[teaser] 2014 state of the shared services industry report

PLEASE NOTE THIS IS NOT THE FULL REPORT

SAMPLE PAGES

Introduction Given the many changes the Shared Services & Outsourcing industry has experienced as technology

makes networked platforms accessible, data turns into insights, and services support global operations,

SSON recently canvassed its global membership to ask them how they were reacting. In this extensive

survey, we’ve unearthed investment and automation priorities, and identified how SSOs rate their impact

on the business.

Barbara Hodge

Editor

Shared Services & Outsourcing Network

Rochelle Hood

Global Head of Communities and Process

Shared Services & Outsourcing Network

This report was written and edited by:

SSON would like to thank everyone who

invested the time to share the details of their

business services strategies with us.


What do Shared Services Look Like Today? An analysis of the organizational set up, sourcing model, and geographic reach of SSOs today.


Solid percentage in the 1-3 year maturity category:

Lots of potential for growth

As SSON has been tracking the Shared Services sector for

nearly 20 years, it’s not surprising that about half of

respondents put themselves in the “mature” or “greater than 5

years” category. The second largest category came from the

“new” or just launched segment (1-3 years). The market still

has a lot of potential for growth, which, as is shown later, will

impact investment and technology decisions. Interesting to

note that 14% put themselves in the Planning and Launching

stage, meaning that nearly half of respondents are in the

growth and expansion phases.

What maturity are you currently at?


Where are your Shared Services located? North America and APAC “most dominant”

location –Europe still strong As the SSO model expands, North America and APAC

are still the most dominant locations for centers,

ahead of India, Central & Eastern Europe, and Western

Europe. Noteworthy that a quarter of our global

respondents run centers in Europe, offering client-

proximity and the all-important language element to

the multi-cultural client base across that region.

Sourcing options broadening for nearshore delivery

The Middle East and Africa is emerging as an

opportunity to provide French, Italian and some

German services to Europe; as well as support growth

across Middle-East markets.


A third of SSOs operate in single-function The discussion at conferences and in online forums has been

all about the shift to multi-function for the past five years. This

is reflected by our data, with 60% of respondents defining

their SSOs as multi-functional (providing more than one

functional service), just over a third of which have also shifted

to a Global Business Services model (meaning global process

ownership or accountability beyond regional/functional). The

increasingly holistic interpretation of the Shared Services

model is supported by growth of a move toward the GBS

model.

What it means

Whether GBS or not, we would expect to see the trend towards

multi-functional centers increase, as companies roll additional

service lines into an established and proven model.

Multi-Function

GBS: Multi-Function

Single Function

*10% Single Function moving to Multi-Function

* 8% GBS: Single Function

*

Which describes your SSO?


While F&A (Finance and Accounting)processes still outrank

other service lines, HR is notably catching up, and the

percentages of single vs. multi-functional SSCs listed here are

a good indication that we may see a continued expansion in

scope into non-F&A activity.

Tip: shift to revenue-generating processes

While the adoption of Procurement is no surprise, the

percentage listing Sales and Marketing, as well as Customer

Service, marks a positive step forwards in terms of SSOs

supporting revenue-generating processes. Similarly, Sales &

Marketing are emerging as service lines, reflecting more

interest in leveraging Shared Services for the customer facing

business processes, a trend we are also hearing more about

in discussions with practitioners.

Expanding scope led by HR, Procurement with customer facing services emerging

Which services does your SSC provide?


While BPO providers have geared themselves up to take on more work, there’s a good chunk of the market that is holding out. The

question remains whether this segment will be persuaded by the increasingly flexible and attractive options promoted by providers

– or whether their concerns around control and customer-centricity will keep them firmly in the captive camp. A relatively low

percentage of Shared Services are banking on outsourcing as their primary model.

43% of market continue to operate as a Captive model

Is Outsourcing Right for You?

