Full disclosure: the basics of designing and implementing a shared services concept.(International feature)(Survey)

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The shadow of recession has spread from the United States into Europe and Japan. Even China is seeing a dip in growth, though it is still expected to be one of the strongest economies in the near term. For many companies, all of this downward pressure means scaling back on expenditures and a greater onus placed on reducing costs. These firms, both domestic and international, with a webbing of global networks could be witnessing a heyday for trends such as outsourcing and shared services centers.

A survey by the English Institute of Chartered Accountants found that more than 30% of Fortune 500 companies have implemented a shared services center and are seeing up to a 46% savings in their general accounting functions. Since the early 1990s, large companies like the BBC, Bristol Myers Squibb, Ford, Hewitt Packard, Pfizer and Rolls Royce have shaved millions from their operating costs by turning to shared services initiatives. Basically, shared services and outsourcing are cousins: two related but different ways of delivering back office services to a business through centralizing and downsizing. As with almost any transition, the more time spent on the change, the more effective the result will be.

Last April, at FCIB's International Credit Executives (I.C.E.) Conference in Chicago, four credit executives offered their experiences of implementing shared service centers in their companies. This information was detailed in the feature article "Why Can't We Be Friends? The Joys and Heartaches of Global Shared Services" in the June 2008 issue of Business Credit. But what wasn't discussed was the amount of work that went into making such a complex transition happen, let alone succeed.

"After that presentation in April, I thought there were many people in the audience, especially me, that may not have had the shared service experience," explained Lori Martin, CCE, director, global credit & collections, Juniper Networks, Inc., during her presentation at the 19th Annual FCIB Global Conference. "I thought it would be helpful to share what it took to launch a shared service initiative."

For close to three years, Juniper Networks looked into developing an expanded shared services center in India, building upon the success of the company's regional existing shared services offices. The largest issue with transition plans like developing a shared services center is ensuring that there is actually a cost savings being realized. Though, as witnessed in past discussions on the subject, it can sometimes be an aspect that is difficult to bring to fruition.

"I was a skeptic and didn't think it would work," admitted Martin. "After putting the plan together, I still wasn't convinced, but my boss was still telling me to do it. It wasn't probably until last October that I realized what the benefits were."