The Nightmare Before Christmas: SSO Edition

For many, it is the most wonderful time of the year. Exchanging gifts, festive decorations, and spending valuable time with loved ones: it is no surprise that it is one of the most celebrated holidays globally. However, businesses may see this time in a slightly different light. Planned shutdowns, end-of-year deadlines, and cash flow uncertainty are likely not industry leaders’ ideas of festive fun.

If this holiday season leaves your organization feeling more overrun than Santa’s workshop on Christmas Eve, perhaps a shared service center (SSC) is the solution. We know it doesn’t happen overnight, but if you start now, you could be better prepared for Christmas in 2024.

A shared service organization is defined by SSON as a “…well-established principle of consolidating 'non-core' (back office) support services and delivering these from centralized locations to provide lower costs, higher quality/reliability, standardization and harmonization of processes, and a flexible services delivery platform from which to leverage growth or manage business constriction.”

Below we’ve detailed a few of the nightmares your organization could face and how adopting an SSO model could help your business this Christmas or next. 

HR Functions: 

Over this Christmas period, Human Resources (HR) will likely face numerous day-to-day changes. An influx of annual leave requests, Christmas bonuses, and issues at work holiday parties can leave HR teams overwhelmed. 

However, adopting an HR shared service can alleviate this pressure. Consolidating and standardizing HR tasks will streamline processes, reducing the risk of burnout whilst increasing productivity. 

This approach is a useful alternative to expanding HR teams. SSON Research & Analytics notes that 66% of GBS/SSO leaders benefit from “headcount optimization.” The efficiency of the business model allows organizations to realize the true value of each employee. So, applying a GBS/SSO model to HR would reduce stress on staff while remaining cost-effective.  

This cost-efficiency of an HR SSC has been leveraged by SSON’s Most Admired SSO/GBS of 2023. Among these organizations, over two-thirds spend less than 0.5% of their external revenue on HR function roles within the SSC. 

A streamlined HR workforce saves capital and resources for investments in tech solutions that further optimize tasks. For example, processing annual leave requests around the festive period can be tedious. Automating these repetitive tasks, and reducing human touchpoints, allows employee efforts to be focused on more principle, value-adding tasks.  

Implementing an HR SSC has a range of benefits, from increasing staff morale to decreasing business costs. With this in mind, perhaps your HR team will not be facing the same woes in Christmas 2024. 

When it comes to work holiday parties, it’s important to set expectations from the outset as to what the holiday party is (inclusive, celebratory and professional) and what it’s not (a chance to settle scores, drink excessively or an excuse to miss work the next day). This will hopefully help avoid subsequent disciplinaries or at least provide clear consequences. It is also important to check your staff can get home safely as in many places' employers have a duty of care.  

Supply Chain Functions: 

However, it is not only talent management that sweeps teams off their feet. Managing inventory can become more troublesome around the holidays. Between Black Friday, Thanksgiving, Diwali, Día de los Muertos, Cyber Monday, Hanukkah, Christmas, and New Year’s Eve - to name a few - sales in November and December unsurprisingly spike for many enterprises.

Meeting the increased customer demand while avoiding large amounts of leftover inventory can be a difficult balance to achieve. Excess inventory not only takes up storage but can also be costly for organizations, as it risks becoming dead stock. 

To alleviate this risk, organizations could benefit from clear insights surrounding their inventory. These metrics include inventory turnover, return on investment (ROI), and supply chain costs vs. sales. Implementing a supply chain SSC can facilitate data-driven decision-making, as the organization’s data will be centralized. These analytics are usually more accurate due to the supply chain processes being standardized within the SSC. 

Moreover, the efficiency of consolidating supply chain functions will reduce costs. Reduced expenses can allow organizations to adopt data tools and benchmarking technologies. These investments facilitate data-driven decision-making as the SSC’s centralized data will be much easier to visualize to gain insights. 

Industry leaders have already realized the potential of this business model for supply chain functions. In SSON’s 2023 State of the Industry Report, collectively, 43% of responses noted that their organization provides supply chain functions as a shared service. Within this, logistics was the most prominent, which includes processes such as warehousing and trade compliance, with 17%. 

As such, developing an SSC for your businesses’ supply chain functions can allow for more accurate inventory management, backed by reliable data. Streamlining these processes will help your teams keep up with increased demands over the festive season.   

Accounting Functions: 

Adopting an SSC to keep up with increased sales around the holidays extends beyond the supply chain. Accounting departments will likely have a larger number of invoices to process, which is a timely process. In addition, many organizations will close temporarily over Christmas, which can leave invoices unpaid. 

The obvious solution to invoice overload is process optimization and automation. Many organizations have already got a jump start on the former, as 70% of SSOs provide procure-to-pay (P2P) functions, which involve invoice processing and approval. In terms of the latter, establishing a finance-shared service (FSS) paves the way to introduce automation. Reducing human touchpoints from the invoicing process improves accuracy as it reduces human error. This also allows accounting teams to focus their efforts on more meaningful tasks which also tackles what could be a “new-year nightmare” an onslaught of employees quitting and looking for new positions.  

According to SSON’s editor Evan Beebe, accounting processes, such as accounts payable, should be the number one priority for businesses looking to develop an SSO: 

“AP remains as one of the most important, if not the MOST important processes within shared services. The economies of scale are such that even marginal gains can have a vast impact on cost-savings within an organization and the data available can be a vital source of intelligence.”

With this in mind, perhaps your New Year’s Resolution for 2024 should be looking into consolidating your accounting processes through the shared services model or automation projects.

Overall, the holiday season can be a challenging time for businesses, but an SSC is an effective solution. HR, supply chain, and accounting are just three examples of the numerous ways an SSC could strengthen your organization. Successful SSO implementation can result in cost savings, increased efficiency, and the ability to invest in valuable technologies. As we approach 2024, consider making the move towards shared services or automation to ensure your business not only survives but thrives in the year to come.