The document discusses two perspectives on how shared service organizations should view the business units they serve: as customers or as partners. It argues that viewing business units as both customers and partners is most effective. As customers, business units can decide if services are worth the cost and switch providers if needed. As partners, business units have influence over service design and delivery. The most successful shared service organizations constantly improve service quality and lower costs while collaborating with business units on mutually beneficial solutions.

1. Global
Finance
360
CUSTOMER OR PARTNER?
THE ROLE OF THE BUSINESS
UNITS IN SHARED SERVICES
Author: Stephen G. Lynch
In developing the framework for shared services in an organization, there are
different approaches to how the business units should be viewed. Some
“The most
organizations view the business units as customers while other companies view
successful shared the business units more as partners in a journey. How the Shared Service
Organization views the business units will impact their relationship with the business
service units and the way they chose to deliver services.
organizations are
A Customer-centric perspective
the ones who
As customers, the recipients of services have the opportunity to decide if the services
constantly strive for they are receiving are worth the price they are paying. They can continue their
solid service relationship with the service center or they can go outside the company to obtain the
services if they are better or cheaper. From the Center's perspective, they are
delivery and a competing against numerous choices in the market and they need to be better, faster
and cheaper than the competition.
competitive cost
structure, while From the customer perspective, here are some questions for the Shared Service
Organization to consider:
simultaneously
partnering with the • What services are you providing to the business units?
business units to • What is the pricing model for your services? Will it be based on transaction volume or
on a static driver such as the number of FTE’s in the business units?
create a mutually
• How will the Shared Service Organization monitor its delivery levels to ensure the
beneficial solution.” business units continued satisfaction?
• How will the Shared Service Organization continuously monitor its costs to remain
competitive with outside service providers?
• What is your promised response time for requests? How will it be measured? How
will people be held accountable?
• What new and innovative services will the Shared Service Organization develop to
enhance service delivery capabilities?
SHARED SERVICES RELATIONSH
A Partner-centric Perspective
As partners, the recipients have a great deal more influence in how services are
delivered. They help shape the service level agreements that govern the behavior of
both parties. They are actively engaged with the Shared Service Organization to craft
delivery capabilities and cost structures that will enable the business units to remain
competitive. They are not as concerned with comparing the Shared Service
Organization to outside suppliers, although they are mindful of what the market is
providing and the cost for providing those services.
Global Finance 360 | Copyright 2011 | All Rights Reserved 1

2. From the partner perspective, here are some questions to consider:
About Global Finance 360
Global Finance 360 covers the • What will be the governance structure of the Shared Service Organization? How will
world of corporate finance and the business units be represented?
accounting and how these
activities are impacted by
• How will processes be governed? Who decides on the corporate standard for
globalization. Focus areas
processes?
include Finance Delivery • How will service level agreements be structured? Who determines the response
Strategy, Shared Services, times and what are the penalties for not meeting them?
Business Process Outsourcing,
Process Improvement and • What feedback mechanism will exist to provide the basis for continuous
Organizational Design. improvement?
Global Finance 360 is run by • How is joint accountability created to ensure that all parties are satisfied with the
Steve Lynch. Mr. Lynch is a continuing delivery of services?
Principal in the Finance
Transformation practice of a
global consulting company. He Customer or Partner?
is responsible for the marketing,
sales and delivery of Finance So which is it: Customer or Partner? The choice is a false dichotomy. The truth is that
Transformation services in North it's both. It benefits the company overall when the shared service organization and the
America and serves as a key business units it supports work together to create the right delivery and pricing model.
liaison for his company’s global It works more efficiently when there is on-going dialogue between the parties to ensure
Finance practice. He brings
that any issues that crop up are solved quickly and that the long-term direction of the
more than 15 years of
service organization is in line with the strategic goals of the business.
experience advising global
companies on their service
A key point in maintaining on-going dialogue between the business units and shared
delivery strategies and has
served over 60 clients in a
services is to establish a governance council that ensures the representation and
variety of industries including
participation of the business units. By participating in the shared services governance
consumer product and industrial council, the business ensures that shared services is not just another word for
manufacturing, aerospace & corporate consolidation and bureaucracy. It gives the business units a real voice in
defense, transportation, which services are offered and at what price, how response times are established and
technology, entertainment and monitored, how issues between the Shared Service Organization and the business are
financial services. He has also resolved, and how the SSO will evolve over time to meet the needs of the business.
served as a Controller in private
industry and as an auditor in Although the business units are certainly partners in the shared services model, it's
public accounting. important for the Shared Service Organization to never lose sight of the fact that the
business units are in fact paying for the services and that they deserve to have the
Mr. Lynch is an active content
best service for the lowest possible price. To approach it otherwise would be to regress
contributor on the topics of
Finance Transformation and
to a bureaucratic mentality that was supposed to be eliminated through the move to
globalization and has presented
shared services. Specifically, this means that shared services must be committed to
at various forums including the performing according to the standards established in the Service Level Agreement.
IQPC Shared Services & Issues raised by the business units must be addressed and resolved promptly.
Outsourcing conference. He can
be found on the web at Additionally, shared services must always be mindful that they are competing with a
rd
www.globalfinance360.com. number of 3 party providers that deliver the same services. If shared services can’t
provide a quality service at a competitive price, the company should take a look at
Contact Information: outsourcing those activities. It is this mindset that should motivate shared services to
continuously improve its delivery capabilities to provide the best services at the lowest
Steve Lynch
possible cost to the business units.
Toll-free: +1.800.216.2512
The most successful shared service organizations are the ones who constantly strive
Office: +1.719.481.2599
for solid service delivery and a competitive cost structure, while simultaneously
1042 W. Baptist Road partnering with the business units to create a mutually beneficial solution.
Suite 194
Colorado Springs, CO 80921
slynch@globalfinance360.com
www.globalfinance360.com
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