Shared Services ? Are They A Good Idea

Things happen fast in business and we need to stay on top. It does not seem long ago that some enterprises were still hands-on traders or artisans with a few youngsters to help out. People like that did not do admin and their accounting was a matter of making sure there was enough money in the jar.

When Wal-Mart’s Sam Walton took over his first shop in 1945 things had moved on from there, although he did still deal directly with his customers. When he died his legacy was 380,000 jobs, and a business larger than most economies. So there?s plenty we can learn from how he grew his business.

One of Sam?s secrets was his capacity to centralise what needed gathering together, while empowering store managers to think independently when it came to local conditions. His regional warehouses had individual outlets clustered around them within one day?s drive each. This shared service eliminated 90% of safety stock and released capital for expansion.

Wal-Mart took sharing services a step further in February 2006, when it centralised accounts payable, accounts receivable, general accounting and human resources administration at Wal-Mart Stores and Sam?s Clubs in the U.S. and Puerto Rico. The objective was to bring costs down, while allowing local managers more time to focus on their business plans and other initiatives. As a further spin-off, Wal-Mart was able to integrate its data on a single SAP platform and eliminate significant roadblocks.

This is an excellent example of sharing services by creating own centres of excellence.? Of course, this is not the only business possibility. Other corporates have successfully completely outsourced their support activities, and Wal-Mart has no doubt had a variety of similar offers too. But, is the Wal-Mart picture entirely rosy, or is there a catch?

The Association of Chartered Certified Accountants has indicated that top talent may be the loser globally. This is because the Wal-Mart model removes many challenges through standardisation, and offers less scope for internal promotion as a result. Language and cultural differences may also have a long-term detrimental effect on the way the departments work well together.

Local outsourcing ? this is the business model where several firms engage a shared service provider independently- may hence prove to be a more malleable option for smaller companies. It often makes more sense to hunt down made-to-order services. Offerings such as the professional support we offer on this site.

Check our similar posts

Spreadsheet Woes – Ill-Equipped for an Agile Business Environment

These days, crucial business decisions have to be made in a split second. However, the quality of these decisions hinges quite often on timely, insightful information and relevant business reporting.

How effective is your business reporting solution in providing you with the information you need at the time you need it?

Chances are, like 75% of small and medium businesses, your company is using spreadsheets. True, spreadsheets are the most common go-to solutions for on-the-fly forecasting, but they may not be your best option for presenting information that require consolidation and in-depth analysis and involve a lot of number crunching, especially with critical data at stake.

Furthermore, spreadsheet-based reports are rarely produced in a timely manner. In today?s fast evolving business environment where flexibility, mobility, and timeliness are the order of the day, this simply won’t do.

Let’s take a look at the particular areas where spreadsheets fall short when it comes to providing dynamic and sound financial reports:

Collaboration

With rapidly changing market conditions, organisations have to conduct budgeting, forecasting, and planning more often. Hectic schedules and geographical distances aren’t a hindrance though, because technologies like the Internet, advanced telecommunications and mobile devices can put instantaneous collaboration at everyone?s fingertips.

But collaborative activities in a dynamic setting can only succeed if all participating individuals are given secure, real time and simultaneous access to the same relevant information. This way, every change made is automatically consolidated and projected unto the bigger picture for everyone to digest.

Alas, spreadsheets aren’t built for this.

Cost Efficiency

Whether we’re in a recession or not, cost efficiency has to be taken into consideration. Are spreadsheets really the cost-effective solution?

Think ?time is money?. With the length of time needed to prepare data, establish controls, consolidate reports and distribute copies, you’ll realise how expensive spreadsheets actually are.

The ability to innovate in a changing economic environment and limited resources – a valuable derivative of agile practices – can give your company a very significant advantage. But dedicating so much time on spreadsheet management can strip your organisation of room for innovation.

Quality of Reports

Business empires rise and fall on the power of relevant information. At the end of the day, top management should assess their sources of key performance reports, planning tools and budgeting applications using these parameters:

  • Does your financial reporting system give you the right information right when you need it?
  • Do the reports allow you to look beyond the numbers to spot trends or forecast changes in the market?
  • Do they furnish enough significant data for you to make informed decisions in good time?

Spreadsheets weren’t designed to analyse data on the enterprise level. As a result, spreadsheet reports often take far too long to prepare and more importantly, may lack the dimension and depth that are crucial in decision making.

Data Reliability

We’re all familiar with the risks associated with spreadsheets. This error-prone UDA can provide inaccurate information simply because of a broken link, an incomplete range, a deleted number, or an incorrect formula. In an active business scenario where data manipulation has to be done under constant time pressure, the risk probabilities escalate.

As they always say, ?If anything can go wrong, it will?. With spreadsheets, a lot of things could go wrong. Is this the kind of tool you?d like to work with when making fast, crucial decisions? If you’re still using spreadsheets, then you?d best forget about dynamic reports and rolling forecasts.

Inability to adapt to personnel turnover

A key challenge in maintaining the spreadsheet system is picking up where another left off. A user would find it difficult to debug, revise, or analyse a spreadsheet system he developed himself and the process becomes doubly complicated if or when another person takes over.

Starting from scratch is painfully counterproductive, so that a newcomer has to spend hours figuring out the original entries in the spreadsheet and the reports it yields.

While no one is indispensable in any organisation, it’s pretty much accurate to say that if a spreadsheet ?developer? leaves, it could momentarily halt the production of key finance reports. In a fast changing business landscape, such failure to monitor performance at critical times could sound the death knell for your company.

