From his position of having more than 15 years’ experience working with global finance leaders and helping acquire finance leadership talent for large corporations, Adam Akbar, founding partner of Bronzegate, is well placed to explain the challenges that need to be overcome and identify the talent to do it when migrating to a shared service centre (SSC) structure.
Most CFOs that I have encountered would agree that the long-term effect on the finance team culture following a shared service implementation is positive.
Given the increased strategic responsibilities of the modern day CFO, the separation of finance process from financial partnering through an SSC structure typically encourages a welcome climate of deeper analysis, more meaningful interaction with the wider business and a ‘value-add’ focus among the CFO’s commercial finance team.
Idealistically, the members of the CFO’s shared service function will support this more-engaged commercial finance team through the adoption of a culture-focused on customer service, cost consciousness, efficiency and collaboration.
These two groups of quite distinct finance professionals will work effectively and in tandem towards the common goal of financial management excellence.
This panacea is only reached after a period of transition, and the CFO has to contend with the reality that not all finance staff will adapt to the new environment.
However, this panacea is only reached after a period of transition, and the CFO has to contend with the reality that not all of their finance staff will be able to adapt to the new environment.
For commercial finance staff, the change will facilitate a shift in role focus, from predominantly conventional management reporting and analysis to more detailed insight provision, while transactional and reporting staff who move to the SSC will work remotely from business units.
Many CFOs will therefore encounter resistance to change, inflexibility and skills gaps that may negatively impact the organisational culture – disaffected and unprepared staff, if not managed effectively, can undermine the success of the transformation.
Sometimes, resistance to change can also be demonstrated by some business unit leaders as they grapple with a perceived lack of full ownership, while other business unit leaders can feel emancipated by the support an SSC brings.
A major challenge for any CFO will therefore be to not only implement an SSC but to also make it work from a people perspective while obtaining the buy-in of key business stakeholders.
Another key consideration for forward-thinking CFOs on the impact of an SSC implementation is that of inadvertently building two finance cultures, one in the SSC itself and the other among the business partners.
This cultural disparity is even more of a possibility in organisations that have an extended business services function that also incorporates non-finance tasks such as HR and procurement.
While Service Level Agreements foster a client focus within the SSC, they can serve to heighten the ‘them and us’ sentiment between the SSC team members and finance business partners, which is only accentuated by the differing people-profile of both camps.
One of the biggest challenges for CFOs is therefore to encourage a unified finance culture, based on shared values, approach and a consensus towards the wider finance agenda.
Talent management takes a different slant for CFOs when undertaking a shared service transformation. A recent survey of CFOs operating in global organisations that had an SSC reported 79% felt talent management was a high priority, while 73% did not have a definitive talent programme in place.
As time is generally at a premium with the intensity and variety of projects on a CFO’s table during a period of such dramatic change, the talent management agenda can clearly become de-prioritised.
However, talent management is particularly critical, as effective strategies encompass not just deployment but key factors to a successful transition including skills-training, retention, motivation and succession planning as well.
There is an inevitable skills shortage – in particular with respect to technical process experts and shared service specialists – prior to an SSC implementation, which explains the high incidence of contractors involved during such projects.
Clear communication, unified leadership and a cohesive vision are required to launch a shared service function but are also necessary to inspire and then successfully manage the transition of personnel into new roles.
CFOs need to ensure that full impact analysis is undertaken for this migration, taking into account the skills and experience required at business unit and SSC level to make it work.
Cross-fertilisation to drive the agenda
As former colleagues within legacy finance functions begin to have lines of demarcation between themselves to ‘customer’ and ‘service provider’, CFOs face the challenge of having an integrated talent management strategy that allows specialists to excel while not limiting progression opportunities.
Effective talent-planning and management is intrinsically linked to leadership and fostering the right culture, never more so than in an organisation going through a shared service transformation.
Indeed, it can be argued that one of the biggest management challenges is to devise a platform allowing shared services professionals to progress to business partnering roles and vice versa with no impact on business performance.
An example of how this can be addressed is seen at GlaxoSmithKline, where they have been adept at encouraging this cross-fertilisation of talent by migrating experienced leaders from other business areas to help drive their SSC agenda.
This allows for a broadening of individual skills-capability and a wider understanding of shared service management across the leadership community.
The importance of executive search firms
Alongside external sourcing, organisations employing best practice SSC methodologies have engaged in ongoing skills assessments of staff to determine their flexibility and suitability for roles.
It should be recognised that these staff will be placed into an environment of constant, accelerated change management and innovation that will require optimal performance across every single aspect of the finance function.
Executive search firms are important components of an effective talent attraction strategy for companies experiencing this level of change.
It is important that chief finance officers, human resource leaders and other internal stakeholders are synchronised with their external partners to ensure that the demand of the business are met with respect to not only finance skills criteria but also the types of leadership profile required.
Among the searches I have conducted for organisations in transformation, business finance leaders are required to have more strategic capability, technical experts must have a greater eye for process efficiencies and shared services leaders are increasingly expected to have commercial finance credentials allied to significant people management capability.
Underpinning all of this is the requirement for finance leaders to have exceptional stakeholder engagement capabilities, the ability to drive successful change and to always identify with the greater corporate agenda.
An important aim of the CFO is therefore to ensure they truly understand what talent they have at their disposal, and then provide them with the support and training they need to reach while instilling metrics to measure optimal performance for each role.
Effective talent-planning and management is intrinsically linked to leadership and fostering the right culture, never more so than in the case of an organisation going through a shared service transformation.
Talent and culture should be high on the priority list of any shared service steering committee, and management across the business should be unified in their approach to both. Only then can shared service functions deliver to the ever-increasing business expectation.