Finance Fails to Get Full Value from Shared Services

A lack of commitment to working as partners with shared services organizations dooms finance to missing out on optimizing the value of shared servi...
David McCannMay 22, 2019

If finance departments aren’t getting what they want from their company’s shared services organization, they might want to be careful about pointing the finger of blame.

So suggests new research from Gartner, in which less than half (49%) of the 1,500 surveyed finance officials reported being active partners with and serving as advocates for shared services.

This lack of commitment correlates strongly with some costly outcomes for businesses. The other 51% of survey participants experienced 29% more service disruptions, had 19% more complaints about shared services, and were five times more likely to experience delays in implementing a new service from the centralized services unit.

CFO Insights on Inflation, Workforce Challenges, and Future Plans 

CFO Insights on Inflation, Workforce Challenges, and Future Plans 

Download our 2022 survey report for a high-level view of finance team projections and strategies, directly from our executive readers.

Among the less-engaged finance staffers, Gartner characterized about half of them as “indifferent” — they understand the reasons for shared services but aren’t convinced that the benefits outweigh the drawbacks.

Worse, the rest of them are “resistant”— they believe the shared services organization doesn’t fully understand finance operations and can’t deliver services as well as finance can do on its own.

According to Gartner, finance departments must show commitment to the shared services organization to derive maximum value from it.

“CFOs and finance leaders must get better value from shared services and accept that their commitment is vital to delivering on cost optimization goals that often are part of a shared services strategy,” says Gartner director Sanjay Champaneri.

The “most powerful” objections to shared services, reported by 58% of survey participants, relate to loss — of jobs, information, and finance departmental control over key processes. “Finance leaders have a vital role to play in helping shared services address these concerns,” Champaneri says.

Poor communications from shared services don’t help bridge the gap. Among 50 shared services leaders who were surveyed, just 6% said they consider their organization “highly effective” at increasing finance’s commitment to shared services.

And exactly none of the 1,500 finance team members said that shared services’ communications were their primary source for developing opinions about the services.

“The key to developing commitment is openly and objectively communicating the total impact of working with shared services, without trying to sugar-coat or omit the bad parts,” Champaneri observes.

Evidence suggests that finance does indeed have good reason to work closely with shared services.

According to a Deloitte survey released on Tuesday, 68% of the 379 participating companies said they realize an average annual productivity boost of at least 5% from their shared service centers. For 28% of the respondents, the productivity premium is at least 10%; and it’s 15% or more for about one in eight (13%) of the companies.

4 Powerful Communication Strategies for Your Next Board Meeting