How to Drive More Value from Financial Shared Services? Focus on the Customer
If your financial shared services have been up and running for a while, it is time to revisit your strategy.  Your business is changing and the so are the needs of your internal customers. Cost efficiency and operational stability will continue to be fundamental requirements, but if you have been focused primarily on shared services execution, you are missing the opportunity to do more.

What else can you expect from your shared services organization?
While the efficiency gains impressed everyone when you first implemented shared services, the romance has worn off. Once again there is pressure to further reduce costs and demand for more services. Unfortunately, too many shared services organizations are pursuing less effective strategies to drive value - cost reduction, expansion up the value chain, and extension into other functions - we think there’s a better way. 

If you want to be more valuable and relevant, add more value to the functions and services you already provide. All of the company’s day-to-day transaction and process data that are funnelling into the shared service center represents potential insight. This insight can help you drive costs out of the processes that extend beyond the walls of the service center. It can also help your customers improve cash flow, reduce operating costs and drive true business value.

What more can you expect from a financial shared services organization? How about millions of dollars of concrete opportunities to provide value for internal customers?

Not just data: a window into the business
As the keeper of the backend, the service center has visibility into multiple business units in the company. An AP person sitting in the shared service center has visibility into all of the transactions and other activities that feed the backend and the context to analyze the impact for each business unit. 

The backend is only the tip of the iceberg. The portion of the financial processes that come through a financial shared service center typically represents only 40% of the entire process.  If the backend of one unit’s activities are twice as inefficient as another’s, chances are there are opportunities for improvements throughout that unit’s processes. Understanding those opportunities could have a significant impact, not only on the shared services center but also on the business unit’s costs.

Unlock the insights from the data and processes you already control
This is the single best, most overlooked opportunity for deriving more value from shared services. The key is to focus on the customer and to establish communication and feedback mechanisms. Your aim is to better understand their problems and needs and better understand how the data you have can bring value to them.
You also have the opportunity for conversations with your customer about how their activities and service demands affect costs and how they might modify their processes to receive better service or lower costs. 

Becoming customer-centric has real benefits:

• Improved business unit financials: Analysis of backend data can highlight opportunities to improve cash flow, for example, extending average days payable to be in line with others in the company can result in improved cash flow.
• Improved business unit operations: Those same inefficient processes and activities that are costly to the shared services center are also usually costly throughout the rest of the business process. Internal customers are more likely to change their processes if they stand to gain savings in the 60% of the process that they do control.
• Improved Shared Service Center operations: Rework, errors, and expedites cost the service center more effort, but the cost is rarely passed on to the internal customer. Very few shared service organizations understand how their costs differ for different activities; fewer still allocate costs to the customer based on consumption. With this level of understanding, you gain the ability to influence costs that start beyond your four walls.

The Opportunity You Already Own
It’s too easy to get tunnel vision with service center operating costs. Without making a concerted effort to become customer-centric you get further from understanding the customer. You don’t build data analysis capabilities or you outsource to reduce operating costs, and pretty soon that wealth of data moving through the shared service center has lost all relevance to the business. A golden opportunity is missed.

Think the savings are too small for the business to care about? The opportunities for your business customers typically add up to more than nickels and dimes.

Think you don’t have the systems and tools in place to fill this role? The potential value is enough to justify making investments.

Think you don’t have the influence to change your business partners? Begin, now, to develop the analytic capabilities in the services center and to understand the true service center costs and you will be in a better position to bring value to your partners. In advance of that, open up the relationship and begin listening. You might be surprised by the result.