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Setting up a shared service centre? Meet the decision tree

BlogAnna Bowsher31.10.2012 Comments (0)Bookmark

Finance shared services, Leadership / Governance, Maturity / Organisation, Process / Supporting Technology, Process excellence / Compliance

Every organisation will have its own requirements and objectives when setting up a shared services operation, so will need a very individual road map. It can be helpful, however, to talk to someone who’s been there, done that, got the T-shirt.

At’s US Summit for Leaders in Finance Shared Services in Atlanta earlier this month, Deborah Moehlich, Director of Financial Systems and Shared Services at Fiserv, drew on her extensive experience of setting up and managing their finance shared services operation to share her fool-proof method for creating such a high-level roadmap specific to your organisation. It is called the decision tree.

1. Is this an activity for governance, control or oversight?

If yes, then this activity needs to be placed in the corporate core of the business.

Shared services are part of the wider business model and aim to drive focus and performance improvement. Unlike centralised functions which take their leads from corporate headquarters, shared services are accountable to the business units they support. Therefore any activities that aim to provide company-wide reports or drive governance should come from the top.

If no, move on to question 2.

2. Do customers or business units need this service?

If no, then the activity can be eliminated entirely. A major reason for moving toward a shared services model is to reduce wasteful activity. Unless the activity ties in with and produces results that directly contribute to the business, it is not necessary. Evaluating whether an activity is essential can often be the hardest part of the process, as it usually involves some level of culture change, so be prepared to be brutal.

If yes, move on to question 3.

3. Is this a rules-based, transactional activity?

If no, the activity can be placed directly into the business unit, rather than the shared services centre. By moving the administrative activities into the shared service centre, you will allow the business unit to focus on the more external customer facing and decision making roles, thus increasing efficiency by having resources dedicated to only one process.

Accounts payable, for example, is a highly rule driven process. This is often the first function to be moved into shared services as huge cost and efficiency savings can be realised through its automation. More analytic functions such as financial planning, however, should usually be contained within the business unit where specialist resources can be focused.

If yes, move on to questions 4.

4. Are there economies of scale across business units?

If yes, then the activity can be moved to the shared services centre. For example, if every business unit is running an accounts payable function, it will cost more overall to run them as separate processes. By removing that workload from the business unit and consolidating them into a shared services operation, transaction cost can be significantly reduced.

If your answer is no, however, the activity can remain in the business unit.

How have you determined what does and does not go into your organisation’s shared services centre? What other questions do you think need to be asked? If you think it would be valuable to meet with 100 of your peers to discuss the pressing issues facing shared services professionals, come to The European Summit for Leaders in Shared Services next March 2013. For more information or to reserve your place, get in touch on +44 (0) 203 751 2333 or at

shared services, finance shared services, Deborah Moehlich, Director of Financial Systems and Shared Services, Fiserv, The European Summit for Leaders in Shared Services, shared services organisation

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