Financial Services Execs Should Think ‘Shared Services'
By Derrick Murphy, CEO, ibml
Not surprisingly, automation is central to most organizations' efforts to streamline their AP processes. But an organization's success in optimizing their financial operations may lie not just in automating functions such as AP, but in consolidating them as well.
That's where a financial shared services strategy comes in. Through financial shared services, organizations can consolidate the redundant processes of a decentralized financial operations environment to reduce costs, enhance productivity and increase quality. Many financial functions, including payables and accounts receivable management, expense processing, purchasing and payroll are natural candidates for financial shared services.
Properly executed, shared services centers are expert in automating repetitive transactions and transactional processes like these and achieving economies of scale unavailable to far-flung departments. What's more, deploying a shared services environment opens the door for organizations to create a center of excellence for financial operations, to drive standardization (for process definitions, business rules, data structures and more) and to improve consistency and reliability. Contrast this with distributed AP processing, which is inconsistent and nontransparent. Additionally, aggregating data in a shared services environment streamlines reporting and audit tasks and enhances visibility into corporate financials, arming organizations with the timely information they need for decision-making. Just think of the untapped information that flows through an AP department every day.
It's for these reasons that adopters of financial shared services report benefits of up to 30 percent, according to The Hackett Group. Ibid says shared services can help companies reduce finance and accounting costs by 20 to 40 percent over three to five years. Dan London, managing director of Accenture's Finance & Performance Management practices is blunt: "Shared services capabilities have been and continue to be critical enablers for business' survival during this downturn."
And there's another reason that the time might be right for organizations to consider deploying financial shared services: enterprises that demonstrate mastery of shared services can sustain and strengthen their market position for the economic upturn, according to findings from Accenture. Corporate America is starting to take notice.