economies of scale, enhance process optimization, and free up resources to focus on strategiIc priorities.

However, implementing a shared services model is not a straightforward exercise. It requires a well-planned and phased approach to ensure a smooth transition and maximize the benefits. In this article, we'll explore a practical roadmap for finance leaders to introduce shared services in a global operation.

Understanding the Shared Services Landscape

At its core, a shared services model involves the consolidation of back-office functions, such as accounts payable, payroll, and financial reporting, into a centralized unit. This centralized unit can then provide these services to various business units or regions, ensuring consistency, efficiency, and cost-effectiveness.

The key benefits of a shared services model include:

1. Cost savings: By centralizing and streamlining processes, organizations can often reduce the overall cost of delivering finance and accounting services.
2. Improved service quality: Shared services centers can leverage specialized expertise, standardized processes, and advanced technologies to enhance the quality and consistency of service delivery.
3. Enhanced control and compliance: Centralized governance and oversight can improve control over finance and accounting processes, reducing the risk of errors and ensuring compliance with regulations.
4. Freeing up resources: By outsourcing routine transactional activities, finance teams can redirect their focus towards more strategic and value-added initiatives.

Assessing Readiness and Identifying Opportunities

The first step in implementing a shared services model is to assess the organization's current state and identify opportunities for improvement. This involves evaluating the existing finance and accounting processes, organizational structure, and technology infrastructure.

Key questions to consider during this assessment phase include:

• What are the existing finance and accounting processes, and how do they vary across different business units or regions?
• What are the pain points and inefficiencies in the current operating model?
• What is the organizational maturity and change readiness of the finance function?
• What technology capabilities are available, and how can they be leveraged to support shared services?

By understanding the current landscape, finance leaders can pinpoint areas where shared services can deliver the most significant impact and gain buy-in from key stakeholders.

Developing a Shared Services Roadmap

With a clear understanding of the organization's readiness, the next step is to develop a comprehensive shared services roadmap. This roadmap should outline the target operating model, the phased implementation approach, and the change management strategy.

1. Target operating model:
2. Phased implementation approach:
3. Change management and stakeholder engagement:

Successful implementation of a shared services model requires a thoughtful and well-executed change management strategy. Finance leaders should work closely with HR, IT, and other key stakeholders to ensure a cohesive and coordinated approach.

Leveraging Technology and Process Optimization

Technology plays a crucial role in the success of a shared services model. By investing in the right tools and systems, organizations can streamline processes, enhance data analytics, and improve service delivery.

Some key technology considerations include:

• Robotic Process Automation (RPA) to automate repetitive, rule-based tasks
• Enterprise Resource Planning (ERP) systems to integrate and centralize data
• Cloud-based solutions to enable remote access and collaboration
• Business Intelligence (BI) and analytics tools to drive data-driven decision-making

In addition to technology, finance leaders should also focus on process optimization. This involves standardizing and harmonizing finance and accounting processes across the organization, eliminating redundancies, and leveraging best practices.

Measuring Success and Continuous Improvement

Implementing a shared services model is an ongoing journey, not a one-time event. Finance leaders should establish clear performance metrics and regularly review the success of the shared services center.

Key performance indicators (KPIs) to track may include:

• Cost savings and efficiency gains
• Service quality and customer satisfaction
• Compliance and control metrics
• Productivity and process optimization

By continuously monitoring and improving the shared services model, organizations can unlock additional value and stay ahead of the curve in a rapidly evolving business landscape.

Find Out More

Vineta Bajaj is joining me in a webinar on Monday 12th August to share how she has approached delivering finance across the Rohlic Group as group CFO.

You can book your place here https://www.growcfo.net/events/

In Conclusion

Introducing a shared services model in a global operation is a strategic and complex undertaking. However, by following a practical roadmap that encompasses assessment, planning, implementation, and continuous improvement, finance leaders can successfully navigate this transformation and position their organizations for long-term success.