Posts Tagged ‘Shared Services’
The Taulia webinar took place this week and the content was remarkable.
What is so apparent is that multi nationals are currently in a unique position. Consider the following:
Context
The world economy is slowing down.
The Bank of England interest rate has remained at 0.5% for 34 months in a row. Markets now forecast the increase to come in 2014.
Safe havens for financial investments have become ‘volatile’.
Banks are not lending to small businesses and UK banks are expected to miss their small business lending targets in 2012.
What does this mean for large corporations?
Multi nationals are withdrawing investments from markets now considered ‘volatile’.
This means large corporations are sitting on the highest levels of cash on record. A Deloitte report talked of UK non financial companies holding cash reserves of £731.4 billion in the 3rd quarter of 2011.
In this report a third of the 136 large companies interviewed said they were ‘holding on’ to the cash as insurance against unknowns, like the Iranian blockade of oil supplies.
According to the Federal Reserve, in the US corporate cash balances have reached $2.12 trillion (an increase of 33% from 2009).
What does this mean for suppliers?
Financing costs. Because banks are lending to SMEs at either high rates or not at all, it puts a typical SME requiring capital in a position of need.
This is why dynamic discounting is becoming a huge topic. And interestingly it’s becoming a huge opportunity for those shared services organisations that can actually process and pay invoices quickly.
If you have a process in place where you can approve and post an invoice within a few days, pay early and take a 2.25% discount, you would be reaping huge reward for having an efficient process.
In financial terms, investing your cash in your supply chain is low risk (you placed the order with them, and you’re going to be paying the invoice… so it’s low risk), and the return is higher than sitting in a ‘high interest’ bank account.
To put it crudely, getting on with dynamic discounting a ‘no brainer’.
Business cases for any project concerning P2P process automation should be factoring in supply chain financing returns as this is what these projects enable. This in itself should accelerate the speed of getting this automation project done.
The opportunity is golden. But jump on it now – the influencing factors may look very different in 24 months time.
To watch the Taulia webinar, click here
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What role can exceptional process management play in setting up and running shared services effectively?
Posted on: February 15, 2012
How does one go about merging three local back-office departments together into one centralised shared services? How can your newly established shared service operation then prove that they are delivering on all that has been promised? The answer lies in process management. Let me explain.
As part of their finance shared services transformation, BAE Systems had this very task. They wanted to reduce costs, improve financial control and compliance, and enable continuous improvement of their service delivery. Faced with downsizing at times, their finance shared services delivery needed to be run as efficiently as possible.
If three locations were going to be merged into one, there was a real need for one single consistent format to be used at the newly merged site. Staff tried MS Word and Excel previously for documenting their processes. As you would expect though, with the complexities of handling 280 processes and over 300 work instructions, these very user-unfriendly formats caused a huge reluctance for staff to be involved in process governance, in turn leading to difficulties in keeping user control. So what changed?
BAE Systems implemented a How2 tool from Nimbus Partners, part of TIBCO, to document all their processes. All language barriers and terminology differences between the three sites were agreed into one single language. Now BAE Systems’ finance shared services can demonstrate that they are in control and on top of things. With all processes documented, staff can demonstrate compliance with their finance policy manual. Everyone in a process uses the How2 tool so it is continuously updated and decisions can be much more informed.
The tool is very simple. It allows you to storyboard a process, showing the finance shared services customers and back-office staff what to do to complete each step. Task lists, i.e. what the shared service operation sells to their business units, are all now automated (previously a long A3 sheet was passed around). This gives instant visibility and proof that tasks have been done.
In essence, process management leads to service excellence – the BAE Systems How2 tool provides a great framework to achieve this. So what three things have a process management tool like the Nimbus one brought BAE Systems?
- A single repository of all knowledge of service provided by the SSO;
- Three different locations speaking the same language;
- A platform for further change.
To hear more about the speed in capturing BAE Systems’ process in detail and implementing the process management system, and hear how process management enabled their finance shared services transformation, see this video: http://www.nimbuspartners.com/nimbus-tv/clients/bae-systems
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Welcoming several industry solution providers this month (and how we really do care)
Posted on: February 1, 2012
We have had a great start to 2012 in signing many key industry solution providers to support our events and webinars through sponsorship this month. We welcome all these companies who are helping to drive the most relevant information we provide to our members:
- Ariba
- Avid Exchange
- BancTec
- Certipost
- Fundtech
- Invest in Lithuania
- Invest Northern Ireland
- Khazanah Nasional Berhad
- Lavante
- OB10
- Pagero AB
- Readsoft
- Syncada
One thing we are now doing more of is gaining a much deeper understanding of our sponsors’ product offerings, via being given full product demos. This really helps us to precisely understand the key purpose and importance of all the unique points of their solution. We can then covey these to our members in a langauage they understand through our conferences, webinars, blogs and articles. And for our solution providers, this enables us to better educate the market in a way that really connects with (and is helpful to) prospects.
