The role of Shared Services and GBS in delivering Finance Analytics

Finance Analytics in action

Finance is the custodian of a significant amount of data. To support the strategic and tactical priorities of the wider organisation many Finance functions not only analyse readily available financial data but also undertake analysis of macroeconomic, sales, marketing and customer data.

Finance dedicates resources to the governance, architecture and integration of data. Without robust management information it is difficult to determine the facts needed to report findings and to make recommendations. Only when Finance trusts and understands the data can actionable insights be discovered.

It is typically Finance Business Partners who interpret and communicate insights to the wider organisation. The teams that establish and report the facts that are used in insight generation focus on three types of Finance Analytics:

• Financial Planning and Analysis
• Decision Support
• Risk and Controls Analysis

Executives are placing an increasing focus on the ability of Finance to provide insights that guide, influence and challenge decision-making in the wider organisation. This has resulted in the increased importance of Business Partnering and Finance Analytics. Recent Deloitte research found that the typical UK Finance function now focuses a quarter of its total capacity on Decision Support and Business Partnering activities.

Figure 1. The changing way Finance uses data to generate insights

Source: Deloitte LLP

Financial Planning and Analysis and Decision Support in GBS organisations

Figure 2. Examples of Finance Analytics
Source: Deloitte LLP

Many Finance functions have established operating centres for Financial Planning and Analysis (FPA) and Decision Support within their shared services or Global Business Services (GBS) organisations. These operating centres free up capacity and capability for Business Partnering development in the commercial-facing parts of the Finance function.

By locating Finance Analytics within GBS two further benefits can be realised. Co-location of management reporting and performance analysis allows for a more integrated and efficient set of processes. While the fundamental principles that underpin shared services – standardisation, centralisation and automation – improve the quality of management information.

To realise these benefits GBS organisations need several key building blocks in place, including:

• Integrated analytics architecture – a data warehouse that effectively interacts with the organisation’s ERP systems, visualisation software, Cloud-based planning tools, internal processes and external data sources.
• Process and activity framework – an understanding of the critical roles and outputs of FPA and Decision Support teams and how they interact with Business Partners and other stakeholders.

Risk and Controls Analytics in GBS organisations

Undertaking Risk and Controls Analytics in GBS organisations allows for a more proactive approach to managing risk and improving compliance responsibilities. GBS organisations own large data sets and a wide range of transactional processes that can be cumbersome to audit. This type of analytics allows organisations to improve internal and external audit efficiency. While more accurate data matching and reconciliation can also be achieved, which in turn creates greater confidence in the Key Performance Indicators (KPIs) produced by GBS organisations.

Process inefficiencies, non-standard transaction flows and ‘bottle necks’ can be identified using Risk and Controls Analytics. While end-to-end visualisation techniques can easily communicate process deviations to stakeholders. This particular type of process pathway analysis can be used to determine  the time taken to complete each process step, which creates greater visibility into process flow paths.

GBS’s role in creating an ‘insight-driven’ organisation

GBS is not only the custodian of huge quantities of Finance data but also data from other functions and business units. As organisations attempt to become ‘knowledge-led’, the multifunctional model employed by GBS enables the delivery of enterprise analytics services. For example, GBS can integrate data from disparate HR legacy systems to provide a holistic view of workforce productivity. GBS is also well placed to undertake supply chain, operations or sales analysis. Unlike other parts of the organisation or a single function shared services, the ability to use a wide range of structured and unstructured data on such a significant scale and across multiple functional areas is unique to GBS.

As a result, GBS can provide the perfect location for establishing enterprise analytics. A significant number of GBS organisations have begun to take overall ownership of Analytics rather than play a supporting role as in the past. While the reasons GBS is an attractive location for building analytical capabilities are varied, the need to control operational costs and access talent in offshore locations are key components.

Deloitte point of view

Finding a home for Finance Analytics in a GBS or Shared Services organisation provides many benefits. However, no matter where your analytics activities are located, actionable insights can only be generated if Finance is clear about what they want to achieve with the data they analyse. Benefits can be found by combining analytics with visualisation software to enable information to be communicated effectively to a range of stakeholders. Analytics alone will not solve an organisation’s process problems nor will it provide the actionable insights desired by decision-makers. The impact of Finance Analytics will be dependent on whether or not the FPA and Decision Support teams know the outcomes that need to be supported by their analysis.