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Banking

Shared service centres debate: The benefits of centralization

Corporates can see the potential of shared service centres for reasons including compliance and costs, increased back office efficiency and labour arbitrage. However, there is no one-size-fits-all solution.

Delegate biographies: Learn more about the panelists


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Executive summary

• Shared service centres offer companies increased efficiency in numerous ways

• CEOs need to take the lead to bring about successful implementation

• A regional versus central strategy is crucial

• Even single region businesses should have a back-up centre in case of blow-ups

• New technology means smaller companies can get in on the act

JL, J&W Associates What is a shared service centre? What does it include, what does it not include?

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BE, Corning Shared service centres represent the functionality of ERP systems and financial processes that can be standardized. Easy to reach areas are: general accounting, disbursements, collections and asset management accounting. Our centres in Shanghai and Budapest also manage treasury aspects. By centralizing activities you can execute them more efficiently and there is a greater ability to maintain a critical mass of resource and skill, education, recruitment. I would like our in-house banking to be more integrated into the shared service centres but this cannot always be fully achieved in one location as they are dependent on different regulatory frameworks, tools and skills.

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JL, J&W Associates Swati, what drivers do you see?


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SM, Citi Corporates are centralizing for reasons beyond reduced labour costs, including compliance and the need to have centres of excellence that bring together transaction processing, reporting and internal controls. Globalization is influencing thinking about where to locate the shared service centre and which functions are centralized. Mergers and acquisitions have expedited the move to centralization. It is difficult to integrate new companies within a short period of time unless you have centres of excellence.

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JG, Dell Dell’s main driver is getting back-office efficiency through standardizing business processes, creating one centre of excellence. Having everybody located in one area also helps.

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AB, GSK After the establishment of a country SSC, one of our prime drivers was labour arbitrage.


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APR, Deutsche Bank Key factors are cost and the need to gain visibility and increase controls over corporate affairs. Corporate management is helped by the centralization of data, which can facilitate improvements in commercial performance through a better understanding of counterparty relationships, behaviour patterns, profitability and allowing for more informed decision making.

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PD, UPS UPS only recently implemented a standardized ERP platform across our subsidiaries in Europe and this has enabled the accounts payable and general ledger processes to be migrated to a shared service centre environment. An initial advantage is wage arbitrage. There are also benefits in enabling standardized processes and procedures. The synergies of having one shared service centre supporting our business units across Europe allow economies of scale.

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APR, Deutsche Bank From a corporate’s perspective, the cost impact from changes in the banking structure is potentially small when factored against other savings opportunities. The implications within the business are broader and would come from savings that can be achieved, for example, through technology platform rationalization and standardization.

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JG, Dell You might be selling yourself short! It is extremely important. Once you try to centralize an activity, you see how disconnected everything is. A bank with global scale can service multiple countries and enhance efficiency.

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JL, J&W Associates Where does the shared service centre fit at UPS?


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PD, UPS Most processes inherited by the shared service centre were originally managed by finance and accounting, and the centre allows us to implement working-capital policies. Ensuring all suppliers are paid to terms is much easier now. We had already developed the in-house bank concept before implementing the shared service centre. We had a centralized treasury function and a global multi-currency cash-pooling operation. We had our liquidity structure in place, and the shared service centre fitted in with that.

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JL, J&W Associates Who are the banks working for?


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APR, Deutsche Bank Group treasury is our first point of contact. However, it is rare that a bank will convince a corporate to move into a shared service centre. We advise on market movements, corporate best practices and what comparable businesses are doing, and that typically prompts interest. We support the thought process, help the treasury navigate through banking implications and opportunities, highlight where rationalization or consolidation can take place, where automated links can be established and how changes within transaction processing models can fit in with a working capital or liquidity management project. We therefore work for treasury but also the broader business.

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SM, Citi Given strong relationships with technology companies that were early adopters of centralization models, we often play a consultative role in the early stages. Typically, the banking dialogue is with treasury. Procurement, credit control and supply chain functions have become more visible. Some companies have done a good job of linking the broader organization, and others continue to operate in silos. We often see disconnects between liquidity and funding decisions treasury makes versus what the SSC does.

