Finance IT move to shared services systems
Enterprise finance departments face increased demand for improved management information, cost reductions, and efficiency savings, claims research commissioned by the National Computing Centre’s Evaluation Centre IT advisory service.
The top business drivers for recent developments in financial and accounting systems are: to reflect the continuing changes in business processes and procedures, mentioned by 75 per cent of respondents; the need to make cost savings (56 per cent); improving management information to allow enhanced decision making (44 per cent); and enhancing customer focused processes (44 per cent).
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 – registering a 30 per cent response - will also be a significant factor, the survey denotes.
The creation of shared service centres to address these issues is gaining in popularity: 31 per cent of organisations report adopting this approach, with a further 5 per cent are in the planning stage, and 2 per cent evaluating the option. Shared service centres allow tasks previously performed locally by divisions or business units to be re-engineered, streamlined and centralise. This has the advantage of offering cost benefits, through economies of scale, which is perceived as the major benefit by 73 per cent of respondents.
By providing a more knowledgeable central resource, 64 per cent of respondents also believe shared centres enable improved levels of service to be delivered throughout the organisation. Streamlining business processes is a key benefit for 55 per cent, and 52 per cent see this as a way of implementing standard systems throughout the organisation. Maximising the availability of skilled personnel is highlighted by 30 per cent of those polled, while freeing the finance department from routine tasks to concentrate on more strategic issues, is also mentioned by 30 per cent.
Generally, the majority of organisations see their investment in financial systems as having either exceeded their original objectives (12 per cent) or having met all the objectives (53 per cent). This still leaves a sizable minority – some 30 per cent - who are ‘not totally satisfied’ with their financial systems.
For this survey, NCC/EC 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 and finance (27 per cent), public sector (26 per cent), retail (10 per cent), business services (10 per cent), IT and telecoms (9 per cent), and manufacturing (9 per cent). The companies vary in size, with 13 per cent having in excess of £5bn turnover, 12 per cent in the £1bn to £5bn bracket and 9 per cent in the £500m to £1bn range.