What are the Chief Characteristics of a Top Performing SSO? Part 2 – Figures That REALLY Tell You How Good your SSO Is

Cast your mind back all the way to February 2009 when you would have read Part 1 to this 3-Part Series on Chief Characteristics of Top Performing SSOs. I am sure you read it and were inspired by the findings. Some of them were very surprising. In this feature article you will find out what the second set of characteristics are, which are more transaction based.

Increasingly I meet finance shared services professionals and they talk through their top KPIs when it comes to the AP part of their shared services operation. Give or take a couple there are routinely 5 chief KPIs which pop up. These stats should give you the 360 degree view of the health of your AP operation. And let’s face it, if your AP is toned, the general shape of your SSO should be fairly impressive.

So, in January sharedserviceslink.com ran a Benchmarking Webinar (based on findings made available by The Hackett Group and KPMG). The intention of the exercise? To compare our attendees stats with the world class stats.

The first question was asked to understand the scale of the operations involved in the exercise: ‘How Many Purchase Invoices Does Your SSO Process Per Annum?'

25% of respondents processed over 1 million invoices per annum
30% of respondents processed under 100,000 invoices per annum

With this context in mind we then started to compare metrics with those of the Top Performers. The first up was invoices processed per FTE per Annum.

21% of respondents processed under 8000 per FTE per annum
26% of respondents processed 18,000 or more per FTE per annum
In a world class environment 1 FTE processes over 35,000 invoices per annum
In a non world class environment 1 FTE processes just under 12,000 invoices per annum
In 2007 world class productivity was 29,467 per FTE per annum
In 2007 non world class productivity was 10,133 per FTE
The difference between 2007 and 2008 for a world class organisation was 20%
The difference between 2007 and 2008 for a non world class organisation was 16%

Cost is clearly a key metric. But on its own it can be considered fairly meaningless. The respondents were asked how much it cost to process a PO invoice from receipt to pay (not including facilities). The cost per PO invoice in a world class organisation is a staggering $1.28. Seeing that 15% of respondents process PO invoices for over $10, this world class figure is really impressive.

If you would like to find out what world class stats look like for First Time Match Rates, Payment on Time, and Electronic Invoicing then please take a look at the third and final part of this series next month, when I will also be sharing with you some final observations on what world class shared services organisations are doing differently in order to get ahead.