The evolution of shared service centers (SSC) continues as companies grow globally and look to increase efficiencies in cash management and other functions. One way this is happening is via a more efficient reporting structure, where companies are assigning a head of shared services who reports directly to the CIO. They’re also taking on more than just finance.
SSCs on steroids.
At a recent NeuGroup Global Cash Management (GCBG) peer group meeting, several members reported working on projects to further enhance their existing SSC structures. Here they were taking advantage of technology advances both within their individual organizations as well as the wider business processing area to create new global business service centers or GBSC. This new format has been described as “the SSC model on steroids.”
SSCs of course became popular in the ‘90s as a way to consolidate basic processes including AP and AR. The evolution to the GBSCs takes consolidation to a whole new level to include many more processing areas with a strong focus on the entire customer experience. At one GCBG member company the new GBSC reports to a GBSC president who then reports to the CIO. Other members commented on having similar structures in their organizations with a reporting structure to the CFO instead of the CIO.
Making sure treasury stays integrated.
With the setup of this new GBSC structure, it is critical that treasury stay integrated with the appropriate business owners. Under the new model described above, treasury sees limited impact as a result of the structure and looks forward to positive gains with the cash-to-order processing area. Still, one challenge remain is that of managing bank relationships. With the creation of these new siloed processing centers, it’s becoming more difficult for treasury to stay in the loop on all banking discussions. This challenge was confirmed by other members who are establishing similar structures. Time will tell how the issue is resolved under the new GBSC structure.
New levels of globalization continue to change member perceptions of what it means to be world-class when it comes to treasury’s support of the business. Shared service centers have evolved into more value-added global service centers allowing for increased efficiencies and cost savings.