The accounting activity is a production activity, as any activity must tackle the improvement of quality, while reducing costs and delays. The creation of a Shared Services Center (SSC) is an organizational response that is widely implemented in companies today.
Shared Services Center & CSP
When a Company sets up a CSP, what are its main Expectations? From an operational point of view, 3 areas of improvement are expected from a CSP in terms of the performance of the accounting function:
- Professionalize the accounting function: in a context of increasing complexity of regulatory standards, the specialization of activities appears to be a response for more skills and security in the activities carried out.
- Homogenizing practices is clearly a way to improve efficiency and productivity, but also a way to reduce the time required to produce financial information.
- Reduce costs and in particular payroll costs which represent about 75% of the costs of the function.
Clearly a CSP seems to answer the constraints posed by the equation: Costs + quality + delay = performance
Are the Positive Impacts of Creating a CSP always Present?
Different studies agree to recognize an improvement in quality. This quality results in a better reliability of the accounting and financial information, a better control of the production and deadlines for the provision of the optimized accounting and financial information. These results can be achieved by optimizing processes and organization. Indeed, the establishment of a CSP requires a complete review of organizational processes and necessarily in logic of progress and improvement of efficiency. Generally, this return is not immediate because it must go through a period of implementation and running in but is reached as soon as the CSP has acquired a certain maturity.
The establishment of a CSP profoundly changes the management of human resources. It makes it possible to increase the professionalization of the accounting function by specializing accountants. It also makes it possible to organize business sectors and to offer career paths within the accounting sector. It responds to the challenge of professionalization and opens the way for progress for a more affluent accountant, since the size of the CSP is by definition greater than that of the accounting departments of a company.
Finally, a reduction in costs is reached even if it can be often below expectations or at least reached over a longer period.
What would be the main Negative Points?
Two important points are frequently mentioned. First of all, a lack of variety of the activities of the collaborators linked to a reinforcement of the specialization and to a certain “Valorization” of the tasks. This can lead to some fatigue and a possible loss of team motivation.
- Then a distance from the operational activities and the feeling of a certain partitioning
- Two aspects almost inherent to the creation of a CSP that can probably be mitigated by the implementation of a real “customer” posture
- The logic changes, the accountants must adopt logic of providers and consider differently their relations with the operational entities.
The human Equation at the Heart of Success
The human dimension is the main difficulty at the time of a project of creation of CSP but also beyond during its operation. At the time of the creation, like any project of transformation, the keys of the success are:
- Anticipation of social implications
- Communication and dialogue throughout the project
- That which accompanies change
Then, over time, the challenge remains to professionalize and specialize while avoiding partitioning and opening up opportunities for employees to evolve. It is about promoting mobility to create real career paths within a CSP. This is undoubtedly one of the most positive points for an employee to open mobility areas more easily within the function even if the realization sometimes faces difficulties including geographical mobility. In conclusion, the CSP is an organizational response to the current challenges of professionalization and competitiveness. But the game will only be won if human issues are not forgotten.
Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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