Global

Finance
360 AFTER THE GO-LIVE
TEN FOCUS AREAS FOR EFFECTIVE
SHARED SERVICE DELIVERY
Author: Stephen G. Lynch

Creating and deploying a Shared Service Organization is a major initiative that

Ten areas of focus to requires substantial commitment from an organization. Yet the deployment of a
drive performance in a Shared Service Organization is only the beginning of the journey to create a
Shared Service high-performing service organization that partners with the Business Units and
Organization: continuously creates value. True value creation occurs over time. As part of an
on-going commitment, the following ten areas should receive management’s
1. Engage in regular attention to drive value creation in the Shared Service Organization.
and consistent
Engage in Regular and Consistent Governance
governance
2. Monitor As part of the planning process for the Shared Service Organization, a
compliance with governance structure should be created to ensure appropriate oversight of the
the Service Level Organization. If the Shared Service Organization has multiple service centers
Agreement globally, the governance program will guide the entire Organization as well as the
individual centers.
3. Standardize and
Governance committees should exist for the entire Shared Service Organization
optimize and for the processes within the organization. The Steering Committee should
processes be comprised of senior level executives with overall responsibility for the Shared
4. Standardize and Service Organization. They resolve issues that haven’t been resolved at lower
optimize levels, provide continued funding of the organization, and guide the expansion
of the Organization to incorporate additional functions that will drive valuation
technology
creation.
5. Invest in training Process councils should be created to give oversight to each major process
6. Benchmark to handled by the Shared Service Organization. For example, the Procure-to-Pay
monitor process would receive oversight from executives in Procurement and Finance to
ensure that global processes were as consistent and efficient as possible, to help
performance
resolve any conflicts that arose between organizational units, and to continue
7. Evaluate evaluating additional improvements that will drive efficiency while delivering value
additional to the Business Units.
processes to
move to the Monitor Compliance with the Service Level Agreement
Shared Service In every shared services project there are those in the organization, particularly
Organization in the business units, that doubt the promised benefits will materialize and that
the service center is truly capable of providing the level of service the business
8. Reevaluate the units enjoyed when they had their own support services. Don’t prove them right.
captive vs. Once the service center goes live it’s time to hit the ground running and live up to
outsourcing the promises made. This means living by the service level agreement and
decision constantly monitoring the Center’s performance against the service level metrics.
9. Monitor
opportunities for Standardize and Optimize Processes
additional
Processes should be standardized as they are transferred from the Business
sourcing centers Units to the Shared Service Organization. However, even under the best of
10. Foster a culture of circumstances there will still be more work to do. Once the processes are
continuous actually being serviced from the SSO, additional opportunities to standardize the
improvement
Global Finance 360 | Copyright 2010 | All Rights Reserved 1

About Global Finance 360
Global Finance 360 covers the
world of corporate finance and
accounting and how these
activities are impacted by
globalization. Focus areas
include Finance Delivery
Strategy, Shared Services,
Business Process Outsourcing,
Process Improvement and
Organizational Design.
Global Finance 360 is run by
Steve Lynch. Mr. Lynch is a
Principal in the Finance
Transformation practice of a
global consulting company. He
is responsible for the marketing,
sales and delivery of Finance
Transformation services in North
America and serves as a key
liaison for his company’s global
Finance practice. He brings
more than 15 years of
experience advising global
companies on their service
delivery strategies and has
served over 60 clients in a
variety of industries including
consumer products and
industrial manufacturing,
aerospace & defense,
transportation, technology,
entertainment and financial
services. He has also served as
a Controller in private industry
and as an auditor in public
accounting.
Mr. Lynch is an active content
contributor on the topics of
Finance Transformation and
globalization and has presented
at various forums including the
IQPC Shared Services &
Outsourcing conference. He can
be found on the web at
www.globalfinance360.com.
Contact Information:
Steve Lynch
Toll-free: +1.800.216.2512
Office: +1.719.481.2599
1042 W. Baptist Road
Suite 194
Colorado Springs, CO 80921
slynch@globalfinance360.com
www.globalfinance360.com
processes will be identified. Additionally, opportunities to optimize the processes
to enhance service delivery and reduce costs through the elimination of non-
value added activities should also be identified.
Standardize and Optimize Technology
Just as processes are not completely standardized during the transfer to the
Shared Service Organization, technology may sometimes not be standardized as
part of the move to Shared Services. While it’s true that a Shared Service
Organization is often created or enhanced as part of an ERP implementation or
upgrade, there are times when the business case for shifting resources
independent of a technology implementation makes sense. This is particularly
true when positions are moved to an offshore location. In that event, a plan to
rationalize the disparate technology platforms is needed.
In addition to the standardization of the core technology platforms, Shared
Service Centers often benefit by the implementation of bolt-on applications to
enhance the effectiveness of the existing technology infrastructure. Examples
include specialized applications for Collections or Reporting.
Invest in Training
Training is one area that often gets short-changed as part of the Shared Services
process. Personnel are often left to learn on-the-job or to be taught by another
person in the department without the benefit of a standardized training
curriculum.
A formal training program is always relevant, but particularly so when positions
are moved offshore and processes have been substantially transformed. In an
offshore move there is typically little to no continuity of personnel. Remember
that the Shared Service Organization will be working to perform to the Service
Level Agreement and silence any remaining critics of the move to Shared
Services. It’s critical that employees understand not only their job but also the
commitments of the Shared Service Organization and the expectations of the
Business Units as codified in the governing documents. Equally important is an
ongoing commitment to training to bring new recruits up to speed and to keep
existing employees’ skills fresh.
Benchmark to Monitor Performance
When a Shared Service implementation is performed correctly, a benchmark
exercise will have been completed as part of the current state discovery process.
At that point in the transformation effort, baseline performance metrics are
established to understand the gap to high-performing companies and to help
prioritize the roadmap for the journey to high performance.
A benchmarking exercise should be conducted on a regular basis after the go-
live. A successful benchmarking program will have clearly defined metrics to
measure both the effectiveness of service delivery (i.e. cycle time, defect rates)
and the efficiency of the processes (i.e. the cost and organizational structure
required to deliver the services). Additionally, there must be systems to
automate the majority of the data collected. Otherwise, the demands and
associated costs of collecting the information will soon outweigh the benefits of
the benchmarking program and the program will eventually be dropped.
Global Finance 360 | Copyright 2010 | All Rights Reserved 2