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AB, GSK  Treasury is usually the primary contact.



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APR, Deutsche Bank Once a company launches a centralization strategy, we typically consult with treasury to help define an appropriate banking strategy. Then relationships migrate and corporate project teams including SSC heads, treasury, IT and operational managers become key contacts.

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JL, J&W Associates Surely there has to be a decision at the CEO or COO level?


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BE, Corning Shared service centres are mainly driven by senior management. It normally starts with: ‘Your processes are inefficient – costs are too high, find a way to reduce them.’

Cultural issues

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JL, J&W Associates What were the cultural and business questions for Dell?


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JG, Dell  In each country we have back-office operations that are part of the local finance operation. The decision was taken at the CFO level to centralize back-office activities into a shared services organization. Then it becomes the vice-president of shared services’ job to get that done. You focus the finance staff on value-added work, pricing products and budgeting. You want the local finance function working on higher-value-added activities.

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SM, Citi In some industries, such as consumer and healthcare, CFOs assess what is core, and whether they want to process transactions in-house or outsource to a business processes outsourcer. These decisions are often taken at CEO or board level.

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AB, GSK  Local staff concentrate on customer-facing activities, but back-office functions such as AP do not need to be in the country. This relates to the banking decision. Rather than a GM maintaining a bank relationship, they can be agnostic as to which bank is used. Treasury can negotiate the right banking partner.

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JL, J&W Associates So it does not just save costs, it changes the efficiency of the business.


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APR, Deutsche Bank Cost-cutting related to the marginal transaction fees can arise from economies of scale and should be considered tactical or opportunistic. Larger dividends can be found from business processes improvements. These can be found from economies of repetition, specialization and the introduction of best practices.

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BE, Corning Looking at customer relationships, you take out what you can standardize and control in a centralized environment and without having a severe impact on customers or suppliers.

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APR, Deutsche Bank The more corporates centralize, the more the focus turns to what can be automated. Once processes are automated, the more the focus turns to standardization; in turn, the more standardized processes become, the greater the opportunity to centralize such that there is a virtuous circle.

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PD, UPS UPS only moves administrative processes that can be managed from any location. We have kept in-country all the tasks that involve business decision-making or technical skilled work. We have moved process-related activities to a shared service centre. UPS is culturally very good at process engineering, and the technology associated with moving packages, sorting packages and online tracking has made us into a big technology company, which allows us to automate processes and make them as efficient as possible.

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JL, J&W Associates How do you manage this balance between local and centralized?


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JG, Dell  The work that can be standardized, centralized and performed the same way every time lends itself to a shared service centre. Accounts payable is the best example because that is entirely within the company’s control and should be performed the same way across the globe. Accounts receivable is more complicated because there are different country characteristics, language dependencies and sales differences.

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BE, Corning In Asia, Corning has in some countries few very large, more complex customers, while in others we have smaller customers that buy more standardized products. You normally need to be closer to your complex customers.

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SM, Citi For dollar-denominated companies, the journey is simpler in terms of payments and collections and ability to centralize. For multinationals with global presence and invoicing in local currency in 100-plus countries, creating common processes and a central hub is more challenging.

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JL, J&W AssociatesWhere have shared service centres not worked?


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SM, Citi Resistance to change is a problem. Unless you have a clear execution model, the bottom-up integration never happens. Absence of metrics and lack of clear measures for success can also be a problem. The single instance or standardized version of ERP is important because if cost is the big driver but you have to connect to multiple banks, you will have rising technology costs and processing inefficiencies. We have seen cases where lack of technology and workflow planning led to the company abandoning the model and becoming decentralized again.

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APR, Deutsche Bank A shared service centre may not fit all business profiles. You could have payment factories where only the accounts payable is centralized, or a financial shared service centre where not all of the receivable processing is brought in. There are different levels of centralization. Corporates should not think that until everything is taken out of the back office and put into one place, they have not achieved success. It goes back to defining the metrics and looking closely at the business model.

