The heat is on. Businesses are getting pressure from all sides – to increase transparency, improve intimacy and trust with internal and external stakeholders, and adapt to the need to be “all digital all the time.” Wouldn’t it be great if there were a silver bullet to help solve these challenges? Something that could streamline finance operations, enhance productivity, support new service levels, and speed collaboration?
In fact, there is. According to three thought leaders featured on Streamlining Your Finance Operations: The Experts Speak, the March 15 edition of Financial Excellence with Game-Changers Radio, presented by SAP, the answer is shared services.
Thinking about innovation – and how to invest
The discussion began with a look at how finance can move forward and innovate. To introduce his point of view, Christopher Juneau, vice president of the Americas global accounts and channel marketing with Concur, chose a quote from Apple co-founder Steve Jobs.
“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something, your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”
Christopher noted that although many companies say they are led by their customers, “the innovations that truly made a difference were innovations that the customer did not want, or didn’t know they wanted at that time.”
For his introductory quote, Martin Naraschewski, vice president of finance solutions at SAP, cited Stephen Hawking, visionary author of “A Brief History of Time.” Hawking said, “We are all now connected by the Internet like neurons in a giant brain.” Martin remarked, “We are getting to a new level of recognition, of intelligence, of knowledge that is completely unprecedented and would never be possible if you processed it on your own.”
Andrzej Hutniczak, senior VP of business services innovation with Capgemini, chose a quote from Warren Buffett, CEO of Berkshire Hathaway: “Price is what you pay; value is what you get.” Andrzej explained that organizations need to focus on the actual value of their investments, more than just on cost. Does the investment give the business global visibility? Does it give you insights that help you make sound business decisions?
Innovating with shared services
How does a move to shared services reflect this approach? First, Christopher defined the concept. “The term ‘shared services’ describes a center of excellence with regard to a given set of business processes, which typically would touch many employees within an organization.” He said that these services, enabled by technology, are used to manage anything from payroll and invoices to employee benefits.
Martin explained that the move to shared services began with an effort to push down costs. What followed was standardization of processes across the enterprise, making it easier to run the business with people all working in the same way.
But how can standardization work in a global economy, given local differences? “We need to follow the logic,” he said, “looking at the activities that do not bring any value and seeing how we can eliminate them. Standardize what can be standardized to the maximum degree, say 80% to 90% across the board.”
The panel was unanimous in its enthusiasm for what is coming next for shared services and standardization. ”We’re now about to move beyond just the transaction, beyond the process. Now it’s about the experience and the insights that may be captured by these processes,” said Christopher. “There’s a lot more to build on.”
A mobile-first strategy for shared-services initiatives
The discussion pivoted to incorporating mobile technology in shared-services initiatives. “That gets back to what the panelists have said about experience,” he remarked.” Each of us has at least one mobile device, and we expect to be able to interact with any enterprise application to get our job done. If you can’t deliver a mobile experience for the service you’re providing, you’re likely leaving out a major component and potentially impacting your stakeholders’ satisfaction.”
Andrzej added, “We are already in the world where the workforce is virtual.” Being able to leverage mobile technology opens up collaboration opportunities, connecting people even if they are not in the same room. “If you’re able to crowdsource ideas within your company to build better products and services, for example, the better it will be for your company.”
The value of a show-and-tell approach
One major roadblock organizations often face when rolling out shared services: they believe they need a stronger performance culture before a broader roll-out. “I believe the opposite is true,” said Martin. “A performance culture is one of always being measured, and what’s not being measured is not being managed. But seeing is believing. This comes back to the opening quote from Steve Jobs. Put things into the hands of people and show them what they can do differently. Just get it out there and continue improving, kind of like a rapid prototyping approach, not trying to perfect everything.” Showing people that you can do something differently is a way of producing “advertisers,” or advocates who help push for further adoption, he added – and an important element of change management.
To elaborate, Andrzej quoted American engineer and statistician W. Edwards Deming: “In God we trust. All others must bring data.” Andrzej explained that using data and analyzing it to improve performance is critical. He also agreed with Martin that organizations need to be open to rapid prototyping, because if not, they pass up many opportunities to construct new and innovative ideas. Christopher, on the other hand, confirmed that organizations need to “empower their employees to make the right decisions – and they can only make the right decisions if they have the data.”
The future of finance: leveraging technology and data
When the discussion turned to what’s in store for finance in the future, the panelists were in agreement. Today’s finance professionals need to be more than good accountants; they also need to be good communicators and problem solvers. Finance professionals need to be able to leverage technology as well as the data available to gather insights that can add value to the business. “It’s creating an interesting dynamic now between IT and finance, where IT may have historically been the only one making technology buying decisions. Now finance and other stakeholders have a say,” Christopher commented.
“Automation and experience are the two keywords,” Andrzej added. “Automation is really getting rid of repetitive tasks and then helping finance organizations to focus on providing more value to the business, a better experience.” This experience is not only referring to a firm’s external customers, but also to its internal customers – its employees, partners, and stakeholders.
In the crystal-ball predictions lightning round at the end of the program, Andrzej pointed to the focus on automation of transactions, leveraging data to make predictions rather than analyzing past data, and a concentration on the customer and user experience.
Chris predicted that, by 2020, “Financial shared services will begin to even transform themselves because over that time, they will be delivering cutting-edge technology. I believe that organizations will look to these financial shared services to go beyond the walls of finance to other areas to accomplish those same things: delivering the right experience and deeper insights.”
Martin predicted that more and more, finance professionals will be doing less transactional work. As a result of shared services, the future finance professional will be more of a data scientist, adding value to the business by analyzing data and making recommendations that can help organizations truly innovate.
Listen to Financial Excellence with Game Changers on demand, produced and hosted by SAP’s Bonnie D. Graham, on the Business Channel on World Talk Radio. This excerpt from the March 15, 2016, live show was adapted for the Digitalist Magazine. It is available on demand.
To learn more about how finance executives can empower themselves with the right tools and play a vital role in business innovation and value chain, please visit sap.com/finance for additional research and valuable insights – and join us at SAPPHIRE NOW.
Other readings related to finance transformation: