Shared services have long been seen as a supporting unit for the rest of the business with limited impact outside of the bottom line. Now, however, companies and directors of shared services face mounting pressure to make significant contributions other than to the bottom line. With core transaction processing moving to external service providers, what is the face of shared services as a business partner today?
Increasingly, business-minded shared services leaders are addressing four common questions:
- How does shared services support innovation and growth?
- How do shared services organizations (SSOs) innovate to impact the balance of the enterprise?
- How do you re-define shared services from a transaction focus to a front-line innovator?
- What are the success factors that shared services can adopt to increase innovation?
Growth and innovation, two of the most critical issues facing companies today, are historically, not the chief concerns of staff functions or of shared services. However, shared services’ focus on process management expertise forms a critical tool for cost-effective growth. This process management discipline, leveraged through innovation initiatives, allows companies to overcome shortages of key technical talent and lower product cost curves, and expand into international markets. An effective SSO also attracts and retains top talent that companies need to remain competitive.
Shared Services as a Foundation for Cost-Effective Growth
Wall Street continues to reward companies that demonstrate consistent, profitable revenue growth. Not surprisingly, profitable revenue growth continues to dominate the agenda for CEOs of the world’s largest companies. These CEOs frequently report "sustained and steady growth," more than any other challenge, as their greatest concern. Wall Street applauds aggressive strategies from the executive suite that explore new markets, launch new products, and develop new lines of business. Constant innovation is demanded to maintain and increase shareholder value.
But while innovation is considered the driver of top-line growth, what are executives doing to ensure that their organizations are ready to launch and support this growth? Are staff functions scalable? Can SSOs keep their costs down amid revenue growth? Without the cost-effective scalability provided by shared services, the rapid top-line growth powered by innovation can be dragged down by non-discretionary investments in non-strategic back-office functions.