Establishing a Vision, Mission and Measurement Parameters for Shared Services

Establishing a clear vision with measurable parameters is critical for organizations.

Keeping it simple (I call it the “KIS” rule) is important too, rather than making the vision statement a jargon which stakeholders, customers or employees find difficult to comprehend.

This logically takes leaders to establish organizational values to ensure alignment with its vision. Values stem from certain inherent beliefs, either been inherited or learned, and are the basic premise that should drive every activity in an organization, especially given the fact that Millennials unfortunately tend to fail to appreciate their criticality due to lack of experience. Values begin at home and are showcased by society at large in its various avatars. The milieu in which one is raised is an important factor, so be aware of the background of team members in order to better appreciate their actions and responses to situations.

An example of a vision statement would be,

“Establish a world class Finance & Accounting Shared Services organization whose accuracy, timeliness and completeness can be relied upon every time by all” (The vision statement has a larger goal, which is to build a world class Finance & Accounting facilities where customers feel at home every minute. Also: a razor-sharp focus on the accuracy of the numbers, beholding time-tested principles of accounting, ensuring reported numbers help internal reporting, enable analysis/decision making to statutory compliances and valuation.)

Following the above vision might be a mission statement like,

“Building a world class Finance & Accounting Shared Services in 5 years, focusing on Accounts Payable, Accounts Receivable & General Ledger areas, catering to 50 of the top 100 customers globally, in the Banking and Financial Services Industry. ”

An indication of the measurement parameters is already given in the mission statement, i.e. providing AP, AR & GL back-end service for 50 of the top 100 customers within a period of 5 years from the start. This could be further broken down in terms of projected revenue, cost, operating income etc., to enable periodical measurement.

A core team comprising of leaders and project heads is usually formed to chalk out the overall strategy of how to achieve the mission. The CEO and his core team have to create a strategy for the Sales and a separate one for Operations. They would also have to factor in whether the strategy is being created for an organization with only F&A services or for one where this is offered as an additional service. If it is going to be a brand-new player in the F&A space, then other things like “where vs share”, market size, getting experts on board to help with analysis etc. comes into play.

If it were creating an execution strategy for Operations, one approach could be to have multiple discussions to finalize actions from which would flow goals with measurable targets for employees. An out-of the box approach would be where F&A is not considered as a mere support activity because projected cash flow and project NPV are pointers which aid in key decision making.

The above situation is applicable to captive and third party service providers alike. The organization should also sustain focus on its core competency and values to ensure alignment while building organizational culture. Whilst providing the actual service as and when more competencies evolve, it is important to build upon those as well for diversification.

The key to accomplishing and establishing world class processes would be to have everybody get their hands dirty with the processes and understand it from a customer requirement standpoint.

Building strong people practices would go a long way to ensure that the “People” perspective is never lost.

A fundamental factor that has been overlooked ever since the evolution of F&A back-office services is having true accountants who understand their work end-to-end, and who can handle everything from passing journal entries, identifying and resolving discrepancies, and applying the basic principles of accounting to getting schedules prepared, performing Balance Sheet account reconciliations, calculating ratios, helping with external reporting, preparing cash flows etc.

There is a longer learning curve involved here because that it is how Accounting departments were back in the day, before the Shared Services boom. Hence the expectation should be set right at the beginning with employees.

The break-down of processes has led to a situation where employees no longer care to know the basic background accounting entries of the work they do because of the defined boundaries.

Having accountants in their truest sense would definitely be a shot in the arm for F&A service providers to ensure they always get the big picture right.