Finance Shared Services

I was discussing the possibility of adopting a Finance Shared Services operating model with a CFO last week of a UK based business. We were discussing Finance Transformation in general and he asked me why did we go with Finance Transformation Consulting as a name rather than Finance Shared Services Consulting as a name?

Good question I thought and I explained that I consider that Finance Transformation is the full breath of our Solutions and that Finance Shared Services is a subset of that. I have discussions with CFO's regularly and although some may already have a Finance Shared Services Centre or consider adopting one in the future our conversations are more wide ranging than that. To have adopted the latter name would have constrained how we are perceived and the Solutions we do offer.

The starting point is always to Baseline Finance which on average takes 8 to 12 weeks depending upon company size and complexity. It might surprise you to know but that is Sector agnostic. The approach to Baseline a Finance function across People, Process and Technology is the same no matter what Sector you inhabit.

We want to build a full picture of Finance to help you define the Problem Statement or Exam Question as Consultants call it, that you are facing. This approach does not change when we consider Finance Shared Services, the fundamental building block of Transformation is always the Baseline.

The majority of the time a CFO will reach out for one of two reasons:

1. The Finance Business Systems need an Upgrade or have suffered a breach
2. Finance is just not working. It is sub par in all areas of Performance and consequently people are leaving, they are unhappy and the culture is taking a nose dive

I will always tell them lets get the facts down on paper first. Establish a Baseline of your People, Process and Technology. This will also address what the Current Operating Model is at both a Finance and Business wide level. In all my experience as a Consultant the Operating Model, be that the Current Operating Model (how you are now) or the Target Operating Model (Future Vision), always causes confusion.

It is critical to map an Operating Model Business wide, top down and never bottom up with an isolated view of Finance. When you have mapped it you must measure it otherwise it has no Context and Context drives Problem Definition and Target Operating Model options.

Finance Shared Services is one of the Target Operating Model (TOM) Options available to a CFO who wishes to redesign their Finance function. Based on my experience I suggest that Finance Shared Services is suitable if you tick 4 or more of the following boxes:

1. Total Finance Headcount - 50 Minimum
2. Number of Locations of Finance staff - 3 Minimum
3. Finance Business Systems - More than 1 ERP
4. Finance Process - Complex and heavily dependent upon other Functions
5. Process Volumes - Measured in 10's of thousands as a Minimum
6. Geographies - Multiple locations across Continents
7. Finance Service Delivery - Lower quartile as an example No Flash Results & Numbers in Week 2
8. M&A - The Business has grown by Acquisition

There are other reasons but as a rule of thumb if you don't fit into the above picture with a heavy footprint I advise against Finance Shared Services. I appreciate that this is heresy, as a Consultant I just convinced you not to spend well into 6 figures on the above.

However, there is no point in me leading you towards an Operating Model that you are not suited to or ready for at this point in time. Finance on its journey to best in class is an evolution after all.

If you tick all the Boxes and there is value in proceeding I will take you through a detailed and robust Business Case process. This will outline your Target Operating Model options with metrics and advise you on what TOM to adopt.

So you have passed the 8 Gate Test and you have produced a Business Case and the Board has approved the creation of your new Finance Shared Services Centre, then what? You will need a Leader, a Location and a Roadmap.

Check out our Website for more on how you can create a Finance Shared Services Centre today with Finance Transformation Consulting.

Best Regards,

Michael Ryan