maximizing value of shared services

Maximizing the Value of Shared Services

Shared Services and Outsourcing Week 2011

Jessica Golden, Principal

Mark Klender, Principal

Deloitte Consulting LLP

March 2, 2011

- 2 -

Introduction

Survey results:

�Geography

�Operations

�Organization

�Scope

� Journey and value

Q&A

Agenda

Introduction

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� This year’s survey attracted 270 participants from around

the globe and provided data for 718 Shared Services

Centers globally

Survey participants

Source: 2011 Deloitte Shared Services Survey

Industries of organizations

surveyed

Annual revenues of

organizations surveyed

Geography

- 6 - 20

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� There has been a shift in the location of established

markets for Shared Services over the last ten years

�More mature centers indicated that they serve more

geographies than newer centers

Geography

Top five locations by

maturity of center

Geographies served by

Shared Services centers

Source: 2011 Deloitte Shared Services Survey

- 7 - 20

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Future Direction

� 38% of respondents indicate plans to relocate SSCs

� Labor factors were the most important drivers for relocation

� 72% of those with plans to relocate would likely select a

more established location versus a pioneering one

Source: 2011 Deloitte Shared Services Survey

What locations are you considering for relocation?

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�Shared Services is increasing its reach into the “middle market”

�Organizations are migrating from decentralized SSC delivery, to regional

centers, to a global hub & spoke model

�Labor factors continue to drive location selection for SSCs – quality,

availability, and language skills – while cost stays top of mind

�Numerous factors are driving organizations to adjust where their centers

are located and how many centers they operate

�There is increased focus on Latin America and Asia – both for regional

centers and lower cost alternatives – for serving the Americas and

Western Europe

Key insights regarding geography

Operations

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� 77% of companies mandate use of Shared Services

� The top reasons to opt out of Shared Services include

the inability to support the business unit and poor

responsiveness

Operations

Reasons business units/segments

opt in to Shared Services

Business units/segments served by

a Shared Services center

Source: 2011 Deloitte Shared Services Survey

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�Organizations used a variety of motivators to attract and

retain talent including an appealing work environment,

advancement opportunities, and financial rewards

�Organizations which experienced difficulty recruiting and

retaining management staff has increased by 23% since

2009

Talent

People-related challenges

Source: 2011 Deloitte Shared Services Survey

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� For companies that make Shared Services an “opt in” strategy, cost

reduction is table stakes

� Organizations continue to focus on leveraging new technologies to

improve center operations and improve customer service – with a focus

on improving interaction with their customers

� As centers mature, Shared Services ability to anticipate business unit

needs increases in importance

� Organizations that do not focus on creating strong morale and an

appealing culture struggle with retention and productivity

Key insights regarding operations

Organization

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�As companies move from single to multi-functional Shared

Services, the reporting relationship shifts to either an

independent Shared Services organization or geographic

leadership

Organization

Reporting relationship for Shared

Services with a single process area

Reporting relationship for Shared

Services with multiple process areas

Source: 2011 Deloitte Shared Services Survey

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Standardization

Areas where companies drive

consistency across Shared Services

Centers

� There continues to be a

focus on driving

consistency across SSCs

in numerous areas

� 50% or more of the

processes for

respondents’ SSCs are

standardized for all

customers

Source: 2011 Deloitte Shared Services Survey

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� As organizations increase their portfolio of offerings and geographies

served, reporting relationship shifts away from function

� As organizations pursue global delivery, governance becomes

increasingly important

� There is no one right way to approach chargeback mechanisms, but

clarity in calculation is a must in managing successful relationships

� SSCs are not only increasing their relationship management strategies

but also putting accountability back on the business units to remain

connected

� Organizations are missing the opportunity for incremental savings if they

do not include tax considerations in their overall business case

Key insights regarding organization

Scope

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�Since 2003, Finance has remained the #1 process area

most common in Shared Services

�As Shared Services organizations mature, nontraditional

process areas, such as Sales/Marketing, Real Estate/

Facilities, and Legal continue to grow

Scope

Process areas in your Shared

Services organization

Source: 2011 Deloitte Shared Services Survey

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� 47% of the SSCs represented in the survey have more than

one process area in their center

� The more mature a center, the higher number of process

areas performed

Function

Number of process areas in your

SSC

Average number of process areas in

SSCs by maturity

Source: 2011 Deloitte Shared Services Survey

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Key insights regarding scope�SSCs continue to expand into new functions such as Real Estate, Sales

& Marketing, and Legal

�Many SSCs are migrating mature transactional processes offshore to

enable them to take on more advisory process areas

�Multi-functional centers now account for nearly half of all SSCs, with

more established centers having an average of 2.4 functions per center

�Organizations are using a portfolio approach of Shared Services and

Outsourcing to optimize their service delivery model

Journey and value

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�Consistent with previous surveys, the most popular

approach to implementing SSCs is to move processes prior

to standardization and technology changes

Journey

Timing of

technology change

Timing of process

standardization

Source: 2011 Deloitte Shared Services Survey

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�Since 2003, people/change related areas continue to be the

most underestimated aspects of implementation

Level of effort

Aspects with underestimated level of

effort during an SSC implementation

Source: 2011 Deloitte Shared Services Survey

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Value

�At least 50% of respondents indicated that they had

achieved their Shared Services objectives across most

areas

Technology Automation

Technology

Standardization

Headcount Reduction

Time to Implement

# of Processes in Scope

Type of Processes in

Scope

# of Locations Served

50% 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50%

Short of Meeting Objectives Exceeded Objectives

Source: 2011 Deloitte Shared Services Survey

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Key insights regarding journey and value

�Regardless of the approach, organizations are delivering year over year

incremental value to their bottom line through Shared Services

�Organizations continue to underestimate critical elements of the Shared

Services journey required for success

�Organizations are recognizing that benefits other than cost reduction,

such as controls, data visibility and a platform for growth, are just as

valuable

�To maximize the value of your Shared Services initiative, the power of

the organization’s culture cannot be underestimated or ignored

Q&A

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Contact Information

Jessica Golden

Principal, Deloitte Consulting LLP

New York

+1 212-618-4663

jgolden@deloitte.com

Mark Klender

Principal, Deloitte Consulting LLP

San Francisco

+1 415-783-4087

maklender@deloitte.com

Copyright © 2010 Deloitte Development LLC. All rights reserved.Copyright © 2011 Deloitte Development LLC. All rights reserved.