Keywords: shared services, finance shared services, cost savings, Balfour Beatty, SSC, shared services centre

Construction firm seeking £50m in cost savings through shared services

Matthew Garrow-Fisher | News | 12 March 2012

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Construction firm Balfour Beatty has proved that finance shared services can lead to major operational savings with the publication of its latest results.

The group set up a UK shared service centre early last year to provide accounting and payroll activities for eight of its operating companies, which together generate 50% of its UK revenue.

Employing more than 230 people to date, the centre is also now co-ordinating and managing some £300m of spend on the procurement side.

By the end of 2011 it had realised operational cost savings of £15m, putting Balfour Beatty on track to reach its target of £30m in gross savings by 2013.

But the organisation doesn't just want to stop there. It is aiming to make £50m of savings per annum by 2015 once the centre has been up and running for four years.

"Our ongoing programmes to achieve cost efficiency and to recycle capital in our investments business were successful in 2011, and we plan to accelerate them," said chief executive Ian Tyler.

"We have confidence that these programmes will underpin performance. This should ensure that we make progress in 2012."

Overall, Balfour Beatty reported a five percent rise in revenue between 2010 and 2011 as well as a two percent increase in underlying profit.

Perhaps the group could teach the government a thing or two about making SSCs a success.

Indeed, it was reported this week that only one out of five shared services centres created by central government over the last seven years has broken even.

Overall £255m has been spent on the creation of SSCs since the publication of the Gershon Review, while none of the £159m in expected savings have emerged.