As cited in a recent KPMG report ,‘The change management aspects of introducing or reconfiguring outsourcing, shared services and centres of excellence can often be poorly understood and mis-managed.’ This is no surprise when you consider the numerous challenges organisations face in attempting to transform their accounts payable (AP) department by setting up a shared services centre (SSC).
A major obstacle facing any AP department is how to process all manner of incoming communication as efficiently as possible and turn it into meaningful data for back office systems. Therefore, what’s under continuous debate is whether setting up a SSC is worth the challenge – will it really prove to be advantageous for an organisation?
A SSC brings with it many benefits, with one of these being that it enables standardised business processes, which prove more cost effective based on economies of scale. A SSC needs to be flexible enough to meet multiple internal customers’ needs and ensure that all relevant Service Level Agreements (SLAs), both internal and external, are met. A SSC is crucial for any major international company that wants to streamline its transactional processes into one, while still supporting multiple local requirements. This saves vital resources by funnelling incoming data through one common channel and allows the creation of a repeatable and scalable model.
There are two key traits that any SSC should offer an organisation and the first is scalability. Given the current volatile economic climate, it’s hard to predict how an organisation’s needs might grow (or diminish) in the future. Without a flexible and robust solution in place, a SSC’s future workings are put at risk because it won’t have the inbuilt capacity to deal with changing requirements. Trying to support unrelated systems and processes on a large scale is virtually unworkable; SSCs must look for a platform capable of supporting multiple territories and activities.
The second key quality of a SSC is visibility. It’s important that a SSC is effectively monitored and measured to ensure transparency across processes. By outlining Key Performance Indicators (KPIs) an organisation can make certain that the SSC is fulfilling its purpose and that the necessary data points can be accurately tracked. Interaction with internal clients often proves a significant challenge for large SSCs. Therefore, it’s important that the SSC can prove it is effectively delivering a service back to its customers and tracking usage, as well as ensuring compliance with stringent guidelines. When it comes to tracking compliance and measuring performance, micro and macro level visibility is a significant factor. It guarantees that agreed targets are being met and minimises any potential compliance exposure.
Decentralisation of processes within a SSC can end up leading to a lack of transparency. Within AP for example, decentralisation can cause major problems when it comes to keeping track of all invoices and scheduled payments. In the future, this could cause late payments, which in turn would potentially cause severe damage to a company’s reputation and result in lost revenue.
Any company that operates on a global scale automatically comes with an additional set of cultural and linguistic challenges. A SSC needs to be able to incorporate all of these differences without affecting the company’s day to day workings. A prime example of these challenges is the number of different languages and local processes and customs which can be involved with an international company. This brings the cultural challenge involved in starting a SSC into the spotlight, highlighting where language differences prove a roadblock to communication. However, by implementing a standardised technology, which doesn’t require heavy customisation with associated increase in costs, an organisation can ensure these differences are controlled and addressed. It’s also important that the technology in place is intelligent enough to understand and take account of local variations, for example VAT and tax, which can be a real problem in this area.
Best practice methods for implementing such an approach organisation-wide involve making sure the SSC is flexible enough to meet local needs, whilst standardising processes wherever possible. As a result, the SSC will be agile enough to adapt its processes to take account of local differences, whilst still achieving the efficiency needed to make it a practical option. Without this flexibility, organisations have to manually intervene, which puts the SSC at risk of becoming unstuck. Ultimately, it fails in its main aim of simplifying and streamlining an organisation’s processes.
Intelligent Data Capture is a key way for organisations to avoid the possible harmful consequences that may come with setting up a global SSC. These tools enable the management of a variety of data sources, in multiple languages and offer configuration options which support local requirements straight ‘out of the box,’ without the need for extensive personalisation. It’s essential for the solution to be flexible and robust enough to allow for a scalable, visible and standardised SSC.
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