Finance Shared Services
What is Finance Shared Services?
Finance Shared Services Centres started as a strategy to optimize internal operations and increase productivity amongst Fortune 500 corporations since the mid-80s. General Electric, Shell, HP, Proctor & Gamble are examples of large corporations who have embarked on this growth journey and obtained competitive edge till the present day. Today, approximately 80% of the Fortune 500 use financial shared service centres and this has in recent years gained traction amongst the Fortune 1000 corporations.
Scope of Finance Shared Services
Finance Shared Services commence with transactional activities which have the highest opportunity for standardisation and are voluminous. Within the Finance Shared Services Value Curve, an evolution on the scope of services can be illustrated as follows:
Procure to Pay
Order To Cash
Record To Report
Master Data Management
Value Add Finance
Budgeting & Forecasting
Dispute Management & Analysis
Tax & Treasury Operations
Finance Data Analytics
Business Data Analytics
Activities such as invoice processing, payment for supplier invoices and employee claims are within Procure To Pay, credit collection ( Order To Cash) and reporting and reconciliation ( Record To Report).
Finance Shared Services can be further expanded to be a Global Business Services through inclusion of other pillars as below:
A fully functioning and optimised Global Business Services will provide the agility which organisations need to scale up rapidly and in navigating the unchartered or choppy waters ahead..
Common reasons in embarking on Finance Shared Services
Some of the common reasons for organisations to embark on Finance Shared Services include this being part of a wider Target Operating Model for their business, with an objective of securing further competitive edge and enhancing their leadership position within the industry. Finance Shared Services and Global Business Services is a key enabler for businesses to transform and achieve their new target operating model.
Mergers and acquisitions is another impetus for implementation of Finance Shared Services as processes and reporting will need to be standardized and optimized. In addition, the ways of working of the newly merged organisation requires establishment and
More and more, in demonstration of their efficiency, agility and ability to provide insights, organisations which are looking towards a listing status or in a funding application process will implement Shared Services in order to deliver the required results.
Benefits of Finance Shared Services
Governance & Control
Building of a tech savvy & digital Finance talent
Greater transparency & insights supported by data
Key Considerations in having Finance Shared Services
Global Process Owners
An organisation should nurture its process experts as a readiness activity prior to implementing a Finance Shared Services. Process experts can be equipped with learning and development opportunities to be a Global or Regional Process Owners, who will then drive standardisation of processes going forward. They are also instrumental in evaluating the required technology to enable the standardised global processes.
Single ERP implementation
Consideration of a single ERP platform implementation which will provide a platform for greater efficiencies to be realised via the Shared Services strategy. Some organisations will consider this as a good opportunity for transformation with both ERP and Finance Shared Services implementation.
Understanding the importance of managing an effective Finance Shared Services via self-service performance dashboard, key performance indicators and excellent customer engagement.
Digitalisation & Automation
Readiness in the use of technology in the ways of working within the Finance Shared Services, such as in monitoring and executing projects as well as in automating the core finance and shared services processes.
Pros and Cons of Finance Shared Services
1. Increase productivity from better efficiency and effectiveness for the organisation
2. Higher agility in responding towards business needs- either scaling up or wide - geographically
3. Pushing Finance talent to be digitally savvy
1. Lack of understanding of business needs
2. Risk of lower customer centricity
Setting up Finance Shared Services in Malaysia
According to AT Kearney Global Services Location Index , Malaysia is ranked 3rd in terms of attractiveness in setting up a global services centre, behind China and India. Malaysia is also ranked 2nd in South East Asia and 12th in the world in terms of Ease Of Doing Business and 1st In Asia for Cost of Doing Business.
With its multilingual talent and a strong pool of Finance talent in Malaysia equipped with globally recognised professional accounting qualifications, Malaysia is able to offer an attractive value proposition as a location of choice.
Multinationals which have chosen to locate and continuously grow their Shared Services in Malaysia include Shell, British American Tobacco, Novartis, Alcon Laboratories and Dell, amongst others.
The AGOS Advantage for Finance Shared Services
We are a group of Shared Services Practitioners with > 15 years of Finance Shared Services and Shared Services experience. We have been Senior Finance Leadership Team members and have the experience in developing Target Operating Model and successfully implementing Finance Transformation strategy for MNCs from US, UK, Germany, Japan, Korea. We strengthen the ecosystem offering by providing a ready to execute management team for Finance Shared Services set up in Malaysia and Southeast Asia.
Managed large Finance Shared Services team of >100 pax and strengthened the ecosystem offerings by providing a ready-to-execute management team for Finance Shared Services set up in Malaysia and Southeast Asia.
Effective change agents for your organisation and team by us “proving” to the team on efficient and effective Finance practices.
Strong network with CFOs and Senior Finance Leadership team (Head of FSS, Head of GBS, Head of Finance Transformation) of MNCs in Southeast Asia.
Implemented 6 Captive Finance Shared Services setup for global organisations within the Pharmaceutical, Fast Moving Consumer Goods, Chemical , software, irrigation, media industry.