FIS Modern Banking Platform
Advance your bank with a modern core platform.
February 02, 2017
A large majority of multinational corporations have financial shared service centers but their objectives and the way that they operate continue to change as these functions mature. For example, a decade ago, most shared service centers were focused on reducing operating costs, particularly by creating economies of scale in personnel and systems. By its nature, this objective positions the shared service center as an operational function, rather than contributing to the business at a more strategic level.
This is changing, both amongst new and established shared service centers. Today, while managing costs remains a priority, this is more a consequence of standardizing financial processes and implementing best practices than an end in itself. In a recent FIS market study, 67 percent and 65 percent of survey respondents respectively noted these as key objectives, which in turn lead to increased productivity and the ability to deliver greater visibility and control over financial and information flows.
What is increasingly becoming clear though is the extent to which shared service centers can contribute to cost and risk reduction in a broader sense, i.e. not simply focusing internal operating costs, but external costs and risks too. This includes more ‘obvious’ savings such as rationalizing bank relationships and connectivity, but also taking a more proactive role in changing supply chains. Companies in all industries are expanding their international focus, and many are adapting their sales and distribution models in line with changing e-commerce and m-commerce opportunities, such as direct selling rather than working through agents or distributors.
These shifts in corporate behavior have implications for the financial supply chain and also a company’s credit dynamics. Consequently, shared service centers have an increasingly important role in providing a consistent approach to credit and collections across markets and customer segments, leveraging efficient collection methods wherever possible. By doing so, not only do they help to strip out costs in the supply chain and accelerate collections, but also reduce credit risk with the associated costs.
While organizations operating regionally often have a single shared service center, our survey emphasizes that corporations operating globally will typically have two or three regional shared service centers. For many, achieving a single, global shared service center was often an early objective but as the strategic role of shared service centers within the wider supply chain has increased, proximity to the business units that they support has become more important to build relationships with these businesses, understand the business culture in each country, and keep up to date with regulatory and market developments. At the same time, by leveraging common processes, policies and technology platforms, corporations retain the ability to optimize productivity and visibility and control over global operations.
Let's work together to reach your goals. Contact us at the links below and a representative will be in touch.
Your experience is our top priority. We’re here to help.Learn more