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SSCs Treading Water How to avoid SSC stagnation
Rapid evolution of Shared Services
Shared Service centers treading water | Webinar 2
Shared Service Center maturity scale
Level 1
Level 2
Level 3
Level 4
Level 5
FRAGMENTED
SUB-SCALED
SCALED
INTEGRATED
STRATEGIC
• Decentralized• Supply driven
• Consolidated• Economies of
scale• Single function
• Multi-functional• Variation in
processes and technology
• Delivery driven
• Enterprise-wide• Specialist service• Coordinated
processes, technology, governance
• Transaction focused
• Demand driven
• Multi-functional• Multi-channel• End-to-End sync• Mix of trans-
actional, BI and analytic services
• Outcome oriented
Source (partly) KPMG 2015First generation 2nd generation
1980
1990
20002010
2020
3
Many Shared Services fall into stagnationNot living up the expectations of businesses for performance improvement
• Strong performance after early challenges
• Disappointment when not exploiting continuous improvement & expansion
• Distancing from business happens
• Businesses no longer see value
Source (partly) EY 2013.
1st generation SSC deployment Evolution to 2nd generation SSC
Possible target SSC
Optimization
Stabilization
Transition
Time
Perf
orm
ance
leve
l
Stagnation!
InnovativeDevelopment
Business Partnership
Shared Service centers treading water | Webinar
4
Warning Signs for StagnationAssess your SSC – some test examples
High performerPotential
1. Efficiency
2. Technology
3. Expansion
4. Satisfaction
5. Governance
6. Organization
Low performer
High staff turnoverKey people dependencies
Motivated employeesAttractive employer with
multifaceted career options
Weak quality in KPIsIrregular information sharingLack of controls
Performance drivenClose collaboration with
businesses (development)
Declining client satisfactionNo SSC contract renewalsDistance to businesses
Regular satisfaction surveysDemand driven service
Business understanding
Not managing to motivate all businesses to utilizeNot growing
Dynamic offering, new servicesMulti-functional
Joint development & innovation
Multiple platformsTools not harmonizedLack of innovation
Modern technology deployed% of peopleless processes
increasing
Productivity improvement stoppedPoor business case
Continuous Opportunity spotting
Innovation laboratory
Shared Service centers treading water | Webinar
5
Exploit right mix of technology
Get the basics right – One platform, Global tools & processes
Cloud-based – Quick, Agile, Non capital-intensive, Fixed costs to variables
Digital – Paperless, Transparent, Mobile, On-time
Robotics power – Increase activity turnover time, quality & controls
Artificial intelligence – Text interpretation, judgement based
Data analytics – Machine learning, Efficient controls
Rescue #1 Automate
Shared Service centers treading water | Webinar
05/02/2023 6
Rescue #2: RelocateAutomation is the new name for relocation
In the past relocation meant…
Location Savings Payback
North Europe
East Europe
10-30%
30-50%
40-60%
>12m
9-12m
9-12m
Cultural fit, language,Strong ownershipLow attrition
Quality, Competence, languages, high work morale
Volume, Open 24-7, discipline Asia
Advantages
Rescue #2 Relocate
Shared Service centers treading water | Webinar
Optimized mix of capabilities
Local services, ”onshore”
Center of Excellence(on/near/offshore)
Peopless processes, ”No-shore”
50%+ saving. Payback <9 months
What relocation today means…
Focus on competence & quality !
Partners
05/02/2023 7
Rescue #3 EvolveNo longer a transaction factory
2-way model: Go GBS and / or Climb up on the value chain
Functional Back office– Standardized, lean, transactional focus
Global Business services– Wide horizontal scope of transactions
Business Partner– Specialized business intelligence & partnership
Global Value partner– Multi-functional business intelligence
Service scope width
Serv
ice
com
plex
ity
Shared Service centers treading water | Webinar
05/02/2023 8
ExamplesHow some companies have escaped stagnation
OpusCapita customer examples
Shared Service centers treading water | Webinar
€2 billion leading logistics operator
• ISSUE: Payroll service development stagnated since several years
• SOLUTION: New technology / RPA introduced• RESULT: New mind-set & customer centric
Significant productivity improvement New level of quality Experts focusing on customer More time for value adding activity Continuous improvement ensured by
training staff to identify more RPA opportunity
€350 million real estate business
• ISSUE: SSC development had reached end of roadmap, quick wins collected, next development would have a long pay-back. Limited relocation possibilities.
• SOLUTION: e2e process automation in P2P • RESULT: Better process turnaround time,
efficiencies through technology & relocation
€700 million service provider
• ISSUE: Unclear SSC strategy, implementation stagnated
• SOLUTION: Hybrid delivery model established, joint roadmap through a partnership
• RESULT: Fast track to optimized delivery and automated processes.
Introducing us
05/02/2023 9
Juha-Pekka PyhäjokiDirector, Center of Process excellence and Product [email protected]
Heini PensarManager, Product [email protected]
Shared Service centers treading water | Webinar
Upcoming webinars…
Shared Service centers treading water | Webinar 10
24.11 Mitä tarkoittaa tehokas sähköinen arkistointi käytännössä?
26.11 How to release working capital and to tackle the payment term extension challenges by utilizing Supply Chain Finance?
www.opuscapita.com/webinars
