Shared service centres (SSCs) developed as a workplace model that centralises routine, repetitive accounting and finance tasks. It aims to achieve economies of scale, and the type and scope of activities vary, as does the structure. Shared services may be outsourced to a dedicated unit within the same group of companies or externally to specialist providers. At the core of this set-up is specialisation, efficiency, and timeliness. Protocols are established and followed, workflows aim at cost efficiency, and activities are outsourced in geographical areas that provide such advantage.
The enhancement of the SSC model aligns with the drivers of change in the profession and workplace developments in the post-pandemic world, namely digitalisation, sustainability, and value partnership. We asked participants to (1) name the repercussions of digitalisation and automation, hybrid work, talent shortages, upskilling, and business partnering, and (2) explain how these effects change and threaten the model. Most expressed the view that the SSC model is not obsolete but needs to be transformed. This requires that finance professionals understand the business and its operations, environment, and stakeholders; take a holistic approach to finance activities; and be agile. Such developments, however, may not be compatible with the principles of standardisation and task specialisation, as noted by this participant:
We’re starting to see some of the downsides of the fragmentation of work into task-focused [jobs], because of the efficiency drive that the generation of people who have been working through [that] are struggling to get a sense of the bigger picture from a business side. And we are lacking role modelling.
The SSC model needs to be enhanced and further developed to support value creation and innovations. Moreover, SSC set-up facilitates organisational digitalisation. This is because operations are already analysed, streamlined, and optimised, which is an important step towards automating routine transactions. But although digitalisation and integration of data ensure easy, real-time access to information by everyone in the organisation, interpretation remains within the remit and competencies of management accountants and finance professionals. Interpretation of financial and operational information prompts idea generation, which may bring new revenue streams or other value-creating initiatives. The combination of SSCs with finance business partnering requires insourcing, rather than outsourcing, of capacity. Engagement with business partnering changes perceptions: the finance team is not seen as a cost centre, but rather as colleagues and specialists that help grow the business from inside. This also requires talent strategies that embed professional development, retraining, and retention initiatives.
From shared services to centres of excellence
So, it’s not about the geographic location anymore. It’s about a centre of competence like people working together, but the location of the person is not as much important.
Our research concludes that the evolution from task to competence-based structures in finance empowers finance teams to meet and excel at the project at hand. The understanding of how this can be achieved varies. It ties in with the purpose for which centres of excellence (CoE) are established. A CoE could be a team that combines and leverages the collective effort of subject matter experts in certain technical areas like tax, treasury, controlling, etc. Or the CoE could be a cross-disciplinary hub within the organisation tasked with implementing a new system or process or seeking innovations and new ways of doing business.
But whether the CoE is developed as a working group or a community of practice, its future, seen through the eyes of our interviewees, is about higher order skills and competencies. Thus, skills such as agility, commercial acumen, proactiveness, flexibility, creativity, communication, and digital and finance acumen are critical to growth and development for both the organisation and its finance professionals. We conclude that finance professionals need to proactively seek new responsibilities and empower themselves to add value, as shared by one respondent:
You just need to really convince the stakeholders that you can run the changes from the centre, either shared services or CoE. And I also convinced my team that we are the start-up in a very conservative family [of companies]. So, we are here to come up with all these uncomfortable topics like automation, innovations, bringing technologies. Now, we are engaging with X [technology], and doing the feasibility study just to demonstrate that the peripheral organisation is the best guinea pig for X technology. So, we’re just trying to do it for our company from the CoE. So, I think it’s a concept that we can embrace, but it really takes courage for finance.