More Spreadsheet Blogs


Spreadsheet Risks in Banks


Top 10 Disadvantages of Spreadsheets


Disadvantages of Spreadsheets – obstacles to compliance in the Healthcare Industry


How Internal Auditors can win the War against Spreadsheet Fraud


Spreadsheet Reporting – No Room in your company in an age of Business Intelligence


Still looking for a Way to Consolidate Excel Spreadsheets?


Disadvantages of Spreadsheets


Spreadsheet woes – ill equipped for an Agile Business Environment


Spreadsheet Fraud


Spreadsheet Woes – Limited features for easy adoption of a control framework


Spreadsheet woes – Burden in SOX Compliance and other Regulations


Spreadsheet Risk Issues


Server Application Solutions – Don’t let Spreadsheets hold your Business back


Why Spreadsheets can send the pillars of Solvency II crashing down

?

Advert-Book-UK

amazon.co.uk

?

Advert-Book-USA

amazon.com

Contact Us

  • (+353)(0)1-443-3807 – IRL
  • (+44)(0)20-7193-9751 – UK
Saving Energy Step 1 ? Implementing a Management System

There has been much hype down the years regarding whether management is art or science. Thankfully, where people are concerned the pendulum has swung away from standard times in sweatshops in the west. However, when it comes to measuring physical things like harvest per square meter and the amount of energy consumed there is no substitute for scientific measurement, and this implies a system.

Managing energy cost and consumption down is like any other strategy. American engineer / statistician / management consultant W. Edwards Demming may have passed on in 1993. However he was as right as ever when he said:

  1. When people and organizations focus primarily on quality, this tends to increase and costs fall over time.
  1. However, when people and organizations focus primarily on costs, costs tend to rise and quality declines over time.

Demming believed that 90% of organizational problems arise from systems we put in place ourselves. This can be because we are so accustomed to them that we fail to notice when they are no longer relevant. The currently prevailing laissez faire towards energy is a case in point. What is managed improves and what is not, deteriorates. We know this. Let us take a look at how to apply this principle to energy management.

First, you need to get the subject out the closet and talk about it. How often do you do this is your boardroom, and how does energy rank against other priorities? Good governance is about taking up a position and following through on it. Here is a handy checklist you may like to use.

  • Do we use a consistent language when we talk about energy? Is it electricity, or carbon emitted (or are we merely fretting over cost).
  • How well engaged are we as a company? Looking up and down and across the organization are there points where responsibility stops.
  • How well have we defined accountability? Do we agree on key performance areas and how to report on them.
  • Are we measuring energy use at each point of the business? When did we last challenge the assumption that ?we’re doing okay?.
  • Have we articulated our belief that quality is endless improvement, or are we simply chasing targets because someone says we should.

A management system is a program of policies, processes and methods to ensure achievement of goals. The next blog focuses on tools and techniques that support this effort.

Benefits of Energy Savings Opportunity Scheme (ESOS)

More than just building energy, improving skills and undertaking audits, Energy Savings Opportunity Scheme works beyond. ESOS adheres to policy coherence, provides information to raise awareness, facilitates energy efficiency market and encourages adoption of appropriate energy efficiency measures.

Generally, ESOS is great for energy professionals and businesses. And in the current situation of UK?s energy industry, this new scheme is a substantial help. The key is to know the benefits that ESOS provides, understand how it can affect you, learn how to maximise its potential and make a big difference. Here?s to explore the highlights of ESOS.

Who benefits from ESOS?

Energy Savings Opportunity Scheme covers non-SME enterprises which includes UK businesses having more than 250 employees; even those with employees fewer than 250 but have annual turnover of more than ?50m and balance sheet exceeding ?43m; or those professionals that belong to a large enterprise. This is in accordance with what Article 8 of the EU Derivative provides.

What are the benefits of ESOS?

ESOS provides opportunities to enhance an organisation’s energy efficiency strategy, of which the benefits include:

Economic Growth and Competitiveness

The implementation of energy efficient measures increases local employment in the labour markets. Consequently, this taps the labour potential and drives economic growth.? In a lower carbon economy, businesses need to develop green projects to maintain economic competitiveness as well. ESOS is strategic approach initiated by the UK government to push technological innovation and energy investments.

Cost Savings and Emission Reductions

ESOS is flexible in such a way that it combines energy policies and innovations tailored to every organisation’s need. The energy efficiency measures taken, resulting from the scheme, quickly cuts down both carbon emissions and energy bills at cheapest possible ways.

Managing Energy Demand

ESOS provides energy security to UK by reducing the energy consumption of enterprises. With this, the economy would be more efficient and less exposed to international energy market volatility. Also, this will lead to more savings from less future investment in energy infrastructure.

Getting your Management Performance Noticed

If you are an energy professional, you will benefit from ESOS by exploiting it ?to boost your charisma towards the company directors. You can show them how the scheme works and how it can save your company substantial costs. Managing energy with ESOS can help an organisation grow. Nevertheless, you are the key person designated to get the project done and achieve success.

How can ESOS make a difference?

More than anything else, ESOS can make a huge change. True to its name, it provides large enterprises the opportunity to manage energy wisely, reduce overhead costs and promote responsible corporate energy consumption.

The International Energy Agency said that investing in energy efficiency leads to growth, additional jobs, competent budgets on public spending and enhanced industry productivity. If you are an energy and environment professional or a non-SME business entity, you hold the impulse to act. Aside from all those excellent business benefits that you get to enjoy, you will be able to contribute a portion towards achieving UK?s national carbon target of 80% in CO2 by 2050.

Contact Us

  • (+353)(0)1-443-3807 – IRL
  • (+44)(0)20-7193-9751 – UK

Ready to work with Denizon?

Contact Us Today