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PD, UPS We are in the early stages. We have moved 30% of processes from the country to our shared service centre environment. We have taken the low-hanging fruit first, with accounts payable, billing, general ledger, expenses – and the message coming back is that there would be a danger of taking too much too quickly.

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SM, Citi Yes, over-consolidation within aggressive timelines can lead to problems such as staff turnover, drop in service standards, etc.



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BE, Corning Executive management needs to give only one option, and that is ‘do it’. If businesses have the right to opt out, it will not happen. There needs to be successful change management and enough funding and critical mass of resource to complete the roll-out. You need to standardize what you’re doing to gain the expected efficiencies upfront. Putting the old structure into a new box will not work.

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SM, Citi We have seen regional shared service centres work extremely effectively, primarily for accounts payable and T&E. We also see payroll attempted, although there can be hiccups. HR and support functions are often centralized as well. Some companies look at cross-border flows for treasury activity and try to centralize those payment flows first. We are seeing a re-emergence of regional or global payment on behalf of in-house bank-related structures for large corporates that have established shared service centres.

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APR, Deutsche Bank It is illuminating when clients realize the extent to which they are behind peer group companies in treasury and cash management. Significant savings can be found through these centralization projects, both at the banking level and within the business. It is not the size or the nature of the business that determines whether there is a good or bad case for centralization but how great the savings potential is, based on the technology platform and or operating company complexity combined with banking practices.

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SM, Citi Technology has been a huge enabler. Years ago, size and volume of transactions made a difference. However, with the advent of the internet, a small company can still achieve centralization benefits without a complex technology investment.

Pulling it together

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JL, J&W Associates So how do you pull it together?


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JG, Dell  Geographical proximity is important, as is language. We have five shared service centres. Malaysia covers Asia-Pacific-Japan, Panama for Spanish-speaking Americas, Casablanca for French-speaking Europe, Bratislava is German-speaking, and India is English-speaking. Uniform IT systems are important. The ERP is crucial as are other related systems that may not be linked entirely to ERP, for example the sub-ledgers for accounts receivable and accounts payable. We have one ERP system globally. But the internal systems need to be uniform, and banking platforms should be as similar as possible. We work with several banks, but we have been able to minimize the infrastructure we’ve had to build to connect to our banking systems, and that has allowed us to simplify banking structures and reduce the number of banks that we need to interact with.

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JL, J&W Associates Does each shared service centre carry out the same thing?


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JG, Dell  No. They focus on different things. There is a global centre for accounts receivable. We split up the accounts payable between factory and non-factory. Our factory piece is in Penang, and our regional accounts payable functions are in the regional centres because there are regional differences.

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PD, UPS We have three centres for Europe. One covers billing. Our second centre in Poland does accounts payable, general ledger and some ancillary work. We also inherited a shared service centre through an acquisition. That is in Pennsylvania and supports Americas and Europe. There are advantages in having a centre in the same time zone as the business units and to have local-language-speakers because of the interaction with vendors or customers. We have also chosen locations where there is a good supply of highly educated employees.

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JL, J&W Associates So you still need to be near the local businesses?


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JG, Dell Yes, but the management of the shared service centres as a whole is global. We have a centralized global financial services organization that looks after all of the centres and they have centralized reporting lines, and as a result their goals are to standardize processes.

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SM, Citi For continuity of business, although you might have regional centres by function or geography, you need back-up sites if one goes down. You need a global governance/process management function rather than each centre operating independently. You need a governance body that looks at how to transfer best practices, ensure continuity of business and maintain standardization. When the Sars epidemic broke out in China, companies that had global shared service centres could not get staff into the processing site.

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BE, Corning You also need to find countries with the right regulatory framework.




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JL, J&W Associates So, it is not just location but common management and common standards?


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AB, GSK We struggle with the fact that we have multiple ERP platforms. The challenge will be to drive offshoring and centralizing. The tech companies started with a clean sheet of paper, whereas we have a legacy that we are having to evolve from.

