2016 ANNUAL STATE OF

THE SHARED SERVICES

INDUSTRY REPORT
AUSTRALASIAN RESULTS
How Are Australian Shared Services Taking
Advantage of Five Influential SERVICE Drivers?

Do you adhere to the shared services Creed?

I believe our current shared services

strategy will deliver a dramatic and
recognised value to the organisation
beyond cost savings."
Answering yes or no separates advanced shared services models from traditional ones.
Nearly 3/4 of the respondents to SSONs Global 2016 State of the Industry survey agreed
with the above. That marks a significant step away from models based solely on cost
arbitrage and instead tells us something about the evolving, and we hope improving,
relationship between SSOs and their customers. What is clear is that we are not there yet,
but this survey digs into how practitioners are planning to move in that direction, so the
findings should prove relevant and useful to all.
With much of the discussion around shared services evolution hinging on new opportunities
that have only presented themselves in recent history, SSON wanted to know just how
SSOs are positioning themselves to become more relevant and offer improved value in
the near future. As a frame of reference, we identified five levers that present significant
opportunities for added value, namely: People & Development; Data Analytics; Digitalisation;
redefining Value itself; and Organisational Design.
The global report is already available on SSON's website, but ahead of
SSO Week Australasia 2016 highlight how Australia and New Zealand-based shared
services are positioning themselves.

2 | 2016 ANNUAL STATE OF THE SHARED SERVICES INDUSTRY REPORT

www.sharedservicesweek.com.au

But firsta little about our respondents

The largest segment of regional respondents 40%, in fact represent multifunctional shared services, with
finance and HR taking up their usual share.
What is heartening is to see that lengthy shared services careers abound: more than one third of our respondents
have worked within shared services for more than 10 years, and a large additional segment have more than three
years of experience in shared services. This bodes well for the industry as experience is a key differentiator when it
comes to implementations. [Figure 1.0]
Figure 1.0

Length of shared services career to date (across multiple companies)

10%
0-12 months

13%

38%

1-2 years

10 + years

23%
3-5 years

16%
6-10 years

Given the history of shared services across Australia and New Zealand its no surprise to see that more than
50% of responding have country specific roles, although there is certainly some global representation.
[Figure 1.1]
Figure 1.1

My role is

56%
16%
Global

28%
Regional

Country-specific

Whats important is that six out of 10 practitioners are committed to and believe in, the shared services creed.
In other words, the majority of practitioners in the region are not lagging behind the global trend towards value
adding services. [Figure 1.2]

Figure 1.2

I believe our current SS strategy will deliver a dramatic and recognised value to the
organisation beyond cost savings

41%

21%
10%
Dont Know

13%

10%

5%
Strongly Disagree

Disagree

Neither agree or
disagree

Agree

Strongly Agree

The moment of truth: whats driving change?

So now to the important question: Whats going to be driving these radical value-adding services over the next 24
months?
Whats interesting here is that robotic process automation the stuff of dozens of headlines over the last year is
not leading the list. Instead, operational agility is what practitioners are putting their faith in, followed by process
analytics and data analytics. In contrast to much of the rest of the globe however, Australia and New Zealand
respondents also recognise the impact of digital disruption on the value shared services will provide. [Figure 2.0]

Figure 2.0

Which of these trends will radically impact the value your shared services provides in
the organisation in the next 2 years?

7%

Strongly
Disagree

20%

17%

Strongly
Disagree

Dont Know

7%

Dont Know

2%
Strongly Disagree

2%

Disagree

35%
Agree

9%

Robotics
Process
Automation

Strongly
Disagree

19%
Digital
Disruption

16%

Disagree

16%

Neither agree
or disagree

50%
Agree

Neither agree
or disagree

Figure 2.0

Which of these trends will radically impact the value your shared services provides in
the organisation in the next 2 years?

2%

Dont Know

3%

3%

Disagree

10%

Neither agree
or disagree

Dont Know

31%

2%

Disagree

Strongly
Disagree

12%

Neither agree
or disagree

38%
Strongly
Disagree

47%
Agree

52%
Agree

7%

8%

14%

Dont Know

Strongly
Disagree

7%

Strongly
Disagree

Dont Know

17%

2%

Strongly Disagree

Strongly
Disagree

10%

Disagree

14%

24%

Disagree

14%

Agree

Neither agree
or disagree

33%

50%

Neither agree
or disagree

Neither agree
or disagree

3%

26%
Strongly
Disagree

Dont Know

2%

Disagree

10%

Neither agree
or disagree

19%

Strongly
Disagree

9%

Dont Know

3%

Disagree

29%
Neither agree
or disagree

59%
Agree Neither
agree or disagree

40%
Agree

We see confidence in the above drivers echoed in implementations. Very few, to date, cite existing implementations
of RPA or even digitalisation, although the latter emerges as such a strong driver of value, as per above. However,
many respondents indicate that they have already taken steps to leverage operational agility and organisational
redesign, as innovative enablers of value. [Figure 2.1]
Figure 2.1

Have you implemented or adopted any initiatives to drive these industry trends?

