The future of finance shared services.
What affect will the digital evolution have on finance shared services?
The term shared services is usually used to describe a center or department within an organization or company that offers services – accounting, HR, financial services, IT, legal, purchasing – to be utilized by different departments. It wouldn’t make sense for every department to have their own HR department, but they might have an HR rep within shared services. Additionally, some companies have a parent company and several smaller entities nationally or internationally who use the parent company’s shared service model – a regional office might only have a staff of ten people, but the corporate office is staffed by 3,000, so the regional location can tap into the larger base of resources.
Because of the need for regulation and compliance, finance can often find itself as a shared services category – shared services centralize a function of the business, reduces repetition, and creates and enforces standards around a practice. All those features are crucial for the financial operation of a business, whether it’s accounting, payroll, accounts receivable, or accounts payable.
Some of the specific responsibilities of a finance shared services unit would be:
- Budget monitoring
- Financial monitoring
- Specialized reporting
- Contract review
- End of fiscal year requirements and processes
- Preparing monthly and annual budgets
Some of the benefits of a finance shared services models include:
- Cost reduction
- Better quality control
- Better reporting
- Reduced redundancy
- Increase speed of service delivered
So, while it can be beneficial to work under a shared services model for some organizations, changing an organization to create shared services can be difficult for people who are unfamiliar with it. Some finance shared services best practices to consider during organizational transformation include:
- Work to create a culture of collaboration before beginning a shared services model
- Communicate expectations clearly
- Make sure roles are well-defined – who will be responsible for what? Who will function as a liaison between departments and shared services? Who will own the process of resolving disputes?
Changing finance to a shared services model ultimately will change the organization structure, so it should be done slowly. Another thing to think about when considering shared services is the role of digitization and what future impact that will have on finance shared services.
- Digitization helps reduce complexity and streamline services, ultimately helping to drive down costs.
- Digitization can increase collaboration and speed of service for global finance shared services.
- Digitization can help expand the capacity for shared services across an organization.
- Digitization can help to add or create more services without expanding the shared services staff, but simply by offering technologies that increase process speed and reduce effort by optimizing procedures.
Ultimately, the digitization makes it easier for businesses to adopt shared services models, because it adds value to the business through better reporting and analytics, increased completion rates of projects at reduced completion times, and helps to simplify and streamline processes and communication, creating a better standard of quality and overall service. Does your business use any shared services modeling? Has it improved the standard or quality of parts of your business? Has it increased overall value to the business?