Report released at Eleventh Annual Accenture Global Shared Services Conference
MIAMI, Fla.; Sept. 26, 2011 –Executives who lead shared services organizations, designed to reduce overhead costs by consolidating administrative or support functions in areas such as finance, human resources and information technology, are increasingly accountable to the corporate C-suite, according to a new Accenture (NYSE:ACN) study released at its eleventh annual Global Shared Services Conference, which is attended by nearly 300 executives from around the world.
In fact, 59 percent of the shared services executives polled report to C-suite level officers, including their company’s top finance, operations, human resources and information technology officers. And, 17 percent of them report directly to the CEO. In a similar study completed by Accenture two years ago, only 8 percent of the shared services executives reported to the CEO.
According to a report on the study’s findings – “Trends in Shared Services: Unlocking the Full Potential” – as their popularity grows, shared services programs are evolving, and they are being designed to deliver services that require more skill than basic administrative functions. Among the more advanced shared services organizations, the Accenture study identified the emergence of integrated business services (IBS) that leverage the company’s global corporate resources and contract with outsourcing partners to deliver cost-competitive one-stop services to their entire enterprise.
For instance, one pioneering IBS organization cited in the report provides end-to-end support for sales and marketing organizations covering trade promotion management, consumer contact, digital marketing and merchandising initiatives and consumer and merchandise analytics, as opposed to performing a collection of individual functional activities such as sales order management, or contract management, or customer invoicing.
Ninety percent of the companies represented in the survey have already added more geographies and markets to the scope of shared services they deliver. And, within the next five years, 49 percent of the executives said their shared services organizations intend to deliver innovation services as well as other value-add services, such as data analytics and research. Nearly half (48 percent) said their organizations would provide communications, treasury, legal and other services that are not typically part of the shared services mix today.
“As shared services organizations demonstrate their ability to deliver greater strategic value to enterprises they serve and create awareness for the value they create by marketing it within their organizations, their reputation will grow and with that demand for their services,” said Paul Boulanger, managing director, Accenture Finance & Performance Management service line. “That demand is likely to cut across back office services and beyond, with the most successful of the shared services organizations being those that continually improve their processes and services while embracing new technologies.”
To that end, the Accenture study found that high-performing shared services organizations continuously look for ways to improve. In fact, 42 percent of the respondents said they allocate 10 percent or more of their annual operating budget for continuous improvement initiatives.
Currently, information technology is the type of service most frequently offered through shared services organizations, according to 75 percent of the executives. More than half (58 percent) said their organizations also deliver finance services, client-facing services such as billing and collections (51 percent) and human resources (50 percent).
In the future, 42 percent of the executives said that computing technologies, such as cloud, will have the greatest impact on their organizations. As their clients’ service needs evolve, cloud computing may provide a platform for shared services organizations to scale quickly to meet business needs and still manage their risk mitigation responsibilities in a cost-effective, virtual manner.
Eighty percent of the executives said they are proposing flexible work arrangements for shared services employees who support their global organizations. These arrangements typically allow shared services employees to work from home, which provides these organizations a way to tap into skilled labor pools in a cost-effective way.
And, more than two-thirds (69 percent) of the executives said their organizations began using outsourcing to fulfill their global service requirements within the first four years of establishing shared services programs.
As shared services programs continue to evolve, the study shows many of these organizations are struggling with the fundamentals of achieving process excellence while elevating the quality of their service delivery to meet the demands associated with assuming a more strategic role as an IBS organization. Just under half (49 percent) of the executives surveyed reported that their shared services organization had standardized its policies, processes and supporting systems; 26 percent had standardized the policies but not the processes and supporting systems; and 25 percent lacked the supporting systems.
According to Accenture, the struggle to standardize policies, processes and systems may stem from the fact that 78 percent of the organizations included in the study define their processes at a global level but 48 percent still implement them locally. Standardization is necessary for process and service improvements.
Looking ahead, social media is expected have an impact on shared services, according to 90 percent of the executives surveyed, with 57 percent suggesting it may offer them the opportunity for greater collaboration among employees and greater productivity. Nearly as many (56 percent) expect it to lead to improved client collaboration and service delivery and 43 percent said it may increase satisfaction among shared services employees. However, the executives are generally taking a “wait and see” approach, as they evaluate how to use the social media most effectively in a time of rapid technology change and varying levels of social media adoption.
“What is clear is that IBS will define the next generation of shared services as top-performing organizations demonstrate the value they can contribute to enterprises they serve, as they become independent, end-to-end service businesses with C-level leadership that are viewed as strategically important to the enterprise as other operating units,” said Boulanger.
About the Study