maximizing value of shared services

Maximizing the Value of Shared Services

Shared Services and Outsourcing Week 2011

Jessica Golden, Principal

Mark Klender, Principal

Deloitte Consulting LLP

March 2, 2011

- 2 -

Introduction

Survey results:

�Geography

�Operations

�Organization

�Scope

� Journey and value

Q&A

Agenda

Introduction

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� This year’s survey attracted 270 participants from around

the globe and provided data for 718 Shared Services

Centers globally

Survey participants

Source: 2011 Deloitte Shared Services Survey

Industries of organizations

surveyed

Annual revenues of

organizations surveyed

Geography

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� There has been a shift in the location of established

markets for Shared Services over the last ten years

�More mature centers indicated that they serve more

geographies than newer centers

Geography

Top five locations by

maturity of center

Geographies served by

Shared Services centers


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Future Direction

� 38% of respondents indicate plans to relocate SSCs

� Labor factors were the most important drivers for relocation

� 72% of those with plans to relocate would likely select a

more established location versus a pioneering one


What locations are you considering for relocation?

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�Shared Services is increasing its reach into the “middle market”

�Organizations are migrating from decentralized SSC delivery, to regional

centers, to a global hub & spoke model

�Labor factors continue to drive location selection for SSCs – quality,

availability, and language skills – while cost stays top of mind

�Numerous factors are driving organizations to adjust where their centers

are located and how many centers they operate

�There is increased focus on Latin America and Asia – both for regional

centers and lower cost alternatives – for serving the Americas and

Western Europe

Key insights regarding geography

Operations

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� 77% of companies mandate use of Shared Services

� The top reasons to opt out of Shared Services include

the inability to support the business unit and poor

responsiveness

Operations

Reasons business units/segments

opt in to Shared Services

Business units/segments served by

a Shared Services center


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�Organizations used a variety of motivators to attract and

retain talent including an appealing work environment,

advancement opportunities, and financial rewards

�Organizations which experienced difficulty recruiting and

retaining management staff has increased by 23% since

2009

Talent

People-related challenges


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� For companies that make Shared Services an “opt in” strategy, cost

reduction is table stakes

� Organizations continue to focus on leveraging new technologies to

improve center operations and improve customer service – with a focus

on improving interaction with their customers

� As centers mature, Shared Services ability to anticipate business unit

needs increases in importance

� Organizations that do not focus on creating strong morale and an

appealing culture struggle with retention and productivity

Key insights regarding operations

Organization

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�As companies move from single to multi-functional Shared

Services, the reporting relationship shifts to either an

independent Shared Services organization or geographic

leadership

Organization

Reporting relationship for Shared

Services with a single process area

Reporting relationship for Shared

Services with multiple process areas


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Standardization

Areas where companies drive

consistency across Shared Services

Centers

� There continues to be a

focus on driving

consistency across SSCs

in numerous areas

� 50% or more of the

processes for

respondents’ SSCs are

standardized for all

customers


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� As organizations increase their portfolio of offerings and geographies

served, reporting relationship shifts away from function

� As organizations pursue global delivery, governance becomes

increasingly important

� There is no one right way to approach chargeback mechanisms, but

clarity in calculation is a must in managing successful relationships

� SSCs are not only increasing their relationship management strategies

but also putting accountability back on the business units to remain

connected

� Organizations are missing the opportunity for incremental savings if they

do not include tax considerations in their overall business case

Key insights regarding organization

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�Since 2003, Finance has remained the #1 process area

most common in Shared Services

�As Shared Services organizations mature, nontraditional

process areas, such as Sales/Marketing, Real Estate/

Facilities, and Legal continue to grow

Scope

Process areas in your Shared

Services organization


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� 47% of the SSCs represented in the survey have more than

one process area in their center

� The more mature a center, the higher number of process

areas performed

Function

Number of process areas in your

SSC

Average number of process areas in

SSCs by maturity


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Key insights regarding scope�SSCs continue to expand into new functions such as Real Estate, Sales

& Marketing, and Legal

�Many SSCs are migrating mature transactional processes offshore to

enable them to take on more advisory process areas

�Multi-functional centers now account for nearly half of all SSCs, with

more established centers having an average of 2.4 functions per center

�Organizations are using a portfolio approach of Shared Services and

Outsourcing to optimize their service delivery model

Journey and value

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�Consistent with previous surveys, the most popular

approach to implementing SSCs is to move processes prior

to standardization and technology changes

Journey

Timing of

technology change

Timing of process

standardization


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�Since 2003, people/change related areas continue to be the

most underestimated aspects of implementation

Level of effort

Aspects with underestimated level of

effort during an SSC implementation


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Value

�At least 50% of respondents indicated that they had

achieved their Shared Services objectives across most

areas

Technology Automation

Technology

Standardization

Headcount Reduction

Time to Implement

# of Processes in Scope

Type of Processes in

Scope

# of Locations Served

50% 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50%

Short of Meeting Objectives Exceeded Objectives


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Key insights regarding journey and value

�Regardless of the approach, organizations are delivering year over year

incremental value to their bottom line through Shared Services

�Organizations continue to underestimate critical elements of the Shared

Services journey required for success

�Organizations are recognizing that benefits other than cost reduction,

such as controls, data visibility and a platform for growth, are just as

valuable

�To maximize the value of your Shared Services initiative, the power of

the organization’s culture cannot be underestimated or ignored

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Contact Information

Jessica Golden

Principal, Deloitte Consulting LLP

New York

+1 212-618-4663

[email protected]

Mark Klender

Principal, Deloitte Consulting LLP

San Francisco

+1 415-783-4087

[email protected]

maximizing value of shared services

Business

reporting

shared services

process areas

cost reduction

key insights

geographies

sscs

center