Ask the Pro: Deloitte’s 2013 Global Shared Services Survey
Susan Hogan, principal, Deloitte Consulting LLP
According to this year’s survey results, what changes and trends have shared services leaders seen in the marketplace since the 2011 survey?
Deloitte’s 2013 Global Shared Services survey shows that shared services leaders are realizing that although shared services is a mature concept, there are still many significant opportunities to create value. The next generation of shared services includes moving even higher value processes out of the local businesses, better serving the business, moving work to lower cost geographies, and making a faster leap to multifunctional centers to reap more significant benefits. Additionally, shared services is increasingly positioned as a strategic asset and training ground for high performers in organizations, and analytics is regarded as an important lever to increase the value that shared services provides.
The majority of survey participants plan on continuing to expand the scope of their shared services operations by increasing both transactional and advisory processes in their centers. Yet even today the survey shows that organizations leveraging shared services are moving upwards of half to three quarters of their full time employees (FTEs) to an alternate service delivery model. The top four functions noted to be in shared services (Finance, HR, IT, Procurement) have left less than 30 percent of their FTEs in the local business. Even traditional corporate functions, such as Tax, Real Estate/Facilities, and Legal are moving towards a transactional Shared Services Center (SSC) or outsourced model.
Over the past 10 years, we have seen a significant shift in where organizations are locating their SSCs. Traditional, higher-cost source locations, such as the U.S., have understandably seen a decrease in the level of activity for newer centers, while a broadening array of lower-cost locations across the globe have seen an uptick. For established centers less than three years old, India, Brazil and China (the former as a site for "global" centers and the latter two serve the region and country) remained popular location choices. Over 50 percent of the locations identified as considerations for new centers were in countries within the Latin American and Eastern European regions.
The data from this year’s survey shows that there is a trend for organizations newer to shared services to move straight to multifunctional centers as respondents with newer centers had a higher percentage of functions combined in Shared Services and managed as a single organization. Over 50 percent of respondents had shared services for multiple functions that were at least co-located if not managed as a single Shared Services Organization (SSO) allowing them to reap the benefits of colocation such as lower management costs, a shared governance structure, and shared continuous improvement initiatives. Not surprisingly, the percentage of respondents with SSCs reporting to an independent SSO increases as you start to manage multiple functions as a single organization.
Shared services as a strategic asset
Shared services continues to strive to be seen as a valuable partner to the business versus just a lower-cost alternative. The survey indicates that while demonstrating cost competitiveness is a main focus in SSCs today, moving into analytics was noted as the top future goal by over half of the respondents. Analytics performed within the SSC can drive:
- Operational improvements within the SCC
- Cost reduction and improved service quality
- Business insights resulting in more effective decision making
Using analytics, the enterprise-wide SSO can not only reduce redundancy and risk, but can also reap the benefits of leveraging data for better strategic insight and business performance.
The good news: Year over year, organizations are still reaping the financial and qualitative benefits of shared services, and almost 100 percent of respondents believe that SSCs will continue to provide critical and high-value processes for their organizations.
As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.