Financial Shared Services: Leaders Do a Lot of Things Right
Executive Summary of Key Findings
In January of 2019, ScottMadden’s Brad DeMent and Trey Robinson delivered a webinar to discuss the results of the latest finance shared services benchmarking study. The study was designed by ScottMadden and surveys were administered by APQC over four cycles: spring/summer 2014; spring/summer 2015; summer/fall 2016; and spring/summer 2018. The scope of the study covers the following topics for an in-depth analysis of financial shared service centers (SSCs): Delivery model, scope of services, staffing, performance, and technologies leveraged.
This article highlights key takeaways from the study, including the attributes of top-performing SSCs and historical trends over the last four years of the survey. Data from the survey shows that top performers consistently outpace the comparison group to run more efficient, more productive, and less expensive SSCs that leverage the best technology to optimize process work and better serve their customers.
Access the complete article series here.
Key Study Findings
Top Performers Lead the Way on a Wide Range of Metrics
Top performers were those organizations in the study that consistently led the way across key cost, staffing, and performance metrics. These shared service organizations, according to DeMent, “have the best performance not in three or five of those key metrics, but across all 10 of them. Think of them as the leaders of the pack.” Data from this year’s survey shows that top performing SSCs:
- Show broader global coverage and have more complex global models
- Report to a finance executive and are governed by the finance function
- Leverage the global process owner role and service-level agreements for global process governance
- Have dedicated finance employees to handle inquiries and show higher first-contact resolution rates, resulting in better customer care
- Adopt end-to-end processes more than the comparison group and generate more savings as a result
- Deliver high-value services through more centralized models
- Leverage robotic process automation (RPA) and intelligent automation (IA) more frequently than the comparison group
- Are 2 times to 8 times more efficient in staffing major finance processes
- See greater cost savings: The comparison group spends 3 times to 4 times more to operate SSCs and to perform the finance function
- Are 2 times to 5 times more productive than the comparison group in performing key financial processes
Key Trends and Trajectories
The four-year scope of the study provides insight into ongoing as well as newly-emergent trends in SSC growth, criteria for selecting SSC locations, and customer care.
Global Growth Trends
The last four years have shown a trajectory of rapid growth in new SSCs, most of which is taking place in Europe and North America. While the 2014 survey found that 50 percent of organizations had an SSC located in North America, that number grew to 67 percent for 2018. Europe has seen even more explosive growth, nearly doubling the number of SSCs in the region from 26 percent to 49 percent over four years. Latin America and Asia Pacific, by contrast, have remained relatively flat. Robinson explained that the lack of growth in these regions is largely explained by greater automation: Needing fewer people for routine, transactional, and highly manual tasks has diminished the advantages of establishing lower-cost SSCs in Asia-Pacific and Latin America.
Key Shifts in Criteria for SSC Locations
“Historically, cost was the most important attribute when considering a new location,” Robinson said. However, several years ago we saw a shift from cost to labor as the most important criteria. Having access to the right people, including the functional skill sets and the ability to speak multiple languages—especially in Europe—are key drivers.” Because the best locations are often saturated with many SSCs, the ability to maintain low turnover rates is a key consideration for labor as well. Other top criteria for locating an SSC include tax considerations, infrastructure, leverage of existing sites, logistics, cultural fit with the organization, political and economic stability, crime, and risk of natural disaster.
Customer Care Improvements
Advances in technology, including the increasing prevalence of customer self-service portals, automation, and virtual agents, are raising the quality of customer care and making customer care teams more efficient. First-contact resolution rates have been rising steadily over the last four years: The top quartile resolved 80 percent of cases on first-contact in 2014, while the most recent survey shows those numbers have risen to 84 percent. While resolution rates are increasing, the size of customer care teams is decreasing. Data from this year’s survey shows that the median shared services organization dedicates 11 percent of its employees to customer care, down from 18 percent in 2014.
The study population is robust and diverse, with 468 organizations participating. While 64 percent of participating organizations are from the US and Canada, respondents also included organizations from Europe (26 percent), Asia-Pacific (8 percent), and Central and South America (2 percent). Company size is balanced across the revenue profile, with median revenue of $7.8 billion. Most organizations (89 percent) have been operating for more than three years, and more than half have been operating for longer than five years.View More
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