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JG, Dell  We have made some acquisitions and we are working through that.




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JL, J&W Associates Are you migrating them to the single platform?


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JG, Dell You cannot sustain multiple platforms in the long term. Everyone knows we will need to make the IT investment to bring about the common platform. It’s a question of when.

Need for back-up

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JL, J&W Associates If you were a multi-country operation just in Europe, would you have one shared service centre or at least two because of the back-up issues?

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APR, Deutsche Bank Some companies have one per market. A large advertising company with hundreds of subsidiaries may have the critical mass to warrant a single-country shared service centre, because it will eliminate duplication. Rationalizing down to a single shared service centre is more effective arguably from a cost side than maintaining multiple shared service centres. It goes back to the culture, technology, the company structure – and the appetite.

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SM, Citi Some companies have a shared service centre for the eurozone and look at other currencies separately. Or they put English-speaking countries into one hub, and have Middle East/Africa and CIS as separate clusters. In China or India, you could have just a country-level SSC because you have multiple clearing systems, multiple bank accounts and the market is huge. You end up with a single-country model that handles all the complexity in a specific market.

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BE, Corning It is a risk to run just one shared service centre without adequate business continuity cover as your whole business could be negatively impacted if the centre fails. You are better off with at least two that are standardized.

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JL, J&W Associates I am worried about these nirvanas that are always five years away. What do you do now to make your shared service centre efficient?

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BE, Corning We had already started to roll out our regional banking structures when Swift started making noises. We decided not to touch it because you cannot just chop and change as you go along. We will most likely evaluate the Swift products next year as we start on a banking structure review for the Americas. I do not see a need to rip out what I have today. I can see Swift becoming a standard, like Sepa, but a lot of banks have not even got the full product set available yet. We would consider rolling Swift out in the Americas first, and if that is successful, we would consider a roll-out into the other regions.

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PD, UPS UPS’s strategy was to deploy as standardized a technology as possible, which was fully fungible, portable between banks. In terms of the connectivity we started using the first bank’s preferred encryption standard. But being a big IT company, our IT and data security people had a problem with that. Everything had to be certified and they didn’t know that encryption software. We decided the simplest solution would be a standard gateway to all our banks going through SwiftNet. That was after we had gone through the pain of implementing our first bank. The next bank we implemented we decided to deploy SwiftNet.

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JL, J&W Associates When you implement a new shared service centre, is that the time to standardize all the differences between the banks?

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PD, UPS Absolutely. A lot of people advised us that implementing SwiftNet would be difficult from a technical and documentation standpoint, but it was straightforward. We reached out to all our core banks and a few technology companies. We selected a Swift service bureau that could use our existing connectivities, encryption standards and IT infrastructure, and connect between the SSB and UPS, and it would do everything else. We have had no down time, and we have been using the SwiftNet Score model to connect with banks, with very few issues.

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JL, J&W Associates John, you started from having a single ERP system. What else have you done?



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JG, Dell  Recent efforts to develop technology are the most exciting and overdue in cash management. For the first time we have banks, corporates, IT companies and clearing houses coming together to find a better solution to cash management, payments and receipts. I cannot wait until we implement Swift Score. There are complications but on the horizon is the solution that will standardize all of the bank communications.

Technology benefits

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JL, J&W Associates Are there other processes or technologies that improve internal efficiency?



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PD, UPS The number one requirement is to get commonality of ERP system across all the business units as well as the shared service centre, as we have done in Europe.

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BE, Corning Once you have the ERP system, your collection of paper or data comes in. Then you have the governance structure of who approves what. A lot of corporations are still paper pushing. There are electronic tools that work to optimize that structure, and there are lots of synergies.

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SM, Citi With digital identity, a corporate can look at workflow and additional authentication and security in processes. That technology is already here. The more mature shared service centres are also working on new areas for value-added activity such as straight-through reconciliation on incoming electronic payments as well as other payment types.

