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Corporate Treasurers’ Roundtable – Using Finance & Accounting Shared Service Centers to Deliver Enterprise-Wide Value

Using Finance & Accounting Shared Service Centers to Deliver Enterprise-Wide Value

Introduction

Martin Boyd. SunGard. Shared service centers (SSCs) have become a familiar concept to many multinational companies. Originally their purpose was primarily cost savings and many have proved very successful in this respect. According to a recent Hackett survey for example, 84% of SSCs had achieved savings of over 11% and 18% had made savings of over 40%. The benefits which a SSC can extend beyond cost savings, however, and it is in these additional areas of value which we see the most significant trends. Finance costs as a percentage of revenue has steadily decreased, processes are being improved and standardized and new technology is being leveraged to create centers of excellence in the organization. So while SSCs used to be seen purely as cost centers, we see them now as value generators.

We see initial sacings by centralizing professional knowledge and making this transferable across our business -JEANNOT J. JONAS

Are your shared service centers (SSCs) seen as value generators or cost centers?

Joe Prudente, Future Electronics. I think the SSC at Future Electronics is seen more as a value generator: we are involved with issues such as securitization and credit insurance agreements. In these areas, we help to drive down costs as we are able to demonstrate that we handle our receivables well. This is considered very positively by the banks and helps us to secure cost-effective solutions.                                                                                    

How is this validated?

Joe Prudente, Future Electronics. We do month-end reporting which demonstrates the cost of capital and other metrics. The improvement in month-on-month performance helps to reduce our insurance costs.