Mastery of Shared Services Can Sustain and Strengthen Enterprises for the Economic Upturn, Accenture Study Finds
NEW YORK; July 22, 2009 – Enterprises that demonstrate mastery of shared services can sustain and strengthen their market position for the economic upturn, according to findings of an Accenture (NYSE: ACN) study released today.
By skillfully leveraging a mix of operating models, workforce management techniques and technologies, shared services “masters” achieve business objectives while expanding the scope of shared services to include strategic, insight-based activities to contribute to overall performance, the study also found.
The study, entitled “Achieving High Performance through Shared Services: Lessons from the Masters,” is based on a global survey of 275 executives who manage shared-services organizations for large enterprises. Fewer than 10 percent of the organizations they manage were identified as shared-services “masters” in the study, achieving this status based on their self-reported capabilities, their performance as measured against their objectives, and their adoption of practices that contribute to growth and profitability.
The study also revealed that the economic downturn has increased demand for alternative service-delivery solutions, including insourced and outsourced models operated offshore or onshore. Half (50 percent) of the respondents said that the economic uncertainty has caused them to expand and/or further leverage the benefits of shared services, with cost takeout being a top objective for both the present and for the next three years. Further, more than two-thirds (70 percent) of respondents said they plan to increase the geographic reach of their shared-services organization within the next three years, extending these services into more countries.
“Shared services capabilities have been and continue to be critical enablers for business’ survival during this downturn,” said Dan London, managing director of Accenture’s Finance & Performance Management practice. “As cost reductions and the need to find additional ways of extracting value from existing investments remain top priorities, well-run shared-services organizations are the perfect vehicles for delivering added value.”
The report noted that shared-services masters have evolved their operations over the last decade, enabling them to fulfill a broad set of business objectives, ranging from cost cutting to the facilitation of mergers and acquisitions, among others. As a result, novices can learn lessons from the experiences of those that have mastered shared services and thereby accelerate the proficiency with which they can operate their shared-services organizations.
Further, shared-services masters demonstrated a superior ability to set and achieve objectives. Masters rated their performance against their objectives 40 percent higher, on average, than non-masters rated their own performance across all objectives queried. For example, masters reported significantly better performance compared with other respondents in terms of setting and meeting objectives for reducing costs through simplification and standardization of processes (6.4 for masters to 4.7 for non-masters, on a seven-point scale), attracting and retaining the best talent (6.2 versus 4.3), increasing service quality (6.2 versus 4.6) and aligning the organization on common objectives (6.5 versus 4.4).
Additionally, masters were more likely than non-masters to invest in formal continuous-improvement programs for their shared-services organizations. Specifically, more than 80 percent of the masters, compared with less than 30 percent of the other respondents, planned to implement continuous improvement programs. Nearly nine out of 10 masters (87 percent) said they have immediate plans to implement improvements to control process initiatives, versus less than half (47 percent) of non-masters, and more than three-quarters (83 percent) of masters said they plan to undertake initiatives to improve their use of performance metrics, versus 45 percent of non-masters.
While 70 percent of the respondents rated factors associated with talent management as very important or absolutely critical, masters were more likely to take the definitive steps required to improve their workforce performance. For instance, they were nearly twice as likely as non-masters to say they planned to provide more formal training for their shared-services employees over the next year (74 percent versus 40 percent), and they were more than 50 percent more likely than non masters to plan initiatives that improve employee engagement (83 percent versus 49 percent).
“Shared-services masters are delivering on the promise of their business case, achieving and maintaining the balance between scope, cost and service quality,” London said. “By extending the scope of their shared-services operations into additional functions, they have transformed shared services into a strategic function.”
About the Study Accenture conducted an online survey between November 2008 and February 2009 of more than 275 executives who are responsible for managing shared-services organizations. The enterprises for which the respondents work represent more than 20 industries operating in North America, South America, Europe, the Middle East and the Asia Pacific region, and 60 percent of the organizations reported annual revenues of at least US$5 billion. The study’s findings also incorporated secondary research and Accenture’s experience, having helped clients implement more than 500 shared-services organizations worldwide in the last 20 years.
About Accenture Accenture is a global management consulting, technology services and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. With approximately 177,000 people serving clients in more than 120 countries, the company generated net revenues of US$23.39 billion for the fiscal year ended Aug. 31, 2008. Its home page is www.accenture.com.
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