Dont Know

No

No, but
planning to

Testing

Yes and
Maintaining
levels of use

Yes and
planning to
increase

Digital
Disruption

No

No, but
planning to

Dont Know

No

No, but
planning to

Testing

Testing

Yes and
Maintaining
levels of use

Yes and
planning to
increase

Yes and
Maintaining
levels of use

Yes and
planning to
increase

38%

Organisational
Redesign

22%

Dont Know

38%

Global Business
Services

Robotics Process
Automation

52%

Dont Know

No

No, but
planning to

Testing

38%

Yes and
Maintaining
levels of use

Yes and
planning to
increase

Process
Excellence

Operational
Agility

26%

No

No, but
planning to

Testing

Yes and
Maintaining
levels of use

Yes and
planning to
increase

Data Analytics

28%

Dont Know

No

No, but
planning to

Testing

Yes and
Maintaining
levels of use

Yes and
planning to
increase

Dont Know

Global Talent
Management &
Workforce Planning

Dont Know

No

No, but
planning to

Testing

Yes and
Maintaining
levels of use

Yes and
planning to
increase

No, but
planning to

Testing

Yes and
Maintaining
levels of use

Yes and
planning to
increase

33%

Dont Know

No

Radical Performance Driver #1: Your People

Despite the impressive evolution of technology solutions and an increased awareness of the importance of modern
process design, service remains first and foremost about people. It's for this reason that shared services have
redefined "talent management" as a key priority. This means working closely with HR, establishing credible career
paths, and offering plenty of opportunities for team players to shine.
A modern shared services requires skill sets that were not even on the agenda a mere decade ago. Practitioners
are recognising this, and list upskilling staff and resourcing for the new skill sets, alongside leadership, as their key
challenges. [Figure 3.0] One interesting divergence from the global result is that within this region there is more
emphasis on recruitment process outsourcing for hiring. Nevertheless, here and elsewhere the most recognised
and effective means of recruiting remains the internal team. [Figure 3.1]
Figure 3.0

What is your biggest talent management challenge?

Leadership

31%
27%
22%

Up-skillin staff
Resourcing for new-add job skills
Other

20%

Figure 3.1

When recruiting for talent, what are your most successful recruiting channels? (Most
successful is 1 and least is 3)

55%
20%

25%

Headhunters

26%

40%

34%

Recruitment
process
outsourcing (RPO)

55%
25%
Internal
Recruiting team

20%

The skills practitioners across the world, and this region, are looking for today veer strongly into the "softer"
skills that were not on the radar in the past, as leaders recognise that, today, it's less about functional or process
expertise and more about understanding the customers needs. Problem-solving ability emerged as a key desirable
skill set for Australia and New Zealand-based services centres. Relationship management and communication
skills also scored highly.
The impact of all this on the makeup of a shared services team is making itself felt by a tremendous asset to
upscale existing staff [8 out of 10 respondents agree] as well as developing teams of specialists or centres of
expertise to deploy more value adding services. [Figure 3.3]
Figure 3.3
n Dont Know

n We are considering changes

n No changes

n We are actively planning/already making changes

10%
8%
41%
41%

Building centres of expertise/

developing specialists

Upskilling existing staff

LEGENDS:

10%
20%
45%
25%

Radical Performance Driver #2: Data Analytics

If people are the enablers of service, data is the driver. More and more of todays technology solutions incorporate
the ability to mine and analyse real-time data, and many organisations are setting up teams of data analysts to
evaluate all that data flowing through the systems. While our survey indicates that the reality of data analytics still
lags the expectation, there are some positive signs.
On data analytics there is excellent news: Less than 5% of respondents indicated they were not currently using
data analytics nor did they plan to, to drive performance. More than half are already using data analytics and an
additional 40+ percent plan to test it or are already testing it now. [Figure 4.0]

Figure 4.0

Are you currently using data analytics to improve performance?

