Service Stations.

PositionPanel Discussion - Statistical Data Included - Polling Data

The scope of functions in shared services centers now goes beyond transaction processing activities in finance. In fact, such centers are breaking through traditional functional silos to become business service hubs throughout the world.

A dozen years ago, a handful of companies began consolidating their finance functions into shared services centers. They reasoned that if you were to handle all your transactions in a single place, you'd greatly reduce the cost of each transaction and save millions of dollars. An additional early goal for many was to move transaction-processing activity out of the controller's department, so the controller could focus on being a business partner providing value-added services.

For many companies today, the focus has shifted from efficiency to effectiveness. In fact, the leaders in the field say there's an enormous wealth of information in the detailed data that can be tapped for significant business advantages.

In this roundtable interview, Bob Cecil, Lee Gregory and Jan Williams of Gunn Partners, a business process improvement consultancy with operations in the U.S. and Europe, discuss the present state and future prospects of global shared services.

Where does shared services stand today? Cecil: The concept has proven its worth, and the companies that pioneered it are bringing more functions into shared services. For example, AlliedSignal (recently merged with Honeywell), General Motors and Mobil have brought such diverse functions as human resources, real estate and travel and meeting arrangements into their centers. We're also seeing companies increase the value of the concept by integrating their information systems and making end-to-end improvements in finance and other administrative processes. As another way to increase the value of their centers, some companies are working with their internal customers to find the level of service that provides the best overall value, rather than the level that costs the least.

Where does shared services stand in the U.S.?

Cecil: Most of the largest companies, including 16 of the top 20 on the Fortune 500, have established shared services centers for handling transactions. Companies too small to set up their own centers are looking into alternatives like outsourcing and joint partnerships. The Big Five accounting firms and a number of banks have begun offering outsourcing services.

How does Europe stand in comparison with the United States?

Gregory: Europe is still trailing the United States. The common thread of most European companies with successful shared services centers is their pursuit of a pan-European business model. Such companies want to redefine themselves as European rather than as Dutch, English or German. This pan-European vision helps them overcome age-old barriers of language and culture. Companies with this pan-European vision are having success in setting up shared services centers. For companies without this unifying vision, the record is much spottier. Implementing a successful shared services center requires the wholehearted support of all national business units. If they don't buy into the idea -- and many don't -- they're in a position to delay or even sabotage the implementation.

Is the economic turmoil in Asia affecting the development of shared services centers?

Williams: Right now, most Asian companies are just trying to survive; they aren't even thinking about shared services centers. Australia and New Zealand are a...

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