Key insights from Deloitte's 2015 Global Shared Services survey
Ask the pro: Noemie Tilghman
2015 marked our seventh biennial global shared services survey, allowing us to consistently measure a number of trends including the value and benefits organizations are getting from their shared services efforts.
As many companies seek to identify additional ways to drive value through their shared services organization, is there a ‘right’ way to expand?
While there is no ‘right’ way to expand, we are seeing three primary methods of expansion–geographic, functional, or process value expansion:
- Those prioritizing geographic expansion are looking to make the best use of talent around the world while coupling their reach into countries as a part of their overall sales and marketing efforts.
- Others who have tested shared services concepts in one or two core functions (e.g., Finance or IT) and understand the benefits are now seeking to move towards more of a multi-functional model to better enable labor flexibility and to allow for greater organizational focus on market-facing activities.
- Lastly, those who have succeeded in consolidating transactional work into their shared services centers and have maturing operations are looking to go deeper into a particular function focusing on moving from transactional processes to more knowledge-based activities.
Given there are multiple ways to expand and to drive value for an organization, the question becomes, is one method more valuable or more achievable than the others or should an organization try to do more than one at a time. The answer lies in each company’s current situation.
First, how much change is your organization undergoing at this time? If there are multiple transformation projects taking the lions-share of your executive team’s focus, attempting to make too many shared services changes at one time may result in failure. In contrast, if there is a belief that a drastic change in the overall operating model will support your organization’s total strategy, it may make sense to drive a coordinated shared services expansion that takes advantage of multiple methods.
It is clear that most companies are considering how best to expand their shared services footprint. What remains to be seen is how much advantage one will gain and how big of a discernable cost and quality gap one will create by moving faster and leveraging multiple expansion methods at the same time in the constant battle for competitive advantage.
Given the maturity of shared services today, are people still seeking and realizing benefits?
2015 marks our seventh biennial global shared services survey. This has allowed us to consistently measure a number of trends throughout the last 16 years including the value and benefits organizations are getting from their shared services efforts.
Given the economic pressures of late, many companies continue to look to shared services to systemically lower their infrastructure costs. That has remained at the core of a shared services journey since the start of this concept. That said, this year’s global shared services survey results also highlight that there are many additional benefits being achieved.
Specifically, increased process quality and improved customer service levels are also among the base expectations of any shared services transition in recent years. To not achieve both of these in conjunction with a decrease in costs can result in a perceived failure with respect to a shared services journey.
The benefits do not end there, as many respondents reported their shared services organizations are driving significant impact on a number of larger factors, including improved internal controls, enhanced data visibility and comparability, increased working capital, enriched enterprise-wide tax planning, and augmented growth / scalability and acquisition integration capabilities, just to name a few. In turn, it is clear that when thinking about embarking on the shared services journey or moving to version 2.0, it is critical to understand all of the ways shared services can drive value for your organization to structure a program which allows you to realize as many of these positive benefits as possible.