Here are a couple of videos of happy customers from our last US event that I think reflect the inescapable fact that we really do care:
http://www.youtube.com/watch?v=dcVj4Qk3K9g&feature=youtu.be (Lavante)
http://www.youtube.com/watch?v=05UuivV1GG4&feature=youtu.be (XT Global)
A great start to 2012, but I predict a rumbling snowball of support in the coming months. Watch this space!
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12 questions to ask yourself on the how, why and what of your service level agreements
Posted on: January 17, 2012
In preparation for our Shared Services Leaders Summit in March (8 weeks to go by the way) I am having lengthy and detailed calls with all our speakers. This is the best bit of my job. It’s the time when they tell me the number one challenge they faced, and how they managed to get past it. It’s when I find out what people are doing to problem-solve. It’s goose-bumpingly brilliant.
I have just had a call with one speaker about SLAs. He has been instrumental in two shared services. And the SLA had a very different role in both. Mainly because of the culture of the organisation.
We were talking about the best shape that his story should take and we found ourselves getting quite philosophical about SLAs.
What do I mean? Well, we typically find ourselves asking ‘big’ questions about big organisational components, like shared services. But as we move down into the mechanics of what a shared services needs in order to move, our ‘big’ questions are asked less and less. And I question the sense of this.
So we decided to go for opening the presentation with ‘what does an SLA mean to you?’. This was followed with, ‘what is the intention of your SLA?’. These questions opened up a flood gate I wasn’t quite prepared for and I found myself firing one question after another at this unsuspecting speaker. Here are some that we both brought up and that will be addressed during his session in March:
- What’s the intention and role of your SLA?
- Why bother – what would happen if we didn’t have it?
- What would the most amazing SLA actually achieve – what would that world look like and do we actually need an SLA to get there?
- Who is the SLA protecting, if anyone? Why do they need protecting? Is it just papering over another problem (should they need ‘protecting’?)
- Can we give it another name – the term SLA doesn’t guarantee heightened engagement and sounds a little dry?
- Is your SLA legal – if so to what degree and if there are penalties how will you enforce them?Who is going to make up the SLA police?
- Is it in the spirit of customer-supplier or partner-partner? What does your SLA say about your relationship with your customer?
- What needs to be in it and how long does it need to be? Is it a two-sider or does it compete with the national phone book?
- Who needs to be involved in the SLA creation and SLA governance?
- How do you want it to be used? Referred to daily or stuck in a drawer?
- How ‘work in progress’ should it be? Ie is it really a working document or is the final version ‘signed off’ for another year?
- What is your company’s perception of your current SLA and does that perception fit?
We put so much importance on our SLAs. We just need to make sure their starting point is spot on. And that starting point starts with some fairly sizeable questions.
Join me for the full session on SLAs and how they can change your world at European Summit for Leaders in Finance Shared Services
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I have just been speaking with a contact at Merck. When they set up their shared services centre six years ago, they looked at countries in Central Europe as possible candidates. But in the end they decided on Germany as their location of choice. The reason being they were intent on their SSC quickly developing from a transactional based operation to a value adding service provider. They wanted to ensure that the skills, expertise, business knowledge and languages provided would support these aims.
Other companies in Germany seem to be following this trend too: Boehringer Ingelheim has its HQ in Ingelheim. When they decided to set up their shared services centre, they chose to locate it close to the HQ. A chemicals company that has a shared services presence in Germany and Spain is clawing back some activities from the Spanish operation into the German one. And finally BASF set up its huge shared services centre in Berlin.
I asked my contact if there were tax incentives offered by the German government. The answer was no.
In his opinion the reason was that, as there is a trend for shared services to climb the value chain, so there seems to be more of a business case to keep or establish a shared services operation closer to the business. If much of the transactional piece is automated then there is almost no need to examine off shore countries as a location for your transactional piece.
The VP Global Head Financial Shared Services will be presenting on location choices and influencing factors at the European Summit for Leaders in Finances Shared Services and Outsourcing, London, March 2012.
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Check out this new research report by Accenture: Trends in Shared Services (Unlocking The Full Potential)
Posted on: October 6, 2011
Hi everyone
I just thought I’d share with you this recent research report published by Accenture discussing the latest trends for maturing your shared services. It’s packed with useful survey data so you can benchmark where you are relatively to others. Chapters include:
- Process Excellence
- Service Excellence
- Continuous Improvement and Value Marketing
- Integrated Business Services
- New Technologies Impacting a Mature Business Model
- The Future of Shared Services
To download it, please visit: http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Trends-in-Shared-Services.pdf
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I was speaking to one global shared services director this week about their top challenge at the moment. They mentioned interestingly that their strategy was first to establish quality in their service delivery, with cost reduction a secondary priority. This lead to their shared services being set up in high cost European and American locations. After running a shared services operation for five years, their customers certainly now recognise the quality in their service delivery. But as with any business, priorities change…
Now this global shared service leader has been tasked by their CFO with meeting ambitious cost reduction targets. This might not be such a surprise, but, they also must maintain their very high service quality levels at the same time. Is this even possible? We’ve all heard the phrase ‘doing more with less’, but with such a strong reliance on the advantages of having a high cost location, such as highly skilled staff with high levels of automation, what routes would you take in this position? It seems like a dilemma, but there may be several options.