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APR, Deutsche Bank Banks are going to be increasingly judged by their ability to deliver consistent robust information – same format, field, manner and method of exchanging information – in an increasingly real-time manner back to corporate platforms. With middleware or ERP platform developments within shared service centres, corporates realize there is significant scale to improve straight-through processing rates and these metrics will be increasingly critical indicators of performance.

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JL, J&W Associates Reconciliation is only effective if enough information is associated with the payments.




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PD, UPS Many countries still have a high number of paper remittance advices and cheques coming in. We have asked our banks to provide all of this information through a lock box or electronic processes in one standard file format. They can do it, but no cheaper than we can do it ourselves. We have people opening the post, reading the remittance advice and keying it into our accounts receivable system. That is cheaper than moving everything towards a centralized platform.

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JL, J&W Associates The balance between local and central is critical, and it is a cost-effective balance that will change. But don’t centralize to something that is more expensive.

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SM, Citi If you acquire another corporate and the scale of the local operations dramatically increases, you may not be able to sustain that operation on a local basis. Volumes may grow to the point where there are not enough staff locally to handle the increased flows. Some companies move to the collections factory-type thinking, where physical collections flows continue as is, but information management and some of the creditor management is done through a central hub. So you split the manual collection flows from the cash application and information management.

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BE, Corning A lot more work can be done to eliminate the paper-based payments and ensure your customers and suppliers provide you with the information. In Asia we made a real effort to eliminate anything paper-based and forced things to become electronic as regards banking activities. It is part of shifting technology from manual activity to digital. This is driving the use of technology to its optimal sense.

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PD, UPS It depends on the country, though. In Italy and France you cannot force that on customers.




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BE, Corning You can see interesting results once you start talking to customers and suppliers, even in France and Italy. The incentive for customers and suppliers is that the relationship can become easier.

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APR, Deutsche Bank Your ability to exert influence depends on your position in negotiation as the collecting party. If you are the key supplier to that counterparty and you insist that they change the way that they remit or that money is collected, that creates the opportunity to change.

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JL, J&W Associates What are you doing in implementing and managing structures for receivables factories or collection factories?



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PD, UPS There are big cultural differences in Europe in terms of approaches to collections. It is customer-facing so you need to have local native speakers in each language.

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BE, Corning Payment information is routed to our shared service centres and each does collections as well as payables. The cash application is mainly based on the electronic bank statements that come in. If interaction with the customer is required, that’s often managed locally because they know the customer better, they know if there are any local issues, and they speak the language.

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AB, GSK  GSK still handles all receivables locally.



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APR, Deutsche Bank We have not yet seen big payment factories operating payment-on-behalf structures migrating that into a collection-on-behalf model, though this is clearly an interesting area for our corporate clients. Discussion is starting, within the context of Sepa and pan-European direct debit next year, as to how that can be adopted. A number of clients have taken the payment-on-behalf model to rationalize their banking structure and simplify liquidity. But it will be interesting to watch the development of Sepa following its very successful start and the forthcoming introduction of the pan-European direct debit.

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SM, Citi You may be doing a fantastic job on payables, but if you do not have a good view of receivables, your DSO is going to impact your working capital. It is still more a concept than a reality in terms of full-blown collections factories, but a lot of companies are centralizing management of invoices, accounts receivables matching, cash application. There are qualitative factors around customer behaviour and payment behaviour. There is also the issue of how much information you can centrally manage. Most companies don’t have one overall customer or debtor database. Some supply-chain organizations are working on what can be done to move the needle on the receivables side. Getting DSO down by a few days can lead to dramatic savings. E-invoicing will fuel this. As the market moves towards more richness of data on the receivables side, the idea of centralized processes for receivables will become more centre of plate. It’s in the ‘too hard’ basket because many corporates assume there are internal challenges and that they will not be able to add value.

Where’s the strategy?

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JL, J&W Associates Is there an implementation strategy here?




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AB, GSK  It starts with the profile of your receivables, in terms of instruments used by your counterparties and to what extent you can impact change. Once you are in a dematerialized environment, you open up opportunities to centralize management of the information.

