Shared-service centres offer compelling cost and operational efficiencies as digital technologies increase the possibilities for automation and analytics. So why are so few companies using SSCs for treasury?

Shared-service centres (SSCs) are used by some companies in the treasury space for centralising payments, invoicing, accounting, tax and other financial processes. It's a model that has great potential but, according to the 2015 Global Corporate Treasury Survey by Deloitte, only a minority of companies currently have an SSC for treasury functions, with the favoured treasury model for companies of all sizes being the traditional corporate treasury. Of companies with revenues greater than $50 billion, just one per cent have a SSC model, while 10 per cent of companies with revenues of $10-$50 billion have a treasury SSC.

And although Deloitte's survey suggests that companies expect to have more treasury SSCs in future, some analysis just published by McKinsey also suggests that SSCs have enormous potential to achieve efficiencies as companies become increasingly digital in all their operations, interactions (internal and external) and processes. However, McKinsey reports that SSCs in most companies are not yet ready to fully embrace digital processes. It found that fewer than one-quarter of companies surveyed have begun to develop the digital capabilities required to improve internal processes, interact with customers and partners more efficiently, and create innovative products and services.

Some of the challenges that companies face in developing digital SSCs include:

• constraints relating to process and work flow;
• talent and skills development;
• operating models;
• integrating legacy systems;
• conflicting strategic priorities within the leadership team.

The research from McKinsey found that companies in most industries are still in the exploratory phase when it comes to how they can use digital technology and widespread adoption has not yet happened. It came up with the following findings:

• Only about 22 per cent of the SSCs in McKinsey's survey, which were shared-service organisations in general and not limited to the treasury function, are beginning to automate processes.
• It also found that nearly 20 per cent of the SSCs have invested in streamlining internal operations through analytics (for instance, by using real-time management information systems).
• Only 10 per cent are using analytics for external use to support the business.

The following approaches are suggested to address the challenges of bringing SSCs and IT in line with the digital environment:

Streamlining process and work flow

This involves choosing processes suitable for automation, which can be done by categorising back-office activities and processes according to business purpose, system interdependencies and level of manual intervention required. Some processes and activities can be fully automated, while some should not be automated at all and others might benefit from a hybrid approach.

A new skills model

SSCs in the digital era will need fewer staff working on data entry or rules-based decision making, for example, while they are likely to need a larger number of small teams of experts in technology and specific areas of expertise to work together. Finding the personnel for this work may mean looking outside traditional talent pools.

Factor in changes to the operating model

As the digital era is just getting started, teams planning and managing SSCs should allow for continual business-model renewal so that, as new technologies emerge, these can be adopted. IT and operations groups will have to work more closely together in SSCs in future.