Achieving Operational Excellence in Finance Operations and Shared Services

“The traditional [shared services] model… is being swept away by a powerful confluence of technological advancements and an ever-evolving business landscape. We stand at a pivotal juncture, where the tide of digital transformation is rising rapidly, forcing shared services leaders to reimagine their operating models and embrace new capabilities,” summarized the SSON’s State of Shared Services & Outsourcing Industry – Global Market Report 2024.

Before we examine strategies for generating operational excellence, it’s important to take a quick look at this context and examine what people in financial functions and shared services (plus finance shared services teams) are facing.

Two-a-days in finance and shared services

It’s not just that the business environment is in flux, it’s the speed and scale of change that leaves finance and shared services professionals constantly scrambling to adopt new technologies, adapt best practices, and improve operational processes. Just to survive. Most people working in a finance department or Shared Services Center have two jobs: optimizing the day-to-day operations and managing business transformation.

At the same time, the expectations for each business unit have also been raised. Shared Services Centers and similar business units are no longer regarded as back-office functions focused solely on cost savings and driving efficiency. These days former ‘support functions’ are often considered value centers – strategic partners contributing to core business value and customer service quality.

• Read: How to turn a Shared Services Center into a value magnet

Strategies for achieving operational excellence

Let’s look at some key strategies that will help put operational excellence well within your reach.

Spend time on tech before spending money

Technology can be a (perhaps even ‘the’) significant catalyst for operational excellence. But spend time before spending money. Conduct due diligence to identify appropriate technologies for your operations in terms of complexity, scalability, flexibility and, of course, cost. AI and automation software is commonly deployed to accelerate processing times, improve accuracy, and minimize unnecessary manual tasks. However, expect ROI in the years, not months. Patience is still a virtue, after all.

Typical tech use cases worth exploring include:

• Enhancing customer service through self-service payment portals.
• AI-powered interfaces that provide 24/7 support and handle routine financial inquiries from employees. These could include customer-facing teams, therefore enhancing service quality and reducing the workload of finance staff.
• Robotic Process Automation (RPA) that can automate invoice processing and reconciliation, reducing processing time and errors. Just make sure you’re automating good stuff and not expecting automation of out-of-shape activities to lead to efficient processes. Discover how to make RPA really work for your business here.
• Natural Language Processing (NLP) can extract key information from unstructured financial documents, speeding up data entry and analysis.

Ensure data quality and governance

Investment in new tech will only improve service delivery and finance function performance when it’s accompanied by high-quality data. Decision making, predictive analytics and automations driven by inaccurate or incomplete data compromise operational efficiency. Implementing strong, structured data governance and quality-control processes is key to maximizing tech ROI.

• Read: How Process Intelligence is accelerating Hitachi Energy’s data-driven decision making

Process optimization

If you can ensure your finance and shared services processes are working effectively and aligned to your strategies, you’re a long way to achieving operational excellence. But that’s a big ‘if’.

There’s very often a gap between how organizations think processes work and how they work in practice. This, plus departmental silos and systems that are difficult to integrate, makes it hard to deliver any kind of effective business transformation. Some 62% of finance and shared services leaders haven't optimized a process in the last 12 months, according to the 2024 Process Optimization Report.

A strong strategy for overcoming these challenges and optimizing operations is to use process mining and business process management solutions. These help businesses map out their processes as they actually work, identify opportunities for improvement, and design processes fine-tuned to fulfill business goals (such as reducing process variability, driving efficiency, and improving accuracy). Increasingly, businesses are turning to Celonis Process Intelligence, which performs each of these functions – and then goes a step further.

Consolidating all process and systems data, internal and external, Process Intelligence creates a digital twin of all workflows as they actually operate. This detailed, real-time visibility also enables integrated tracking of performance KPIs. Using advanced AI, Process Intelligence makes it easy to identify value opportunities hidden in financial and shared services processes. It also layers in knowledge of standardized processes to create optimum workflows – and then puts AI to work again orchestrating process automations to bring the new approach to life.

How Process Intelligence has been put to work

Relevant use cases for Process Intelligence deployments in finance and service operations include, but are far from limited to:

• Improving cash flow: Optimize collection strategies using data-driven analytics to intelligently rank priorities. Leverage automation to streamline repetitive tasks such as payment reminders, categorizing disputes, and processing credit authorizations.
• Reducing costs: Eradicate duplicate payments by analyzing invoices to identify, flag, and address potential duplicates.
• Increasing productivity: Improve your first-time-right rate by identifying purchase order discrepancies, for instance. Process Intelligence means you can compare PO data with purchase requisitions, contracts and master data, find what’s causing rework issues, and fix it.
• Enhancing service levels: Improve on-time payment and on-time delivery by systematically prioritizing outstanding invoices and customer orders, as well as rapidly resolving unnecessary payment and credit blocks.

Create a continuous improvement culture

Key to any level of success achieving operational excellence in finance and shared services is developing a continuous improvement culture. Build a framework that encourages teams to regularly evaluate their performance and seek incremental ways to enhance it on an ongoing basis – such as the adoption of techniques like Lean Six Sigma and Kaizen.

This culture can be enhanced by setting up feedback loops where employees, stakeholders, and customers can provide input on service quality and generate insights into the perceived performance of finance shared services.

• Watch: VaynerMedia’s Chief Heart Officer explains radical candor in feedback

By combining data-driven insights and performance tracking from process optimization, stakeholder feedback, employee engagement, and customer perspectives, you can build both the culture and the instruments for delivering continuous improvement. This makes the active pursuit of operational excellence and enhanced service levels in every business process across finance and shared services an everyday reality.

Best practices for operational excellence implementation

Whatever form your journey towards operational excellence takes, there are several important considerations to ensure successful implementation and sustainable impact.

Define your goals

Decide what operational excellence means to your finance and shared services organization. You can’t hit a strategic target before you’ve defined it. You need a clear, specific vision of what you want to achieve – a vague notion of improving accounts receivable or boosting the efficiency of your Shared Services Center won’t cut it. Crucially, these goals need to be aligned with overall business KPIs.

Set your milestones

You need to assign the success milestones by which you’ll demonstrate progress towards operational excellence. Typically this would include a combination of metrics covering various aspects of performance, including efficiency, quality, and stakeholder satisfaction. Days Sales Outstanding (DSO), cost per invoice in finance, average handling time, and Net Promoter Score (NPS) are important metrics to consider.

Get leadership support

Getting buy-in from business leaders is critical to driving change across the organization. You need these executive sponsors to articulate the benefits of operational excellence initiatives and how they align with broader business strategy. This generates buy-in and project support from functional stakeholders.

Phase your implementation

Where possible, introduce your optimization initiatives in phases. Pilot projects targeting specific processes enable you to demonstrate early value, build on successes, learn from failures, and manage risk. This momentum and advanced understanding provides the foundation for scaling up to a broader implementation.

Change management

Effective change management and communication strategies are essential for overcoming some inevitable resistance and ensuring the seamless adoption of new processes and technologies. This includes providing consistent updates, conducting training sessions, and establishing feedback channels for continuous input.

• Read: How to get buy-in and manage change

Performance tracking

Track and report progress against your project KPIs on a regular basis. Use consolidated insights from platforms such as Celonis Process Intelligence to measure how well new processes are working, how consistently new approaches are being applied, and where further adjustments need to be made. Assess the performance against internal targets as well as industry benchmarks, and keep digging for new opportunities to generate business value.