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SM, Citi Receivables are fundamental to how you do business, so from a strategic level, you need a corporate directive from the top that sees this as important from a working capital perspective. You can’t get this done by traditional process efficiency or centralization arguments, because it has to be a key performance indicator for everybody.

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BE, Corning There is an efficiency aspect too. There are issues around invoice dates, billing dates and shipping dates. Accuracy on the invoice is important. Fine-tuning can shorten the lead time to getting the invoice out as the goods are leaving, and having the efficiency to deliver that invoice to the right person.

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SM, Citi One of the best projects we have seen was led by credit control in conjunction with treasury. They established joint business goals early on and it filtered down from there.

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AB, GSK  You have to position this around working capital management. That is the language that resonates with the senior, finance-related, positions.

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PD, UPS Our largest customers prefer to have one centralized bill which covers all activities and shipments across Europe. UPS has done a lot to improve collections and reduce working capital tied up in accounts receivable. The biggest initiative was to improve billing quality and accuracy, taking away the reasons for non-payment and reducing the invoices with an outstanding query. That required engagement from all parts of the business. We have made tremendous gains there.

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JL, J&W Associates Is the shared service centre the driver?




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PD, UPS It is a strategic initiative. We recognized this was an issue for our small package express, the traditional part of our business. We moved to a centralized billing location with one platform. The strategy across Europe was driven down from the centre to each of the countries so everyone did their bit to improve billing quality. That is the biggest driver for UPS, as well as peripheral activities like incentivizing customers to move to direct debit.

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JL, J&W Associates I love Shell’s model; the tanker delivers the petrol and the moment it leaves the forecourt the direct debit is initiated because the driver presses a button. That is ultimate cash-flow.

What functions and services do you think will be in the shared service centre in five years’ time?

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AB, GSK  A lot of functions can be virtual. You can do these locally while core processing takes place in a centralized area. The value-add comes in once data is centralized, in terms of leveraging it and having all that information together. Labour arbitrage is going away whereas gains from standardization and automation are more permanent.

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PD, UPS The speed with which technology comes on line will determine whether or not we push to lower costs in parts of the globe and push wage arbitrage. Technology will take over or we will continue to move towards a globalized shared service centre. I am not sure which way it will go.

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AB, GSK  The other area is the potential for financial accounting, which is to some extent rule-based and can be undertaken within a shared service centre.

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BE, Corning Technology will shift the focus away from having all of the resource at the shared service centre and it will become more flexible. With the right technology, a SSC could outsource some activity to a different location without shifting the legal entity. You will be able to plug-and-play even more as long as you get the right skill profiles and manage that resource efficiently. Standardizing non-vital business information is not a high risk. Shared service centres will become more virtual and more concentrated towards BPOs.

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APR, Deutsche Bank There are already clients operating payment factories where they have outsourced the transaction process including payment file generation, uploading and transmitting, but the local entity and/or finance teams can still come in and validate, sign or secondary sign files through the internet. The idea of a virtual payment factory using the internet has been in place for some time.

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SM, Citi We are likely to see increased collaboration between corporates, banks, ERP systems providers and BPOs to enable more virtual SSCs to be in place. I would expect to see further trade and cards processing along with AP and AR functions in the years ahead.

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JL, J&W Associates What banking services can you offer these increasingly centralized organizations?




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APR, Deutsche Bank The centralization of the trade finance flow could be further integrated, with 75% to 80% moving to open accounting, and with supply chain, financing-related processes within corporates becoming increasingly centralized. Country-driven practices could be replaced by regional or global practices. You also have to consider the evolution of the banking market as much as the evolution of shared service centres. There is consolidation with some banks looking at transaction processing as a long-term strategic business and making the associated investments versus those that are not. We are focusing on client onboarding and corporate enablement solutions, irrespective of technology platforms. Swift will have further application in the corporate market, but it will not be the panacea for all.

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JL, J&W Associates What are you doing for companies as they become standardized?




