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Shared Services Design and Governance Structure

Introduction

The Shared Services model, when you include more recent descriptors like Global Shared Services, Global Business Services, and Global Integrated Services, has been a staple of large global companies for decades. Looking at a profile of member companies participating in collaborative best practice research to discover leading practices paints a picture of a Shared Services landscape dominated by large companies who often have global business operations.  

Regarding company size, 49% of Peeriosity member companies have over $10B in annual revenue, with 25% between $5B and $10B and 24% in the $1B to $5B range.

When considering the number of company employees globally, the figures are equally impressive, with 11% Peeriosity of member companies having over 100,000 employees, 19% with 50,000 to 100,000, and 49% with 10,000 to 50,000.  Profile results suggest that the larger the company, the more likely the company is to embrace some form of Shared Services delivery model.

While the overwhelming majority of member companies operate in many countries around the globe, when you consider the geographic design for Shared Services, 30% of member companies have a global design, 33% have a multi-regional design, and 27% have a regional design, with 22% indicating a design that is country specific.

It is also interesting to consider the current lifecycle stage of Shared Services at member companies.  Today, while 13% of members report that they are “New & Emerging”, 35% report that they are “Fully Operational”., An additional 44% indicated their lifecycle stage is “Mature” and 6% selected “Advanced”.  In other words, most Peeriosity member companies have many years of experience with implementations that are largely complete and stable.

When you consider the structure of Shared Services organizations, 54% report that they are “Cross-Functional” with an additional 42% reporting that the are organized by “Single Function” (for example, HR or Finance), with only 2% organized by “Single Process” (for example, an Accounts Payable Shared Services Center or a Payroll Services Center).   If you were to track this result over time, you would see a steady shift from “Single Process” to “Single Function” and from “Single Function” to “Cross-Functional”.

iPollingTM Results Review

A recent Peeriosity poll created using the iPollingTM technology was created to explore the governance structure companies use for setting the strategic direction and vision for Shared Services.  The results indicate that, for 40% of member companies, the Shared Services Leader has autonomy for setting the strategic direction and vision, with an additional 40% indicating the governance structure was with the CFO (28%) or someone else in the C-Suite (12%).  Here are the details:

When examining the degree Corporate, Operations, and Shared Services are aligned to a common strategy and vision for the Shared Services organization, 30% indicate complete alignment, 30% choosing general alignment, with the remaining 40% selecting either “Somewhat Aligned” or “Changes Taking Place that Require Realignment”.

Poll comments from Peeriosity members on this topic include:

  • Shared Services strategy is completely embedded in Corporate strategy.
  • Our vision was initiated based on the overall global HR strategy, proposed by the HR Shared Services team and approved by the top team of HR.
  • The Shared Services Leader sets the strategic direction based on the demands and current/future requests from customer groups.

Closing Summary

Shared Services as an operating model has been in existence for decades and, today, is widely embraced by large global companies.  Even though many companies have extensive experience, even the leading companies continue to make changes to their designs and take advantage of new opportunities to drive process improvement and business process transformation.   With the move to Shared Services, the increased volume of transactions in one organization adds complexity, but also provides greater opportunities for focus and return on investment. 

What is the status of Shared Services at your company?  What does your governance structure look like, and how aligned are Corporate, Operations, and Shared Services to a common strategy and vision for the Shared Services organization?

Who are your peers and how are you collaborating with them?

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 “iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPolling.

Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers.   Membership is for practitioners only, with no consultants or vendors permitted.  To learn more about Peeriosity, click here



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