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Financial Shared services and aligning it to Business Objectives
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Why is there a need for Financial Services?
Why is there a need for Financial Services?
What do we do?What do we do?
How do we implement?How do we implement?
What are the benefits & risks involved?What are the benefits & risks involved?
Why is there a need for Financial Services?
Why is there a need for Financial Services?
What do we do?What do we do?
How do we implement?How do we implement?
What are the benefits & risks involved?What are the benefits & risks involved?
Open & hidden objectivesOpen & hidden objectives
FSS role in StrategyFSS role in Strategy
Themes of Shared ServiceThemes of Shared Service
Principles
Corporate
ObjectiveFSS Role
& Objectives
Structure
Resources
Leadership
Person
Striking a
balance
Striking a
balance
Facing Structural complexity
Leads to
C O
M P
L E
XI T
I E
S
Results
Difficult to achieve growth aspirations
New Markets
DecentralizedDecentralized
Acquisitions
Why is there a need for Financial Services?
Why is there a need for Financial Services?
What do we do?What do we do?
How do we implement?How do we implement?
What are the benefits & risks involved?What are the benefits & risks involved?
What we doWhat we do
FSS ObjectivesFSS Objectives
Alignment: Service StructureAlignment: Service Structure
• Financial analysis for M&A• Receivables and Payables• Tax & Accounting• Financial Reporting• Currency conversion hedging• Budgeting & Forecasting• Treasury services
Cost reduction, Efficiency, Agility, Fast Copy
Consistency, Analysis, Value creation, customization
Process improvement, service innovation, secondary KPIs, internal customers
Direct Business Impact, primary KPIs, external customers
Direct Business Impact, primary KPIs, external customers
AP, General Ledger, B/S analysis, Accounting, Fixed Assets, AR, Facilities
Budgeting, Reporting, Financial Analysis, Forecasting, Tax, Legal, Treasury
Systems, Standardize, Benchmarking, ERP, Streamlining, Automation, Governance
Market Leadership, Competitive Differentiation, Business model, M&A, CSI
Corporate Center
Financial Shared Services
One Internal Customer
One Internal Customer
Multiple Internal
Customers
Multiple Internal
Customers
External & Internal
Customers
External & Internal
Customers
In-sourcing
Co-sourcing
Joint-Venture
BPO
Why is there a need for Financial Services?
Why is there a need for Financial Services?
What do we do?What do we do?
How do we implement?How do we implement?
What are the benefits & risks involved?What are the benefits & risks involved?
Evolution of FSSEvolution of FSS
Think Global Act Global + LocalThink Global Act Global + Local
Fundamentals of SuccessFundamentals of Success
Source: Bramante, Jim, Gregor Pillen and Doug Simpson. “CFO Survey: Current state and future direction.” IBM Global Business Services
Build in balance – Implement a three-tiered organizational model for Finance that is specifically designed to provide both stability and flexibility
Source: IBM Institute for Business Value analysis
“We’ve seen that a global approach to internal standard-setting is the best way to optimize the cost/benefit point of a given sub-process activity…Clearly there are real differences between countries, but prior to standardization, the global process owner engages with the local finance management team and explains the benefits of coming onto the common practice... The process owner decides which concerns are unfounded and which are valid.”
– Global Accounts Payable and Asset Accounting, Executive, Global Technology and Service Firm
1. Develop Service Level Agreements, KPIs and Operating Level Agreements
2. Choose Leaders Wisely3. Benchmark, Benchmark and then
Benchmark Again4. Determine the Appropriate
Implementation Approach
Implementation of shared services typically introduces a wide range of benefitsto the company, to name just a few:Cost savings through consolidation, standardisation and process redesignService improvement, increased control through increased transparency and VisibilityTimely response to resolving problems, resulting in improved service levels and customer relationshipsAbility to focus on core business objectives and competencies
Corporate Objectives
FSS-level BSC
CustomerWho do we define as our
customer?How do we create value
for our customer?
CustomerWho do we define as our
customer?How do we create value
for our customer?
Employee Learning and
GrowthHow do we enable
ourselves to grow and change while meeting
ongoing customer needs
Employee Learning and
GrowthHow do we enable
ourselves to grow and change while meeting
ongoing customer needs
Internal Process
To satisfy customers while meeting
budgetary constraints, at what business processes
must we excel?
Internal Process
To satisfy customers while meeting
budgetary constraints, at what business processes
must we excel?
FinancialHow do we add
value for customers while
controlling costs?
FinancialHow do we add
value for customers while
controlling costs?
FSS Strategy
Why is there a need for Financial Services?
Why is there a need for Financial Services?
What do we do?What do we do?
How do we implement?How do we implement?
What are the benefits & risks involved?
What are the benefits & risks involved?
Notes, Problems, Issues
• IBM institute for Business Value• Blog of Kenny Ong, CNI• Other websites for secondary
research
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