30%
22.5%

2.5%

2.5%

Dont know

No

No but
planning to

20%

Testing

22.5%

Yes and maintaining

levels of use

Yes and planning to

increase

What's clear is that practitioners across the region are in no doubt about the significance of data analytics
within shared services. The key opportunity as identified by our survey, apart from the standard cost reduction,
increasingly include top line growth. Where Australian and New Zealand centres are again somewhat ahead of
the global trend is in recognizing analytics value for risk management and workforce insights. In fact, across the
board, regional respondents rate the added value of data analytics higher than do their global peers, and appear to
understand the impact of analytics on performance more intuitively.[Figure 4.1]

Figure 4.1

What are the perceived opportunities for data analytics?

2% 5%

LEGENDS

2% 2%
33%

n Dont know

5%

n Strongly Disagree
n Disagree
n Neither Agree nor Disagree

53%

n Agree
n Strongly Agree

Improved
understanding
of internal
customer
base

Improved
Process
Metrics

40%
2%

2%

12%

33%

32%

53%

40%
2% 5%

5%

23%

20%

23%
Market
intelligence

Workforce
Insights

18%

38%

Risk
optimisation

50%

While procure to pay is identified across all regions as a key function for data analytics to drive more value, it is HR
that emerges as a front runner in terms of its ability to benefit from data analytics. Whats also interesting is that
sales and marketing were listed by more than half the shared services practitioners as key functions for which
analytics could drive value. [Figure 4.2]
The UK and Ireland showed recognition in linking it to top line growth [65%], and continental Europe leads in
recognizing its impact on market intelligence [nearly 75%]. Some of the obvious gaps and therefore opportunities
however, are in using analytics to manage risk, and understanding the needs of the external customer base.
The areas that stand to benefit most from data analytics are P2P and HR, according to our survey. Again, we see
some variation across Europe with the continent recognising more potential in order to cash, and record to report,
than the UK and Ireland (but these differences are fairly minimal). [Figure 4.2]
To find out just how practitioners are leveraging analytics we often which solutions they had already invested in.
Interestingly, the solutions that potentially offer the most leverage like predictive solutions or solutions around
digital lighting unstructured data don't rate highly. However, solutions around master data management, data
analytics, and business intelligence are all emerging as popular.

What stands in the way of more data analytics being rolled out? It's not for lack of a watertight business case, but
rather competing investment priorities and lack of resources to allocate to the project. As we see more and more
case studies extolling the benefits of data analytics we may also see more projects being given the green light.
[Figure 4.3]

Figure 4.2

Which processes/functions offer the most potential for data analytics to drive
improvement?
LEGENDS: n R2R n O2C

n P2P

n HR

n Sales & Marketing

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%

Dont know

Strongly
Disagree

Disagree

Neither Agree
nor Disagree

Agree

Strongly Agree

Figure 4.3

What is holding back implementation of data analytics?

Competing investment priorities
Lack of Budget Availability

47%
40%
33%
18%

7%

20%

13%
0%

Dont Know

Strongly
Disagree

2%
Disagree

Neither Agree
nor Disagree

Agree

Strongly
Agree

Radical Performance Driver #3: Automation and Digitalisation

Once you have the people and the information, new technical solutions offer fast, reliable, secure means of
delivering service. Automation and digitalisation [which is automation raised to the power of n by harnessing the
potential of real-time data, the Internet, mobility, and 24/7 access] have caused a paradigm shift in service delivery.
The advantages, of course, are primarily accuracy and standardisation in other words: quality, timeliness, and
reliability but extend to streamlining processes and the ability to scale up or down as needed. Whats encouraging
is that the majority of respondents recognise this as an opportunity as opposed to a threat [Figure 5.0]
Figure 5.0

What does the term digital disruption evoke?

6%

Upskilling existing staff

51%
9%
17%
6%

LEGENDS:

11%

n Dont Know
n No changes
n We are considering changes
n We are actively planning/already making changes

We asked practitioners which automation

solutions they had implemented today
and the winners, by far, were e-invoicing
and document imaging, although again in
contrast to their global peers Australian
and New Zealand practitioners seem to
prioritise e-recruiting more than other
regions. Again, across the board the
results indicate high levels of technology
implementation in this region. [Figure 5.1]
Where practitioners expect the best
results from automation is in process
standardisation, fewer errors, and, of
course, cost savings. [Figure 5.2] In terms
of specific processes, practitioners are
prioritising procure to pay above order
to cash or record to report, but also
list HR and travel and expense as good
opportunities. Overall, practitioners
expect to gain improved customer
satisfaction as well as operational agility/
resource flexibility from increased use of
automation. [Figure 5.3]

Figure 5.1

Which of the following automated solutions have you already implemented?

