Globally, the world of Shared Services has become sexy. Over the last decade with more automation, data analytics and global alignment there is real, measurable impacts to the bottom line.
That begs the question: Are Australian companies really managing their shared services in a way that gets some of this action? In short – no, not yet according to key reports and statistics gathered by the Shared Services Outsourcing Network (SSON) which informs this blog. Their indicators validate my experiences with clients in the Accounts Receivable and Payables space.
What are the current key Shared Services?
Around the world, Finance and Accounting still dominate, but key changes are in the growth of HR and Procurement services. This is true for Australia. Interestingly, around the globe there is growth in sales, customer service and marketing processes, which shifts the focus of shared services to being potential revenue generators. Australia is still developing here.
How do Shared Services contribute to the organisation?
The biggest contribution is still in gaining efficiencies through streamlining processes and reducing cost. This is where Australian companies do see the impact but less than 40% of executives don’t have a process improvement or optimisation methodology in place. Shared Services also play in the value-add contribution space by providing database intelligence (using the data internally to be predictive and guide strategic decisions). Only 10% of Australian executives have a formal business intelligence strategy in place.
What models are used?
The SSON survey in 2014 quotes a significant current and planned move to Global Business Services (GBS) and reports that Australia is in its infancy here. Another statistic that sheds light on the infancy story is that 50% of Australian executives still report into a functional head.
Then there is the tussle between whether to keep things in house or to go for a hybrid model involving outsourcing. With concerns over control and customer focus, around 67% are captive, in house models with hybrid models covering 33% internationally. By and large I observe the same trends with local clients: more in house with smaller tests in the offshoring capabilities of India and Manila, largely due to fears of losing control and concerns over quality.
For Australian firms, whether it is a move to GBS, a captive or a hybrid model (leveraging the BPO sector), it means a large-scale internal transformation to realise the benefits of a Shared Services function that is truly aligned to the business. Ultimately this involves agile people and organisational culture initiatives and if offshore, in-roads into establishing cross-cultural high performance from the get-go, not when cracks start to appear.
Hope this gives you some insight to review how your shared services stacks up.
Div Pillay will be running a Master Class at the SSO Week Conference on the 9th June 2015; entitled, “Strategies for Increasing the Performance of Offshore Partnerships”. Click here for more info.
Div Pillay is the Founder and Director of MindTribes Pty Ltd, a firm that specialises in optimising outsourcing from a people perspective. When working in the offshore space, her specialised services in cross-cultural performance are highly regarded and unique. She levers best practices in talent acquisition, knowledge transfer, KPI and leadership to transform shared service operations.