November 20 2015 0comment

Best practices for shared service centres

The shared service centre (SSC) is a very critical backbone for the entire enterprise. If kept functioning at optimal efficiency, it can help deliver high performance, contribute to major cost reductions and improve governance and compliance for any enterprise. Today, shared services are integral to the leadership team of the enterprises they serve.

In the past few years, shared-service is making its strongest re-emergence as a delivery model for over a decade. Close to 25% of enterprises are heavily re- investing in their shared services operations. This is led by changing expectations of internal customers that itself is being driven by fast pace of business, where cycle time to revenues determines competitiveness and leadership for any enterprise. Today’s business users are constantly moving, always connected and more informed than ever with access to latest tools and technologies to help them function better. Business users want their shared services to deliver SLA’s with better operational analytics capability. They want a more savvy and creative support talent who are able to function flawlessly, with agility and engage better with stakeholders to help them get to the next level.

In the recent past, high performance SSCs are achieving this by leveraging technology in a big way. Given that many of these SSC’s are operating based on a hub and spoke model, they leverage technology to ensure better adherence to process standardization with automated checks and validations, workflows and approvals leading to postings.

There is a common pattern in the way high performance shared services deliver results for key business processes:

Order to Cash: With a strong focus on reducing DSO’s, the SSC typically ensures that not only credit limits are clearly set and communicated to customers from time to time, but also ensures that there are minimal outstandings from customers. One of the key pain areas that they’ve addressed really well is to ensure immediate visibility to the payments that customers make and applying such receipts to open invoices correctly. While this is seemingly logical, it is often discounted and not followed through with rigor, being a largely manual process.

High performance SSC’s ensure that :

  • They’re able to capture information from cheque / bank remittance advice, validate and match to open invoices
  • Identify any exceptions and automate workflows / approvals
  • Maintain complete audit trail of entire process
  • Continuous online visibility
  • Reporting based on SLA’s

Order Processing: High performance SSC’s follow best practices of ensuring that they send order acknowledgement to end customers capturing key inputs from the order and further communicate the expected timeline to delivery, credit period etc. In case of any delay, they ensure that the customer is automatically intimated and any resulting escalations / exceptions is handled appropriately. Documents relating to the order execution including end customer PO are always archived and linked to the ERP transaction for future reference.

Procure to Pay: High performance SSC’s have completely automated the P2P process. Purchase requisitions from various parts of the organization are processed centrally and routed to relevant stakeholders for approvals, followed by automatic PO creation in the ERP system.

Paper invoices are scanned and subjected to OCR. They have applications to automate matching of information in the invoice to the purchase order and goods receipt note and identify any exceptions. Notifications and alerts are sent to the relevant stakeholder and any approvals are automatically handled. All documents in this process are archived and linked to ERP for audit and easy reference.

As a result of better visibility into the payment cycle per vendor, high performance SSC’s deliver results via better discounts with their vendors. The entire process is automated leaving no room for errors. Regular dashboards are sent to the leadership team detailing outstanding liabilities, payment cycle time, discounts received etc.

Managing customer requests for posting: High performance SSC’s automate such processes via forms that allow capturing of key information from customers for them to post to their MDM / FI related transactions. This ensures that audit trails are appropriately maintained and SLA’s for such postings are tracked and reported. All workflows relating to such postings are also fully automated.

HR and related processes: High performance SSC’s digitize all paper based documents for HR, Travel receipts etc. and integrate documents into their ERP transactions for ready visibility. Important documentation is archived and kept for future reference. All exceptions and workflow approvals are automatically driven.

High performance shared services run like a separate business with strong leadership who is able to initiate, manage change well and set the expectations with the leadership and key stakeholders. They exercise tight control on costs, governance and compliance and process standardization. They ensure that they manage increasing customer demands by creating a scalable, agile and responsive process whereby all redundancies are eliminated.

Avaali Solutions enables SSC’s deliver high performance. We help SSC’s create and execute their strategy across key business processes with rigor. To know more about our offerings for SSC’s please click here.