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Shared services organizations have become well established as a lever to reduce costs, promote efficiencies and, ultimately, achieve high performance.
New research from Accenture finds, however, that private and public sector organizations may not have realized the full benefits of shared services. Accenture presents the research and identifies five topics for continued success and sustainability.
Expectations of the shared services model are high, and they should be. For over two decades, shared services organizations have enjoyed the benefits of cost savings, efficiencies and better service that shared services masters have heralded.
But Accenture experience and research finds that many private and public sector organizations that are enjoying the initial benefits have only scratched the surface of what is possible with shared services; they have yet to use shared services to contribute significantly to the enterprise’s overall strategic objectives, such as growth, global expansion and competitiveness.
This year, Accenture undertook a research survey and a series of interviews with shared services leaders to delve deeper into the trends most likely to affect our clients’ operations, and to provide some insight into what they will need to focus on to excel in the future.
Accenture engaged an independent market research company to conduct telephone surveys with over 100 individuals in 16 countries during April 2011. Over 50 percent of the organizations had annual revenues greater than $5 billion. In addition, 50 percent of the entities have had shared services organizations operational for three to five years.
Although the titles varied, all respondents had charge of the management of shared services in their organization. In addition, Accenture personally conducted a series of in-depth interviews from June to July 2011 with a select group of shared services leaders.
Levels of standardization vary widely. For example, only 49 percent report standard policies, processes and supporting systems.
Process ownership remains problematic: although 78 percent define processes globally, 48 percent still implement locally.
Ninety-two percent have already implemented call scripts, and 33 percent claim to have automated all call scripts.
Forty-two percent of respondents spent 10 percent or more of the annual operating budget on continuous improvement initiatives.
Approximately one in four have established a formalized Lean Six Sigma/Kaizen approach.
IT is the service most delivered through shared services (75 percent), with finance at 58 percent, client-facing services like billing at 51 percent and HR at 50 percent.
Shared services organizations are less likely now to report to a functional leader (41 percent) than they are to C-level leadership (59 percent).
Eighty percent of respondents already propose flexible working arrangements.
Cloud computing is expected to be the technology advance with the greatest effect on shared services (42 percent).
Our research points to five topics on the agenda for continued success and sustainability.
Process excellence: Many shared services organizations continue to struggle with the fundamentals of process excellence; those that excel have put process excellence into the context of overall business optimization. As part of these efforts, they are making dramatic improvements in efficiency and earning new respect in their organizations.
Service excellence: Shared services organizations seeking to achieve high performance recognize that, despite continued advances in functionality, they must ready their service management framework (the “system around the system”) to meet the demands of a more strategic role.
Continuous improvement and value marketing: Shared services organizations that have achieved high performance continue to look for ways to improve—both in services they currently provide and in new services they would like to offer. Moreover, they recognize that marketing the value they bring to their key stakeholders is critical to building the trust that leads to new business opportunities for their organizations.
Integrated business services: As shared services continue to mature, we find that those looking for new levels of business value are becoming independent, end-to-end services businesses with C-level leadership and strategic importance on par with other operating units.
New technologies affecting a mature model: Cloud computing and social media are top technologies on the minds of shared services executives, but they are proceeding with caution. Their enthusiasm is tempered by uncertainty about potential business disruption after they have worked so hard to stabilize their operations.
Shared services has come a long way and we believe changes of similar scale are on the horizon. The future shared services model will look very different than it does today. For example, in line with the growing prominence of the hub-and-spoke model of integrated business services, we may see more rather than fewer shared services nodes in the network. Shared services may even become ubiquitous as organizations begin to see that those that expand shared services’ scope and strategic value through integrated business services leapfrog ahead of their competition.
Regional nodes will be smaller than we have seen traditionally, closer to their customers and more skill-based. They will accommodate time zones, languages and regulations, while working seamlessly with hubs providing routine and procedure-driven activities (which can now be located anywhere, thanks to technology and “the cloud”). For some, this future view is already a reality in the making, with shared services becoming a platform for new heights of organizational performance.
September 26, 2011
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