By Dan Berthiaume
Across horizontal functions, shared services users are more likely to include higher level transaction-intensive processes than lower level judgment-intensive processes in their shared services activities. For example, data from a new survey conducted by Everest Group and Shared Services and Outsourcing Network (SSON), “Vertical Industry Strategies for Shared Services and Outsourcing Survey,” indicates that within the horizontal F&A function, 93% of shared services enterprises include accounts payable, while 82% include both accounts receivable and general ledger, and 74% include fixed assets.
In contrast, only 53% of shared services enterprises include management reporting within their F&A function, while 50% include tax and 47% include regulatory compliance. Similarly, 66% of shared services enterprises include day-to-day purchasing within their procurement function, while 63% include both accounts payable and vendor management and 53% include catalog management. Judgment-intensive procurement processes such as spend analytics (56%), strategic sourcing (52%) and compliance (50%) are included at rates equivalent to that of catalog management but less than other transaction-intensive processes.
Process Improvement Top Shared Services Goal
Survey data also shows that enterprises using shared services are most interested in improving performance of various business processes. About eight in 10 (78%) of shared services enterprises rate re-engineering and standardizing processes as a top three shared services priority, while 53% rate increasing consolidation and centralization as a top three priority and 50% rate implementing new tools and technologies.
All three of these priorities can be considered “process-centric.” In contrast, the most popular non-process-centric shared services priority, increasing collaboration with business users, was ranked as a top three priority by only 38% of shared services enterprises. Less popular priorities included leveraging analytics and business intelligence (28%), increasing offshoring/nearshoring (19%), and deepening talent pool/expertise (13%).
1 in 4 Shared Services Enterprises Use Horizontal Offshoring
Only about one in four shared services enterprises utilize offshoring as a key component of service delivery for horizontal functions. Within F&A, 22% of shared services enterprises agree and 6% strongly agree they use offshoring, while within procurement 21% agree and 3% strongly agree they use offshoring.
However, slightly higher percentages indicate they do not use offshoring as a key component of horizontal function service delivery. Within F&A, 13% of shared services enterprises strongly disagree and 17% disagree they use offshoring, and within procurement 13% strongly disagree and 16% disagree. Other respondents were neutral or only slightly agreed or disagreed they use offshoring as part of their shared services strategy.
Among all 28 industries surveyed, respondents from government, utilities, and healthcare providers has the lowest levels of offshoring, while respondents from banking, insurance, and life sciences had the highest levels of offshoring.
Mature Users Look beyond Process Improvement
Although overall, respondents were most focused on improving processes via shared services, more mature shared services users were more likely to look beyond simple process improvement and focus on users and driving change. Eighty percent of mature users but only 39% of less mature users said their F&A shared services approach is end-to-end. Less mature users were more likely to rate consolidation as a priority initiative (61% compared to 48%), but mature users had substantially higher levels of rating collaboration with business users (48% compared to 31%) and successfully implementing change (57% compared to 12%) as priority initiatives.