German Shared Services Focused on Productivity and Working Capital
Posted by email@example.com on August 12, 2018
Germany’s Shared Services landscape is somewhat unique as a result of a tendency to onshoring, and stringent labor laws that limit the staffing flexibility enjoyed by some other countries.
The advantages of Shared Services have been broadly assimilated across the global landscape and account for the model’s increasing popularity across multinationals. One of Shared Services’ key characteristics – standardization – is particularly valued in Germany; in fact, standardizationis nearly twice as important for German Shared Services as it is for the rest of Europe, as a driver of SSO strategy.
Similarly, Shared Services’ positive impact on process optimizationand its ability to leverage the increasingly popular robotic automation solutions is weighing into the model’s continued popularity across Germany.
In the recently released visual analytics workbook (VAW), Germany vs Europe: Key Measures of Success, GBS Strategies, Digital Disruption (published by SSON Analytics) a number of additional trends defining – and differentiating – Germany’s Shared Services market are highlighted.
While the average German-based center’s maturity is generally ‘older’ than in the rest of Europe – more than a third of Germany’s SSOs fall into the 7-10-year category – there is a definite slump in the more mature (10+ years) category, where Germany’s 8% lags the rest of Europe (at nearly 30%).
While there are no great surprises in terms of functional specialization, data analytics does stand out: Nearly half of German Shared Services provide data analytics services compared to just over a third in the rest of Europe. Germany also leads in terms of the popularity of the GBS model compared to neighboring countries.
However, while nearly 7 out of 10 German Shared Services are currently implementing GBS, there are nevertheless significant hurdles to overcome, primarily lack of leadership alignment or other competing investments priorities. The big attraction of the GBS model for German organizations, right now, is its ability to more effectivelyleverage intelligent automation and global talent, while it’s being driven by enterprise demand for improved services agility.
Where German SSOs differentiate themselves from the rest of Europe is in targeting certain financial metrics, like working capital, as a measure of success. While this measure rates low across Europe in general, German Shared Services are focusing their attention on it. Productivity measures also rate more highly in Germany then in the rest of Europe.
Intelligent Process Automation has been sweeping across business support services in the past few years, driving performance steadily forward. German Shared Services, as per their global peers, have committed to leveraging this new technology. Only one out of four centers have so far not adopted RPA, with roughly 40% evaluating an RPA solution right now, and a third having already implemented one, and looking for additional value.
Processes like procure-to-pay are proving the most popular for initial automation, but HR services are also seeing growing interest. What’s going to be necessary to support growing automation is a cultural change, however, and German Shared Services seem to be highly aware of this. In fact, they are significantly more committed to driving cultural change than their regional peers.They are also taking a highly proactive approach to designing processes that will be able to leverage artificial intelligence and encouraging a fail fast learn fast approach.
Learn more about how German Shared Services Organizations match up to other European SSOs on a number of key trending topics in: Germany vs Europe: Key Measures of Success, GBS Strategies, Digital Disruption (published August 2018)
Note: SSON Analytics produces a wide range of Visual Workbooks that present real time data across regions, service models and industries. Survey results are blended with SSON’s proprietary data to provide unique insights and intelligence that help you drive the most appropriate course of action.
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