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Case studies in reducing process complexity in G&A and shared services
According to a recent Deloitte benchmarking survey,1 a shared services organisation is an effective tool for better G&A performance. The data shows that the greater the number of transactions supported by shared services, the better: more transactions result in a decrease in the cost of finance processes as a percent of revenue; a decrease in the cost of finance transaction processing as a percent of revenue; and a decrease in the cost of HR as a percent of revenue.
Four types of complexity in G&A functions
- Portfolio complexity: This complexity relates to the number of unique customers, products, promotions, customised billing options, and consumers’ special needs/requests. Portfolio complexity is generally considered “incoming” complexity for G&A functions and can, therefore, only be managed.
- Organisational complexity: This complexity relates to the number of unique business units (BUs), divisions, and departments, as well as their geographic footprint. A complex organisational structure adds layers and interfaces that can slow decision making, obscure responsibilities and accountability, and make G&A service delivery rationalisation difficult.
- Process complexity: This complexity relates to the number of unique inputs to a process and the complexity of the process itself. As complexity grows, so does the number of exceptions to a process, which in turn drives work-arounds, degrading the overall process performance.
- Information infrastructure complexity: This complexity relates to the number of unique applications, specialised systems, outputs and reports, degree of customisation, and the accuracy and standardisation of data. Inaccurate and non-standard data puts a lot of complexity into an operation.