Are you creating a true culture of performance – or just talking about it? When you’re a kid, learning to share can be a tough concept to swallow. But as we get older – and wiser – the benefits of sharing become easier to appreciate. Companies have been going through a similar learning process with the growing implementation of shared services models. Initially, there was plenty of resistance. Sharing ultimately means giving up a lot of control, which is something that a lot of adults – not unlike children – would simply rather not do. But over time, many organizations have come full circle. Not only have they become more comfortable with shared services, but they are now beginning to explore more sophisticated ways of expanding the scope of the shared services model – across geographic lines as well as business functions. Companies are also starting to combine shared services with outsourcing and offshoring strategies. The result is hybrid, multifunctional organizations that have evolved far beyond the initial shared services framework. The shared services concept itself is nothing new. But for years, the main selling point was cost savings. These advantages are fairly obvious. By consolidating things like human resources (HR) and other administrative functions under one roof, it’s easy to squeeze out excess costs by reducing or eliminating overlapping staff and streamlining redundant processes. 
Beyond cost savings
Of course, cost savings are still an important part of the case for shared services. But these savings have become a “dial tone” issue – it’s a no-brainer that must work or else it’s the end of the discussion. As companies explore the opportunities available through shared services, a number of more important strategic advantages have emerged that are driving deeper and more extensive implementation. One of the big benefits is better control; however, this can be somewhat counterintuitive. There’s a tendency to think that moving a process to a shared services center means losing control of what’s going on. But there are some crucial control-related benefits that come along with the centralization and standardization inherent in the shared services structure, even though some functions may no longer be down the hall. Sarbanes-Oxley compliance is one example. Companies with shared services centers often find that they experience fewer headaches when it comes to meeting the additional reporting standards required. When records and databases are concentrated in a handful of locations rather than scattered across the country or around the world, troubleshooting and consolidating information becomes much easier. One accounts receivable department is easier to manage than 300. This comes in especially handy for companies that are involved in a lot of merger and acquisition activity. With a shared services platform in place, it can be easier to close transactions on time – and to realize deal synergies faster. The biggest hidden opportunity in shared services, however, may be the chance for finance to boost its visibility and contribution to value creation within the organization. The functions that can fall under the shared services umbrella come from a diverse range of areas – information technology, HR, etc. But responsibility for shared services centers most often belongs to the chief financialofficer (CFO). In a recent survey, 80 percent of respondents said that shared services report to the CFO.1 
An opportunity for the finance function
That creates a unique opportunity for finance to contribute in a more general managerial sense rather than just accounting and reporting. Shared services centers are also a breeding ground for talent. Often, the most talented people coming out of shared services move into key roles within the business units. It’s yet another chance for finance to play a leading role in a company’s talent management strategy. But first you need to lay the groundwork. The first step in building an effective shared services structure is to figure out what functions need to be kept close to home and which can be moved to a different city, country or continent. In some ways, this is similar to the outsourcing decision process. And remember: The key word here is services. A shared services center that cuts costs won’t do much good if it can’t respond quickly to its customers, i.e., the rest of the organization. The Global Shared Services Study cited above shows that timeliness of response is far and away the most critical factor in achieving desired results. Leadership is the vital ingredient to make it work. There are a lot of benefits to shared services, but getting the structure in place and running smoothly requires a strong leader. Besides the logistical and technical demands, service owners may resist giving up control to a shared services center. For the CFO, that’s a big challenge that can’t be taken lightly. But it’s also a chance for finance to show off the full range of its capabilities. In short, it’s an opportunity for you to shine – and you can’t afford to pass it up. 1 "2007 Global Shared Services Study," © 2006 Deloitte Development LLC Written in association with the Economist Intelligence Unit (EIU)
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