Your Shared Services Checklist

At no time over the past ten years has the dialog with CFOs concerning shared service models been more energetic and amplified than it is today. Our sense is that outsourcing and offshore solutions have reached a new level of maturity, allowing CFOs to more confidently embrace the concept of shared services as they pursue aggressive cost savings across multiple back-office functions.

Meanwhile, CFOs are now presented with the chance to "leapfrog" early shared service models and achieve a cost structure that may have been beyond their company's grasp only a few years ago.

So what does a company need to consider when adopting a shared services strategy? Here's a short checklist:

• An integrated strategy is required: Today, we are encouraging CFOs to assess shared services and outsourcing strategies in an integrated manner. This means that a comprehensive strategy -- rather than a silo'd functional strategy -- needs to be evaluated and executed. Functions such as finance, HR, IT, and procurement all share the same characteristics -- a high degree of non-customer-facing transactional activities that can easily be centralized and standardized.

• Companies must challenge current thinking in terms of scope: Typical functions that are targeted for shared services have been transactional. Trends are emerging, however, to go beyond the transactional scope and begin to engage service providers with more consultative service offerings. This trend is beginning to include elements of business planning, reporting, and, in some cases, the co-staffing of a Business Intelligence Center of Excellence, in which the organization is relieved of some of the pressure of attracting and retaining the key skills related to optimally utilizing fast-developing technologies.

• A portfolio approach toward shared services and outsourcing: Outsourcing and offshore solutions have matured over the past few years. New geographies have emerged, such as the Philippines, Eastern Europe, and China. Outsourcing providers have honed their scope and quality. These are all positive developments. However, as companies think through their future back-office strategies, we believe that they need to deploy a portfolio approach that considers captive shared service, outsourcing, and offshore models. There is no "silver bullet" solution -- rather, companies need to consider all three models and evaluate a company-specific solution based on economics, business risk, and customer considerations.