Multi-function Shared Services: Insights from an Accenture Research Study

Businesses and governments are increasingly considering multi-function shared services models to obtain sustainable advantage on the path to high performance. Accenture research shows that while the benefits of multi-function shared services are even greater than expected, they do present certain challenges. The research also highlights key success factors in overcoming these challenges.

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In the continuous quest for sustainable advantage, businesses and governments are turning increasingly to multi-function shared services operations as an enabler of high performance.

The benefits of shared services implementations to date tend to have been limited by their scope. Some organizations restrict shared services to a single function, such as human resources or finance, while others may run it across multiple functions but not in an integrated fashion.

A third group, however, does execute true multi-function shared services solutions. While challenging, such solutions deliver more benefits than organizations had initially projected.

Accenture investigated the state of the shared services industry in a global online poll over two months, supplemented by in-depth interviews with leaders of multi-function shared services organizations.

The concept of shared services is not new, but increased current interest is fueled by the search for the next-generation of improvements that can be leveraged from this model.

Some of the key findings from the research include:

• Sixty-four percent of respondents not running a multi-function shared services center are considering doing so.
  
  
• Next on the list for shared services are IT (43 percent), human resources (47 percent) and procurement (37 percent).
  
  
• Nearly 80 percent of respondents cite the need to continue delivering service at incrementally lower costs as the primary driver for considering multi-function shared services.
  
  
• Although only 42 percent anticipated the sharing of leading practices across functions as a benefit of multi-function shared services, 72 percent subsequently experienced it as a benefit.
  
  
• Fifty-two percent of respondents see process integration as a benefit of multi-function shared services, while more than 50 percent say it allows them to deliver service more consistently to all their customers.

Despite the benefits inherent in multi-function shared services, this model does present a number of organizational and operational challenges.

Organizational challenges include resistance to change (48 percent), exacerbated by the reluctance of functional leaders to relinquish control. Weak support at executive level tends to magnify organizational challenges.

In respect of operational challenges, respondents found that the concerns they most frequently highlighted at the beginning of a multi-function shared services implementation—building the project across functions (24 percent) and having the right skills in the right location (16 percent)—were actually the least challenging. Some high-performance businesses, in fact, operate a multilocation shared services model, recognizing that one location might not be able to satisfy all needs.

Respondents in Accenture's study isolated a number of factors that contribute to the success of multi-function shared services models, so enabling the journey toward high performance.

Based on these responses and Accenture's own experience in designing and implementing multi-function shared services models, the following are some of the key ingredients for success:

• Executive-level mandate: Most respondents (70 percent) said that executive sponsorship is critical to success.
  
  
• Ownership culture: Everyone in the multi-function shared services operation needs to act like an owner. Companies have developed various strategies to reward this behavior.
  
  
• Operational excellence: Employees must also think like operators, focusing on service and process excellence.
  
  
• Business partner relationship: A culture of continuous improvement must be created to inspire a sense of partnership with the wider enterprise.
  
  
• Comfort with matrix management: While this may be confusing, it works because different stakeholders have different needs.
  
  
• Experienced leadership: The most successful multi-function shared services operations are led by senior executives with multi-function experience.
  
  
• Common governance model: Given hybrid operating models, a single governance structure is essential.

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