The potential for SSOs to increase flexibility,

technical capabilities and scalability

through outsourcing is enormous. Political

decisions, as much as sourcing strategies

influenced by desire to maintain internal

control will weigh in on the final direction

this takes. The extent to which we’ll see the

hybrid market come down on one side or

the other is challenging to forecast. The

survey represents a slower trend

embracing outsourcing more holistically,

with the focus still on piecemeal processes.


The Decision Around Location Sourcing decisions take into account, skills base requirements, proximity of emerging customer markets,

language and time zone support not just pure labor arbitrage.


Shared Services’ Impact on Organizational Performance

Shared Services impacts the business by saving on cost, supporting customer needs, and offering flexible

resources or scalability. Increasingly the model is also recognized for its potential impact on revenue growth..


Process Improvement is a Priority The majority of Shared Services are making innovation, or process improvement in support of innovative

business services, a priority. Process improvement allows cost to reduce while delivering a constant service. It

also drives additional value (eg through analytics) to the business via data based insights, or analyzing

business units’ service consumption patterns.


Talent Management is Core Talent management is becoming increasingly important as the work taken on by Shared Services shifts

towards data analytics, advisory services, and process expertise – thereby requiring a differentiated skill set

compared to the traditional, transaction-oriented role.


Data Analytics and Business Intelligence (BI) Shared Services are well-situated to take on the role of mining, sorting, and analyzing data to deliver the

business insights and intelligence that a company needs to make better decisions in future.


How is Shared Services leveraging industry specific expertise?

Given process standardization, value is now driven by the kinds of differentiated services that set individual

industries apart, for example relating to regulation, or employment.


What are Technology Priorities? Enterprise platforms make it easier for Shared Services to operate – but it is in the emergence of enabling

technologies and cloud-based solutions that we are seeing quantum leaps. Add to the mix the shift to digital

business and mobile applications … where do you stand?


Customer Considerations Now that Shared Services has cut costs and established robust processes, the focus is on providing the kind

of support that positively impacts customer experience.


The Future Nothing stands still. We are in the midst of economic, operational, and technological changes that are shifting

businesses’ priorities. And the Shared Services center is a core facilitator of this change. How are you tackling

the challenge?


Note: Demographics of Respondents

While survey respondents represented a broad variety of industries including Public Sector, Life Sciences/Healthcare,

Technology and Telecommunication and Retail. The largest segment came from Manufacturing and Banking & Financial

Services. These industries have been early adopters of the shared services model and many also have a focus on defect

reduction, waste removal and quality outputs. Quality assurance, continuous improvement and process control focus are well

paired with the Shared Services model. A keen demographic to note is the strong increase of Public Sector Shared Services in

Australia.

To provide some perspective on demographics, we asked respondents to identify which function they represented. Finance &

Accounting is the function with the greatest representation. HR, including Talent Management, Recruitment, Learning and

Development, represented with the second largest population. Multi-function centers and roles ranked as third in the

demographic data.


About SSON

The Shared Services & Outsourcing Network (SSON) is the largest and most established community of shared services and

outsourcing professionals, with over 78,000 members globally. We provide the roof under which key industry experts and

organisations share their experience, knowledge and tools, and SSO practitioners connect with others all over the world, face to

face and online.

SSON focuses on developing its members through providing training, content, tools, and networking opportunities. Our staff

members work from international offices in New York, London, Singapore, Sydney, Johannesburg, Berlin, Brazil and Dubai to

research current trends and developments in shared services.

You can access complimentary access to exclusive interviews, industry reports, survey results, webinars and whitepapers and

more. To join for free, visit www.ssonetwork.com.


The full report is available on www.ssonetwork.com for SSON Premium Members or through one of the global Shared Services &

Outsourcing Week websites in your region.

US: www.sharedservicesweek.com | Europe: www.ssoweek.com

Australia: www.sharedservicesweek.com.au | Asia: www.ssoweekasia.com

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