Automation of transactional activities can free up staff which is a significant cost. Process mapping also identifies inefficiencies in all your SSO’s processes which can generate year-on-year savings – this can be extended into more formal continuous improvement programmes such as Lean Six Sigma. But I guess when all these options have been exhausted, or even before, ‘quality’ service delivery is often defined by how happy your customers are. Setting up a regular review of what your shared services customers want and communicating what you can deliver keeps your finger on the pulse of your customers’ needs and ensures no precious resource is wasted on not delivering quality.
Vodafone’s shared services centre in Budapest has created a menu of service provision to make sure their business units know capabilities and shared services staff know what their customers top priorities are, leading to increased customer satisfaction even when budgets may become tighter. They shared secrets on how this was set up at our last European Summit on Finance Shared Services and Outsourcing in March. Some good advice that may help you, anonymous global shared services leader (and others in this position), is to listen to our webinar ‘The three secrets to delighting your shared services customers’ – there are some real gems to help you with your new priority.
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Those of you with eagle eyes will have spotted a small but significant change on the sharedserviceslink.com website yesterday. After two years in the bustle of the City next to the wonderful Spitalfields market, we’ve relocated to new and bigger offices a short step away in Clerkenwell.
With more space to breathe and grow, we have big plans for the rest of the year, some of which you may have already heard about – the programme for our first North American event will be out soon. You will hear more about others in the coming months. We’re very excited to have three people join the team next week and we’re on the look out for more – should you be seeking fresh opportunities and challenges, there are more details on the website.
For now, we’re settling into our new space and enjoying the views while we also get ready for our appearance at Fusion 2011 in Orlando, Florida next week, and our SAP Control for VAT Compliance conference in London.
Thankfully, we’ve already sourced the best coffee in the area at Caravan. If you’re nearby, pop in to say hello and we may well treat you to a cappuccino.
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Hewlett Packard is the world’s largest technology company. Not only does it sell IT hardware and related services, but it also lives and breathes the benefits. And its finance function is no exception.
Through its hugely successful e-invoicing programme, it has converted 1.8m of its invoices to electronic. Speaking on our latest sharedserviceslink.com webinar, Peter Downie, Global Invoice Automation Lead at HP, revealed how the company has managed to deliver such impressive results.
A shared-services pioneer, HP first embraced centralisation in 1990. Since then it has stormed ahead in its adoption and implementation of automation technologies. By 2000, the company already received 30% of its invoices via EDI and knew that e-invoicing would help bring more of its suppliers on board.
HP’s drivers were process efficiency, standardisation and cost savings, but it also pursued more intangible benefits, such as greater auditability, business intelligence and improved cash management.
Partnering with e-invoicing network, OB10, HP’s goal was to convert 80% of its entire manual invoice population to electronic through a fully tax compliant, global solution that was viable for all its suppliers.
With these objectives pretty much ticked off, Peter is focusing his attention on the resisting one hundreds (the suppliers who won’t convert), developing a portal that offers self-help tools, and embracing the benefits of dynamic discounting.
When asked to share his top-three strategies for success, he highlighted:
- Understand your stakeholder framework; finance and procurement must work together hand in hand
- Focus on economies of scale
- Maintain ongoing programme management to support supplier enrolment, manage service providers and stakeholders, and process improvement.
Watch a recording of the webinar on the sharedserviceslink.com website.
Peter Downie is also speaking at e-Invoicing Europe 2011 in London in July.
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We’ve just hit 500 members on our sharedserviceslink.com LinkedIn group!
We are proud of the people we’ve attacted to this group so thank you if you’re a member and do join if you’ve yet to.
This milestone also promtps me to ask, how do you like to interact with your peers in a virtual community such as ours?
It’s here for you to make the most of.
Do you have a question you’re struggling with? What’s front of mind at the moment? How do you usually find answers to these questions?
The collective knowledge within our group is incredibly powerful, so why not log into LinkedIn and ask your finance shared services peers for their thoughts? I’m pretty sure somebody out there will have, if not an answer, at least some useful pointers.
And if nobody has responded to your question within a few days, we commit to stepping in to help you get closer to an answer (I’ve just reassured the team that we’re not going to be overwhelmed with posts – I’d love for you to prove me wrong!).
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