About Global Finance 360
Global Finance 360 covers the
world of corporate finance and
accounting and how these
activities are impacted by
globalization. Focus areas
include Finance Delivery
Strategy, Shared Services,
Business Process Outsourcing,
Process Improvement and
Organizational Design.
Global Finance 360 is run by
Steve Lynch. Mr. Lynch is a
Principal in the Finance
Transformation practice of a
global consulting company. He
is responsible for the marketing,
sales and delivery of Finance
Transformation services in North
America and serves as a key
liaison for his company’s global
Finance practice. He brings
more than 15 years of
experience advising global
companies on their service
delivery strategies and has
served over 60 clients in a
variety of industries including
consumer products and
industrial manufacturing,
aerospace & defense,
transportation, technology,
entertainment and financial
services. He has also served as
a Controller in private industry
and as an auditor in public
accounting.
Mr. Lynch is an active content
contributor on the topics of
Finance Transformation and
globalization and has presented
at various forums including the
IQPC Shared Services &
Outsourcing conference. He can
be found on the web at
www.globalfinance360.com.
Contact Information:
Steve Lynch
Toll-free: +1.800.216.2512
Office: +1.719.481.2599
1042 W. Baptist Road
Suite 194
Colorado Springs, CO 80921
slynch@globalfinance360.com
www.globalfinance360.com
Evaluate Additional Processes to Shift to the Shared Service
Organization
Once the Shared Service Organization is up and running, the governance
committees responsible for oversight should regularly be engaged in identifying
additional processes and activities that could be moved into the Shared Service
Organization. There will also be opportunities to bring additional Business Units
into the fold. The goal is to continuously evaluate new opportunities to leverage
the investment in Shared Services and to continue the value creation process.
Reevaluate the Captive vs. Outsourcing Decision
Despite the best efforts of the sourcing team to evaluate the overall delivery
strategy in the captive vs. outsourcing decision, the reality is that conditions
change and assumptions that were once thought reasonable are proved to be
untrue. As part of the ongoing effort to maximize the effectiveness of the delivery
structure, the Finance Management team should periodically reevaluate the need
to outsource a process that was previously handled in-house. However, the
process works both ways. Sometimes an outsourcing relationship isn’t working
out as planned and it makes sense to Insource the process to provide better
service.
Monitor Opportunities for Additional Sourcing Centers
In a world marked by globalization, new countries and cities are regularly
developing the maturity necessary to be seriously considered as a service
delivery location. A balance is needed between the critical mass necessary to
obtain economies of scale and the opportunity to move processes and activities
globally to refine the global delivery system and leverage lower labor rates.
Additionally, it can make sense to grow the support processes in geographies
that require additional support, such as an expansion of operations in Asia or
Latin America.
Foster a Culture of Continuous Improvement
High-performing companies make a commitment to continuous improvement in
every area of their operations. This improvement focus is centered on both the
effectiveness of service delivery as well as the relentless pursuit of ever
increasing efficiency. Senior management must be visible in their commitment to
the process, not only in word but in deed. Funds must be allocated to the effort
and the Shared Service Organization’s management team must be held
accountable for delivering on promised and potential benefits. Formal quality
programs such as Six Sigma can play an important role continuous improvement.
Conclusion
By committing to these ten principles, a Shared Service Organization will be focused
on delivering the value necessary to support strategy, optimize processes, reduce cost
and drive innovate practices over the Shared Services lifecycle.
Global Finance 360 | Copyright 2010 | All Rights Reserved 3