Finance Shared Services Implementation: The Roadmap to Reducing Costs and Improving Customer Service
ScottMadden was engaged to evaluate and implement shared services for a top multinational defense, security, and aerospace company. Because defense industry spending was declining, cost management had become a priority, and the client was interested in identifying opportunities to reduce operating costs. Its competitors had reduced operating costs by successfully implementing shared services, so this model provided a significant avenue for improvement. ScottMadden worked with the client to evaluate and implement shared services to enhance the delivery of finance services, decrease operating costs, and increase competitiveness.
The client wanted to improve several key finance services, including accounts payable, travel and expense, payroll, and time collection and reporting. Historically, the company had grown through acquisitions, and its business units operated as independent entities. Because many of its acquisitions were loosely integrated, there were disparate financial systems and non-standard processes that led to costly and inefficient operations. Finance policies and processes varied by location, and multiple ERP systems were in use. Forty different payrolls and 15 different travel policies added to the overall complexity and inefficiency. Also, a number of government compliance requirements were an integral part of policies and processes. The lack of standardization limited the company’s agility, hindered its ability to efficiently integrate organizations, and made it difficult to realize cost savings.
ScottMadden worked with the client team during three key phases of implementing shared services:
- Assess and Plan: strategic planning, benchmarking, leading practice assessment, site visits and selection, project planning
- Design: current state analysis, business case development, service delivery model design, organization design, technology evaluation, implementation planning
- Build: project management; staffing; policy and process redesign; technology design, selection, implementation, and support; education and training; performance metrics, change management
ScottMadden combined its proven methodology, leading practices repository, tools, and templates and its collaborative approach to develop a solution that was customized to the client’s business requirements.
Assess and Plan
During the Assess and Plan phase, ScottMadden assisted the client in determining the strategy and value proposition for shared services. This phase provided a baseline measurement of costs, productivity, and business drivers, compared the company’s performance to industry peers, and provided a foundation for the Design and Build phases. Specific steps and activities are shown below:
The results of this phase provided the justification to proceed with design and implementation of finance shared services.
Design
During the Design phase, ScottMadden worked with the client to determine the detailed future state infrastructure, quantify benefits of shared services, and develop the operating model. The project team organized separate teams for each work stream, as outlined below. ScottMadden assisted each team throughout the Design phase.
The Design phase produced the following key infrastructure elements:
- Detailed organization for required functions including transaction processing, customer care, and business operations
- Service delivery model for the in-scope finance functions
- Travel and expense: travel approval, expense report submittal, travel expense audit, non-travel business expenses, and P-card
- Accounts payable: invoice imaging, entry, validation, approval, and disbursement
- Time collection and reporting: work authorizations, time entry, travel time, labor training
- Payroll: pay collection and processing, pay calculation, distribution, tax preparation, and pay accounting
- Supporting technologies included an accounts payable system for invoice processing, validation and approval; case management system; process scheduler to automate payroll functions (e.g., file loading, pay calculation, error checks); web-based payroll interface to enable self-service of supplemental pay entry, PTO adjustments, and deductions
- Recommended facility in selected location
Build
In the Build phase, ScottMadden provided ongoing project and change management support required to implement the future state operating model. As in the Design phase, separate teams managed the implementation of each work stream. Key work activities are listed in the figure below:
With ScottMadden’s help, the company successfully implemented a shared services operating model based on leading practices. As a result, the company has realized the following benefits:
- Harmonized policies and processes enable consistent and accurate service delivery and allow the company to leverage its scale.
- Supporting technologies provide greater automation, increased efficiencies, and accessible self-service.
- The new organization, which is structured based on the type of work performed, provides a career path for employees.
- A robust metrics and reporting framework gives greater visibility of performance.
- Standard processes, performed in a consolidated service center, reduce compliance risk and simplify internal and external auditing processes.
- The new delivery model increases the agility of the company by streamlining processes required to integrate newly acquired companies.
The new shared services model has improved the company’s competitive position and is projected to save millions of dollars annually. Additional benefits include improved levels of service, stronger controls, and a platform to accommodate future growth.
Contributing Authors

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