What Happens When Your Financial Shared Services Center Stops Delivering Double Digit Cost Savings?
It’s an important part of any initiative to not only set goals, but also determine how a goal will be defined as met. What will success look like? How will it change as different factors come into play?
Financial Shared Services’ initiatives have primarily been undertaken to deliver reduced costs and improved efficiency. These goals are achieved relatively easily within the first few years, and are most immediately being felt through reduced labor costs and centralization.
When they are first established, standardization and centralization deliver up to 50% savings. During subsequent phases, technology automation and outsourcing cut costs further. But if cost savings and efficiency boosts are the only measures of success or clearly defined goals, organizations will reach a point of diminishing returns.
Because of this, it’s important to shift the definition of success when it comes to your Shared Services Center. Where else can you find value if not in your savings? The challenge is maintaining efficiency while also shifting the focus to increasing strategic effectiveness.
So, how can a Record to Report technology solution help?
Well, implementing a solution that results in Record to Report improvements, for example, leads companies to reassign their resources to view data in more detail and spend time proactively looking for improvements rather than reactively dealing with issues. Rather than simply measuring the success of a Shared Services Center through savings it brings in, companies are able to be more strategic and analytical in their day-to-day processes. Time can be spent asking questions such as:
⋅ How can we use KPIs and analytics to improve performance?
⋅ What are the high-risk accounts and how do we focus more effort on these?
⋅ How do we make the process more robust?
⋅ What can this tell us about new trends?
Reducing costs might be the initial benefit that attracts users to a Financial Shared Services Center, but it shouldn’t be a long-term definer of success. Financial Shared Services need to continuously improve their processes to demonstrate value to the business beyond simply reducing cost.
So how will your organization define long-term success?
For more information about how to make the most of your Shared Services Center, check out our webinar, “How Uber & American Express Drive Shared Services Excellence through Record to Report Technology.”
Written by: Kelli Shoevlin & Sam King