(more than one answer can apply)
Supplier Management

Case or service management

Knowledge management

Human Capital
Management

20%
Data Analytics

Document imaging

43%
31%

43%

Implemented
automation
solutions

40%
Content and
Collaboration
Management

29%

34%

54%
Business Intelligence

23% 31%

54%
Contact centre
automation

51%

30%

e-invoicing

Workforce management

e-recruiting
Application
tracking system
Figure 5.2

Which do you see as the greatest benefits of automation?

13%
11%
19%
20%
21%
10%
6%

Compliance
Faster Delivery
Cost Savings
Improved accuracy
Process standardisation
Fewer FTEs needed
Integration with data analytics
leading to valuable insights

Figure 5.3

How is digitalisation and automation impacting on your workforce?

(1 as most important, 5 as least important)

40%

43%

Improved Customer
Satisfaction

8%

6%

9%

11%

3%

46%
31%
Improved operational
agility and resource
flexibility

3%

Although the leading headline for automation around the world has been robotic process automation, and despite
the column inches devoted to RPA, more than 65% of respondents from Australia and New Zealand have not yet
taken any action with regards to RPA implementation. Although this mirrors the reality across much of the rest
of the world, there is a significant opportunity that is being overlooked. [Figures 5.4 and 5.5] More than half our
respondents indicated that lack of budget as well as competing investment priorities were the key reasons for not
doing more, although a third of respondents also remain unconvinced of the value of RPA. [Figure 5.6]
Figure 5.4

Figure 5.5

Have you already implemented RPA?

Do you understand the value of RPA

to your operation?

34%
66%

31%

26%

11%

3%
11%
3%
Dont
know

6%

6%
3%

Strongly Disagree Neither

Disagree
Agree nor
Disagree

Agree

Strongly
Agree

No

Not
convinced

Testing

Yes

Yes,
absolutely

Figure 5.6

What is holding back the implementation of RPA in your business?

31%

29%
20%

0%
Dont Know

Strongly
Disagree

17%

3%
Disagree

31%

Neither Agree nor

Disagree

Agree

0%

0%

Strongly
Disagree

Disagree

31%

Neither Agree nor

Disagree

31%

0%
Dont Know

Strongly Agree

29%
20%

Dont Know

Budget Availability
Competing investment
Not convinced of its value

Strongly
Disagree

Agree

Strongly Agree

31%

3%
Disagree

20%

3%
Neither Agree nor
Disagree

Agree

Strongly Agree

Radical Performance Driver #4:

Re-evaluating the meaning of Value
When shared services practitioners spoke of delivering "value" in the past, what they generally meant was
delivering the same service at lower cost. Today, however, much of the low hanging fruit that "cost" represented has
been harvested.
The focus is thus shifting to "What else can you do for me today?" and this is where forward-looking shared
services practitioners have been quick to grasp onto the value they can provide in terms of faster service,
strategic insights and integration. What's key here is that "value" is being associated with the ability to understand
customers business is better. So while cost will always continue to be a key measure, we are seeing a recognition
of shared services ability to drive business intelligence and data insights, provide flexibility around scale, and
expertise as the key determinants of value add.
So, while the customer still generally defines value in terms of "lower-cost" [Figure 6.1], and measures this
predominantly through KPI dashboards [Figure 6.2], we are also seeing the emergence of "integrated service
across functions", and to a lesser but growing extent innovation, as impacting customer perceptions of value
delivered [Figure 6.0]

For shared services this will be the key challenge: how to remain not just relevant as a business enabler, but to be
recognised as a true business partner in identifying opportunities and guiding the business to optimal decisions.
Figure 6.0

How does the business define value?

(more than one answer can apply)

23%

21%
13%

8%

7%
Top line
revenue
growth

Faster
service

7%

1%

3%
Lower costs/
bottom line

7%

10%

More integrated
Data
services across analytics
functions/
processes

Strategic
business
insights

Enabling
Competitive
access to new advantage
markets

Having the SS Innovation

as a business
partner

Figure 6.1

How do you measure value?

Value is
measured
in dollars

52%

Value is recognised as
an intangible enabler
of performance

48%

Figure 6.2

How do you demonstrate or report value to your customers/the board?