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APR, Deutsche Bank We are information consolidators and information providers, intermediating on behalf of clients to provide critical services to aggregate risk and facilitate financial exchanges and settlements. The more standardized companies become in their operations, the greater the need for consistently delivered, robust and timely information to feed the corporate business machines, combined with the provision of ever more customized, customer-specific metrics to reflect relative performance.

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SM, Citi A shared service centre has to absorb a huge amount of information – differences in clearing systems, regulatory frameworks and local practices, so there is a huge advisory, training, consultation piece that will be critical in terms of the partnership with a bank.

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JL, J&W Associates Does that mean you will start to charge for it?



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SM, Citi No, it is part and parcel of our packaged offering. The shared service centre mantra will move from ‘cost optimization’ to ‘business enabling’. So banks like us are focusing on the need to give SSCs analytical tools, workflow efficiency tools and better visibility of what they support. A lot of small and regional banks are looking at outsourcing to larger-scale players. Over time BPOs will have more flexibility and agility to support corporates wherever they seek services. You will get the geographic proximity to your own markets but you will get an organization better able to manage cost as well as move things around. There will be more collaboration too. Most corporates have already done the plain vanilla AP centralization. One of the reasons BPOs such as Accenture, IBM and HP have done well is that looking at Russia, Brazil and China, the complexity is overwhelming. Combined with banking partners, they bring a level of efficiency gain from a purchase to pay perspective that some corporates are struggling to establish themselves.

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BE, Corning As a corporate you are interested in doing what you are good at and you want to outsource the rest. You can do a lot on the internet. You can set up your own web store quickly and these concepts will come into play.

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SM, Citi The technology will allow you to keep the level of control you want but it is taking away some of the pressure of maintaining the centres.

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PD, UPS Why give up the savings associated with the automation potential when, as technology becomes more available, we can make our own savings? When we have automated as much as possible, then we may look to an outsourcer.

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SM, Citi More companies do not have the bandwidth with their IT resources, so while the technology is out there they are not able to leverage it because their IT teams may have other priorities.

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AB, GSK  There is also the potential to undertake improvements in a lower cost environment, where you have the opportunity to improve processes without the previous associated legacy.

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BE, Corning If you have an inefficient process do you really want to outsource that at the cost level you have? Absolutely not. You want to know what you should pay for this service, and you need to monitor that.

Control nightmares

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JL, J&W Associates The more you have outsourced to different suppliers the less control you have. It is the management and control of these processes that give me nightmares.

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BE, Corning It makes a difference if you are an established corporate rather than a growing company. But the changed management controls around how to move into that outsourcing environment are key, and how to maintain enough control and skill to know when this is done correctly. You also need to know the terms and conditions to transition this back in-house if you want. The contractual arrangement becomes a key focus.

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APR, Deutsche Bank There are companies running eastern Europe-based shared service centres using the BPO solution for a transition period, to manage the introduction of the processes and the transition whereupon it will be brought back in. The outsourcing route does not have to be a be-all and end-all.

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AB, GSK You have to work with your BPO partner to leverage the relationship to drive further improvements.



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JL, J&W Associates Centralization works, but it has to be combined with keeping the valid activities local wherever it makes sense.



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BE, Corning It’s important to take full advantage of technology as you progress.



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SM, Citi Shared services initiatives should be seen as strategic rather than tactical. The key performance indicator should be high-quality management of end-to-end financial supply chain information through an organization rather than how many payments or receipts were processed. The real value comes in enhanced working capital management.

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APR, Deutsche Bank Considerations around centralization should not be exclusively driven by cost. The discussion should include the benefits that can be gained through increased controls and process improvements that touch on areas outside pure cost-related considerations and into the broader business performance and corporate accountability.

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JG, Dell Executive support is crucial. It is also important to ensure the continuity of management from localized back office to the shared service centre. Do not sell yourself short. Make sure that you get the highest-quality staff available.

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PD, UPS You need buy-in at all levels of the organization, and from the business units where you transfer work. They need to agree with the critical success factors and what is expected of them as part of the project.

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