Financial Shared Services: How to Conquer Data Management Challenges
According to Deloitte, 88% of businesses who use a shared services approach to manage an organization-wide business function use it to take care of their financial operations.
Why finance? These teams are often tasked with looking for ways to become more efficient, and for large organizations, this approach is often the answer to achieving economies of scale for the finance function.
There’s no question about the valuable cost and efficiency gains to be had by adopting a financial shared services model, but it’s equally important for organizations to know that this move doesn’t come without its challenges – and data management tops that list.
Transitioning separate business units’ processes and data into one single set of systems can be laborious and time-consuming. It’s an undertaking that, if managed incorrectly, could actually cause the business function to become less efficient, not more.
Avoiding the inefficiencies which often accompany relocating and transforming data into one shared environment is essential if a business is to successfully and efficiently adopt the financial shared services approach.
Maximizing the benefits of financial shared services
So you’ve weighed the benefits and risks, and have decided to move forward to this centralized financial shared services model. Now what?
The first step is to take the existing financial processes out of the hands of the various accounting functions and pass them on to the new central function.
This could see one team handling all financial processes but still using a variety of systems – from spreadsheets and home-grown software to individual accounting platforms that have been adopted historically by individual business units.
Essentially, what’s being done is the transfer of various workloads into one central location. As a result, organizations can streamline resources and real estate and reduce some of the “lag” caused by moving financial data and tasks around a large, complex business.
However, implementing financial shared services means significant business change, so it makes sense to maximize the benefits from this new approach.
These benefits can only really be achieved when the actual financial processes themselves are streamlined, by moving from a variety of systems (some of which may well be outdated and no longer fit for purpose) to one central financial platform, typically SAP.
Read the eBook
How to Solve the Top 10 Customer Master Data Challenges in SAP
Read our eBook which highlights the top ten challenges that companies typically face with managing customer data in SAP.
A major part of this system consolidation is the movement of data from points A to B.
Financial data volumes can be vast, and a manual transfer is slow and time-consuming. However, it’s possible to speed the process up by using a financial automation solution to replace the “human” process of entering data from one system into another.
For any organization that wants to manage its financial processes through a central system like SAP, tasking a piece of software to carry out repetitive data entry tasks can save the business a considerable amount of time and energy.
Automation not only helps financial shared services get up and running swiftly, providing a fast boost to organizational-wide efficiencies, it also helps minimize any disruption caused by major change to business operations.
The robots are here: Automation in action with Vodafone
Any large business with multiple subsidiaries can benefit significantly from a financial shared services approach.
Accounting functions, for instance, can transform delivery by consolidating processes across the entire business into one specialist unit. However, a major obstacle to success can be moving processes from a multitude of sources into one core system and business function.
Telecoms provider Vodafone has a financial shared services center to handle the bulk of the its financial management, processes, and transactions – including fixed assets, Purchase to Pay, Record to Report, and General Ledger.
Handling considerable volumes of assets in one SAP database was a challenge within this dynamic and frequently changing environment. One area of Vodafone’s business had 9 million assets and 100,000 postings per month – which would normally take six months, five different SAP screens, and two different transactions to process.
Using this method meant that a 100-line item, for example, would take up to 60 minutes to process manually. To drive financial shared services efficiency, Vodafone chose to adopt Precisely’s data management software and took advantage of its SAP-specific automation capabilities.
The results? Precisely’s solution automatically posted data to SAP via Vodafone Excel workbooks, eliminating data entry via the SAP GUI and reducing the processing time by 75%, down to only 15 minutes. This outcome was seven times better than Vodafone anticipated.
“The system works very well for us” says Peter Barta, Vodafone’s Asset and Project Accounting Team Leader. “Our complicated processes are handled in fewer steps, which reduces time spent on complex postings and allows us to avoid any internal IT debt.”
When it comes to financial shared services, the end-game is all about improving business-wide efficiencies – but, the process of transferring data can be anything but efficient if the process isn’t carefully managed.
Automation can help ensure a smooth and fast transfer of data allowing businesses to focus on delivering business value and operating a highly efficient financial shared services model.
To learn more, read our eBook How to Solve the Top 10 Customer Master Data Challenges in SAP, which highlights the top ten challenges that companies typically face with managing customer data in SAP.
Author’s note: This blog post about financial shared services has been adapted from an article originally published in AccountancyAge.com.