The Shared Service Center (SSC) can be a profit-generating business partner
Monday, 27 Apr 2015
A few weeks ago, I had the privilege of meeting a group of Shared Service Center leaders in Manchester, UK. The meeting was organized by Shared Services Forum UK and sponsored by Basware. The room was packed with financial services leaders and Managing Directors discussing the latest trends and their own experiences with centralized finance functions.
Product Marketing Manager
Centralizing financial operations into SSCs is not a new thing. In fact, the idea of improving service quality while lowering operating costs and enabling ongoing performance improvements can be attributed to Kaplan & Norton's Balanced Scorecard in 1992.
This idea evolved: it was first applied to the Human Resources function, and was introduced to financial organizations at the turn of the century. Basware has been working with Shared Service Centers from the start. Today, 80% of Accounts Payable (AP) organizations are either centralized or are part of Shared Services Centers¹.
Going from financial units in business groups to Shared Services Centers may take a long time to mature. The initial advantages of an SSC may appear very operational - raising concerns about the business value beyond operational cost savings. SSC leaders need to convince boardrooms to invest in consolidated and harmonized business processes and business support systems. They need evidence of how the Shared Service Center can provide more reliable financial data, more precise analyses, and better forecasting to their customers - thereby increasing their value to them.
In order to demonstrate this increased value to the customer organizations, SSCs will need to become independently managed profit centers - potentially later evolving towards Global Business Services.
Of all the benefits SSCs offer, the ability to provide a globally managed end-to-end P2P process in a rigorous set of IT systems will deliver both short-term efficiency and long-term value through working capital management.
Basware has been working with Shared Service centers for 15 years. We have helped customers establishing and improve their SSC. These customers include South Australian Government , SITA in the Netherlands , and ELFS in the UK.
We firmly believe that the trend towards Financial Shared Services Centers and Global Business Services will only accelerate.
In my series of blogs on Shared Service Centers, I will analyze how Shared Service Centers evolve and go through their value proposition from efficient invoice handling organizations into profit-generating business partner.
Related assets: A CFO’s Guidelines for Streamlining Shared Service Center Operations