BI Platform

18%
55%

Project reviews
Smart device
APP

60%

Graphic and metrics in

powerpoint presentation

33%

Cash impact &

Contribution analysis

42%

KPI Dashboard
Data Visualisation tool

92%
18%

The challenge is now, therefore, to identify the next source of value-generating activities. For this, practitioners
list benchmarking and continuous improvement initiatives at the most reliable source. [Figure 6.3] They are also,
however, listening to their customers to understand their needs.
Those environments that are most conducive to identifying additional opportunities to drive value are those that are
automated and benefit from integrated platforms. More specifically, practitioners recognise the existence of process
expertise, for example through a centre of excellence, as a significant and reliable driver of value generating
opportunities. [Figure 6.4] RPA remains off the radar at present.

Figure 6.3

Are you identifying value-generating activities through any of the following?

55%

Advice from
consultants

36%

36%

Benchmarking

Business Insights via

data analytics

45%

36%

Continuous
improvement initiatives

Based on customers
demands

Figure 6.4

How is value-delivery enabled in Shared Services?

GPO

15%
39%
24%
39%
33%
9%
15%
27%
61%

Single ERP
GBS Model
Automation
Data Analytics
Sounds Audit and Regulatory Controls
BPO partnerships
Cloud-enabled applications/software as a service
Process Expertise/centre of excellence

Radical Performance Driver #5:

Restructuring Shared Services
The final piece in the service delivery puzzle can best be described as restructuring the
organisational model known as shared services to better suit todays needs.
The survey tells us that the largest segment of Australia or New Zealand-based SSOs are still
predominantly insourced, and one out of four support in-country work. [Figure 7.0]
Where outsourcing occurs, the vast majority [nearly 3/4] of respondents say that the outsourced
work represents less than 20% of total FTEs. [Figure 7.1] Of these captive FTEs, the largest
segment is working from onshore locations. [Figure 7.2]

Figure 7.0

What is your current service delivery model?

(more than one answer can apply)

61%

26%
13%

13%

GBS

Mainly
insourced

Mainly
outsourced

13%

6%

3%

Hybrid

Regional
SSOs

3%
Hub
and spoke

In-country
model

Dont know

Figure 7.1

What % of your shared services organisation is currently outsourced?

71%

3%
0-20%

13%

3%

21-40%

41-60%

10%

61-80%

Dont know

Figure 7.2

Where are most of these FTEs based?

West Europe

3%

North America

3%

3%
10%
Middle East
and Africa

China

13%
India

Australia and
New Zealand

68%

So there are no surprises as far as existing shared services models go. However, clearly there is plenty of scope to
reconfigure this model in the light of the opportunities presented by points #1-4, above. In answer to the question
as to how they plan to redefine their service delivery model to deliver more value, the majority of respondents listed
upskilling existing teams and using technology as a key strategy. By implication, this will mean fewer FTEs. Data
analytics is certainly on the up, but is not yet featured as a key change agent for the SSO model. [Figure 7.3]
What is also apparent is that leveraging BPO partners, is becoming more interesting to a significant segment of
practitioners. More than one third of respondents plan to leverage their BPO partners offshore locations as a
means of optimizing their shared services model, but, and perhaps more interestingly, nearly 50% plan to leverage
their BPO partners onshore locations. [Figure 7.4] To this extent, respondents list their local market as a primary
target for resourcing their shared services model, but also emphasise APAC and India as geographies they plan to
use to their advantage. [Figure 7.5] Whats driving this appetite, or interest, is not just cost but increasingly the need
to access specific talent and skill sets.

Figure 7.3

Up-skill the in-house team plus leverage new technology

39%
26%
19%
13%
3%
Dont know

0%
No

No but planning to

Dont know

Dont know

Dont know

13%

52%

16%

19%

Leveraging outsourcing partners

onshore locations

Leveraging outsourcing partners

offshore locations

Figure 7.4

13%

42%

35%

10%

LEGENDS:

n Dont Know n

No

n No but planning to

n Yes

Figure 7.5

Which additional/alternative locations are you considering?

(more than one option can apply)
North America
West Europe

10%

6%

10%
6%

Latin America

3%

Middle East
and Africa

China

23%
India

29%

APAC

65%

Australia and
New Zealand

All the latest trends in the SSO industry in ANZ will be explored in more depth during the 19th Annual
Australasian Shared Services & Outsourcing Week, taking place in Melbourne from 15-17 June 2016. For more
information, and to secure your place amongst 500+ shared services and business transformation
professionals, visit www.sharedservicesweek.com.au or call +61 2 9229 1000 or email enquire@iqpc.com.au