Finance – a move to shared services
From the National Computing Centre, Manchester UK.
For issue 30th April 2010
As companies struggle with uncertainty, both in the general economy and their particular marketplace, the finance department is facing increased demand for improved management information, cost reductions and efficiency savings. This is according to new research commissioned by the Evaluation Centre, a service from the National Computing Centre designed to help purchasers select enterprise IT applications (www.evaluationcentre.com).
The main business drivers for recent developments in financial and accounting systems are to reflect the continuing changes in business processes and procedures, mentioned by 75% of respondents, and the need to make cost savings (56%). Improving management information to allow enhanced decision making (44%) and enhancing customer focused processes (44%) are also key aims.
These four areas are also seen as the primary drivers for change over the next two years, although increased use of the internet and e-commerce capabilities (30%) will also be a significant factor.
To address these issues, the creation of shared service centres is gaining in popularity - with 31% of organisations adopting this approach, a further 5% are in the planning stage and 2% evaluating the option.
Shared service centres allow tasks previously performed locally by divisions or business units to be re-engineered, streamlined and centralised. This has the advantage of offering cost benefits, through economies of scale, which is perceived as the major benefit by 73% of respondents.
In addition, by providing a more knowledgeable central resource, 64% of respondents believe shared centres enable improved levels of service to be delivered throughout the organisation. Streamlining business processes is a key benefit for 55% and 52% see this as a way of implementing standard systems throughout the organisation. Maximising the availability of skilled personnel is highlighted by 30%, while freeing the finance department from routine tasks to concentrate on more strategic issues is mentioned by 30%.
Cliff Mills from the Evaluation Centre commented: “Companies both in the private and public sector view the move to shared service centres as a means of driving best practice and consistent processes throughout their organisations.”
Respondents were asked to rate their current financial and accounting system in a number of key areas, using a scale of 1 to 5 where 1 is ‘very poor’ and 5 is ‘excellent’. The quality and reliability of the software is rated very highly at 4.1, while the scope and functionality is seen as good (3.8). Frequency of upgrades (3.4), ease of use of the software (3.4) and the supplier helpdesk and support (3.3) are regarded as reasonable.
Areas that cause more concern are the cost and impact of upgrades (3.2), cost of maintenance and upgrades (3.1) and the cost of implementation (2.9). This highlights that while companies are generally happy with the quality and functionality of their systems, they would like to see the ongoing costs reduced.
In general, the majority of organisations see their investment in financial systems as having either exceeded their original objectives (12%) or having met all the objectives (53%). However, this still leaves a sizable minority (30%) who are not totally satisfied with their financial systems.
For this survey, we interviewed a cross-section of 100 organisations for their opinions on issues relating to the use and development of their financial, accounting and reporting software. The sample includes companies from banking & finance (27%), public sector (26%), retail (10%), business services (10%), IT & telecoms (9%) and manufacturing (9%).
The companies vary in size, with 13% having in excess of £5 billion turnover, 12% in the £1 billion to £5 billion bracket and 9% in the £500 million to £1 billion range.
In the mid-market, 23% have a turnover of between £100 million and £500 million and 16% £50 million to £100 million. At the smaller end, 13% turn over between £10 million and £50 million and 10% £5 million to £10 million. Not-for-profit organisations account for 3% of the sample.
The survey is available from ww.evaluationcentre.co.uk/accounting_software_financial_reporting_software/home.go
NOTE TO EDITORS
About The National Computing Centre (NCC)
The National Computing Centre (NCC) helps IT decision makers deliver effective solutions to business problems by bringing together users, experts and vendors to share experiences and develop best practices. We are a non-profit distributing organisation.
About the Evaluation Centre
The Evaluation Centre (www.evaluationcentre.com) is an interactive service for end users and consultants to assist them in the procurement process for software, services and technology.
For more information please contact Michael Dean on +44 (0)161 605 0855, email Michael.Dean@ncc.co.uk or Cliff Mills on +44 (0)870 908 8767, email firstname.lastname@example.org.
National Computing Centre
Oxford House, Oxford Road
Manchester M1 7ED
Tel: +44 (0)161 242 2121
Mob: 07703 501 129