Is your SSC meeting your goals? Is it meeting its own? A recent SunGard study reveals that the answer to those questions is all a matter of viewpoint. It found a significant difference between how SSCs see themselves and how the business unites using their services see them. While only 3.4 percent of people in the SSC did not think the center was meeting its service level agreement (SLA) goals , 40 percent of people serviced by it held this opinion.
Why the disparity? Lack of communication, the SunGard study showed. A shared service center needs both consistently communicated standards and frequent performance reviews. And SLAs are only as good as they are understood by the SSC that has to deliver, SunGard wrote in its report, and performance metrics showing both sides how the agreement is being met are key to making sure standards are upheld. If these standards are not communicated adequately and the SSC’s adherence to them is not monitored by both the SSC and the business side, the SSC may think it’s doing a great job while the business units are not getting what they need.
The evolution of shared service centers (SSC) has been a popular topic in the NeuGroup peer group universe, as global companies continue looking to increase efficiencies in cash management and other functions. One way they are doing this is to elevate the importance of SSCs by assigning a shared services head who reports directly to the CIO. They’re also taking on more than just finance, something the SunGard study also revealed. There has been “a trend towards higher quality Shared Service Centers, moving away from the sole goal of reduced costs and towards a model where they are delivering value through improved efficiencies, standardized processes, and the proper technology,” the report said.
To overcome some of the disparities in SSC perceptions, the SunGard recommended daily interaction with the SSC, starting with the transition of duties from the BUs: “Having a clear strategy in place for business units to transition their responsibilities to the SSC along with a clear SLA, are essential steps to the success of a SSC,” SunGard said. “However, if there are no measures taken to ensure daily interaction, daily visibility and daily communication, the SSC will struggle,” and the economies of scale and cost-reducing benefits of the SSC will not be realized.
Of the companies surveyed in 2013 whose SSCs had been in place for at least eight years, most were generally satisfied, but when asked what they would do differently in setting up a SSC, 59 percent said that if they could do something differently in setting up their SSC, they would standardize processes.
SunGard conducted two studies of the use and effectiveness of SSCs, one in 2010 and one in 2013, the second including 485 participants from 23 industries.