Globalize and Optimize Your Shared Services Operations

Shared services operations (SSOs) have transitioned from a simple means to gain quick cost savings to a critical component of corporate strategy. Historically, transactional services offered such as …

Shared services operations (SSOs) have transitioned from a simple means to gain quick cost savings to a critical component of corporate strategy. Historically, transactional services offered such as accounts payable processing, payroll, and IT help desks have been no-brainers for domestic SSO inclusion. The new norm for SSO has expanded to smaller, higher-value services such as accounting, budgeting, financial reporting, HR recruiting, and application development. This expansion has companies asking, “Why service only one country with SSO? What can be leveraged to service a region, or even all global locations?”

Services are often thought of in tiers or layers that have different volumes and require different skill sets to deliver. There are many variations of these models and each must be customized to your company. An example is shown below.

Figure 1. Regional Super Centers

Lower-tier services are typically focused on the more transactional components of a shared services center. These services often involve entering transactions into a system or extracting data from systems based on standard company requirements or simple department requests. Companies are leveraging systems and low-cost global locations to process these transactions from one place for all internal business units in a region, or even the entire globe. Low-cost locations make good sense for these services, as there is very little communication required with the business units, therefore language is not a barrier. For this reason, these are also candidates for outsourcing decisions.

As companies consider mid-tier services, constraints such as country-specific laws, region-specific culture, and language barriers often enter the equation. These types of services lend themselves to regional customer-facing hubs, and include services such as accounts payable dispute resolution, accounting, management reporting, HR recruiting, and IT application development. These services can be offered centrally to entire regions such as the Americas, Europe, Asia, and Africa.

Top-tier services such as the provision of legal services, tax strategy, benefits administration, and workforce development often require more local knowledge and understanding of country-specific laws and regulations. These services become more challenging for regional or global provision, though several companies have been successful here too.

Planning the best global delivery model requires an in-depth understanding of your company’s systems, geographies, customers, and most of all, the willingness to change. Furthermore, a deep understanding of country- or region-specific laws, cultures, and languages is necessary. Once this understanding is clear, companies can approach the global design by allocating services to tiers of work. The options will begin to unfold when these tiers with attached services are treated like building blocks, placing lower tiers in fewer global locations and higher tiers in more global locations. Some services can be disconnected from their tiers, depending on the company, and regions they operate in. Examples of two global approaches are depicted below.

Figure 2. Global Transaction Center with Regional Customer Hubs

Figure 3. Regional Super Centers

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Brad DeMent is a Partner at management consulting firm ScottMadden.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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