CONSOLIDATION AT A SINGLE LOWER-COST LOCATION
While shared services consultants and writers are always keen to point out the differences
between centralisation and shared services, for many organisations the consolidation of
dispersed finance activities is often a substantial achievement in itself. The purist shared
services centre advocates may be offended by what they see as a half-hearted approach,
but those who understand the culture and dynamic of organisations are well aware of the
need for change sometimes to be iterative and considered. The relocation of a finance
staff from a large number of dispersed locations is often the first step in the move towards
a more conventional FSSC approach. In many cases, expansion over time has led to a
dispersal of finance staff across a number of sites and this creates problems in terms of
co-ordination and communication. As an initial step, bringing staff involved in finance
activities together in a single location can be a major improvement. While this approach is
not strictly a shared services setting, elimination of the historical fragmentation of staff
and processes can be very valuable in itself. In addition, it is an effective way of freeing
up the expense of fixed assets/real estate in high-cost metropolitan locations in favour of
lower-cost more accessible locations.
Bringing staff from several different finance organisations together at a single location
This conventional approach to shared services involves taking staff from finance functions
across different sites/locations and putting them together at a single location. This
approach is usually modelled on the experience of multinational corporations that have
brought finance staff from around a region, such as Europe, to a single low-cost taxefficient
location. In the case of public sector organisations, shared services often involve
bringing staff from functions based around the country to a single location. Processes are
often reorganised or redesigned for the FSSC, to improve efficiency, and new technology
platforms are put in place. In addition, the move to the FSSC will typically involve the
migration of finance systems from a number of different legacy systems to a new ERP
platform. The main benefits of this approach are savings in terms of staff costs, fixed
assets and IT costs. Under this approach, the FSSC remains part of the existing
organisational structure and has limited independence. Costs are typically allocated back
to the client units. In many cases staff who previously carried out the transaction
processing are offered the opportunity to move to the new location.