Oversight Systems Financial
Executive Survey Finds More Than Half of
Shared Services Centers Fall Short of Operational
Goals
ATLANTA (Oct. 17, 2006) - Shared service centers have yet to show
their full potential for many companies
according to the 2006 Oversight Systems
Executive Report on Shared Service Centers.
The national survey of financial executives
found that more than half of respondents
report their shared service centers (SSCs)
are well short of achieving their operational
goals.
First implemented in the 1990s by many
large enterprises, the SSC model allows
companies to consolidate client-facing functions
in an attempt to reduce costs. However,
the report released today finds that 52
percent of executives report their SSC are
only meeting half or fewer of their business
goals. The free report is available to download
at www.oversightsystems.com/survey.
"Companies adopted shared service
centers for the immediate cost savings,
but executives are now struggling to continually
improve their operations," said Patrick
Taylor, CEO of Oversight Systems. "This
survey shows that shared service centers
must develop strategies and implement systems
that support ongoing improvement."
Reflecting the recent development of most
shared service centers, more than half of
executives (59 percent) report that their
SSCs have been in operation for less than
five years. Regardless of the youth of the
concept, companies are putting much stock
into these centers. Most executives (85
percent) report their SSCs serve four or
more business units with 40 percent reporting
to serve 10 or more.
Although the C-suite goals are clear, achieving
them is often met with adversity. The most
prevalent challenges to ongoing SSC operations
were maintaining continuous improvement
(61 percent), skepticism from business units
(59 percent), employee retention/turnover
issues (43 percent), meeting customer service
level agreements (26 percent) and threats
of outsourcing business processes (13 percent).
The Real Measure
of Performance
When it comes to shared service centers
there is no measure of performance more
important than cost savings and that is
the silver lining in this report. Nearly
three-quarters of executives (73 percent)
classify their SSC as “world class”
or “average to above average.”
As such it comes as no surprise that nearly
the same number of respondents (71 percent)
report having almost reached, reached or
exceeded their cost savings expectations.
In fact, the study found that 85 percent
of executives were prompted to embrace the
SSC model in an attempt to reduce and control
operating costs. Although cost was the driving
factor for implementing an SSC model it
was not the only reason. Other reason included:
- Improve quality (69 percent)
- Improve their customer focus (63
percent)
- Free up resources for other purposes
(49 percent) and
- Improve company focus and reduce
risks (34 percent).
Goals for 2006
Beyond the central goal of reducing costs,
executives do have other goals for their
shared service centers. Topping the list
of 2006 goals with 52 percent support is
to improve on service level agreements or
SLAs. Other popular goals include: re-engineer
business processes (51 percent), increase
transaction throughput and capacity (40
percent), expand business offerings (39
percent), and reduce aggregate error rates
(35 percent). Less frequently cited goals
include: increasing the percentage of one-touch
transactions (30 percent), implementation
of Six Sigma programs (23 percent), and
automation of Sarbanes-Oxley compliance
(20 percent).
Regardless of the hurdles that are faced
with implementation and operations of shared
service centers, 97 percent of executive
point to sustainable benefits of SSCs as
opposed to traditional outsourcing of business
processes. When compared to outsourcing,
executives say SSCs offer benefits such
as:
- Improved level of service and quality
(81 percent)
- Better responsiveness to customer
demands (68 percent)
- Greater flexibility in adapting
to evolving business needs (62 percent)
- Lower aggregate costs of operations
(51 percent).
About the 2006
Oversight Systems Executive Report on Shared
Service Centers
A total of 103 financial executives participated
in this study, which was conducted at executive-level
conferences in 2006. Titles of those surveyed
included vice president of finance, vice
president of shared services, controller,
direct of business services. This study
follows the July release of the 2006 Oversight
Systems Financial Executive Report on Risk
Management, which found companies embrace
the concept of enterprise risk management
but continue to struggle with implementation.
Also recently released was the 2006 Oversight
Systems Financial Executive Report on Sarbanes-Oxley,
that identified growing benefits of Sarbanes-Oxley
compliance and specific compliance goals
for 2006. All these research studies can
be downloaded for free by visiting www.oversightsystems.com/survey.
EDITOR’S NOTE:
Camera-ready charts and graphs of the findings
from the 2006 Oversight Systems Executive
Report on Shared Service Centers are available
by contacting Donna Askew
by phone at 770.984.4650
or by email at donna.askew@oversightsystems.com.
About Oversight Systems, Inc.
Oversight takes continuous monitoring to the next level by combining an audit data warehouse, advanced analytics and workflow into a single, integrated, application. By inspecting each step of individual transactions across systems, Oversight identifies errors, control violations and fraud to drive higher levels of performance and compliance. Oversight's platform automates the entire life cycle finding problems in business processes, fixing those problems and proving the problems were resolved. Oversight is the solution of choice for those CFO's, CIO's and CISO's serious about compliance and enhancing their financial performance. For more information, visit www.oversightsystems.com.
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