Gartner Survey Shows Finance Teams Fail to Realize the Full Value of Shared Services

Key Issues Facing CFOs to Be Discussed at Gartner CFO & Finance Executive Conference, June 10-11, in Washington, D.C.

ARLINGTON, Va.--()--Fifty-one percent of shared-service users in finance departments either do not accept or are indifferent to the benefits of these services, according to a recent survey by Gartner, Inc. This survey of 1,500 employees and 50 shared-service leaders shows that this lack of commitment to shared services correlates strongly with several costly outcomes for businesses, such as 29% more service disruptions, 19% more customer complaints, and implementation delays being five times more likely.

“CFOs and finance leaders must get better value from shared services and accept that their commitment is vital to delivering on cost optimization goals that often are part of a shared-service strategy,” said Sanjay Champaneri, director at Gartner. “Resistance or indifference to shared-service initiatives among finance end users or ‘customers’ is highly correlated with delays, service disruptions and complaints.”

At a time when 89% of shared-service organizations have more work to do and 57% have less money to do it with, finance organizations must show commitment to shared services to derive maximum value from them and fulfill cost optimization priorities. Notably, resistance to shared services is highest during the critical adoption phase (see Table 1).

 

Table 1. Prevalence of Resistant, Indifferent and Committed “Customers” of Shared Services

        Commitment Level
      Resistant     Indifferent     Committed
  Description    

Believes that the shared-
service organization does
not fully understand its
operations and can’t
deliver services as well as
it can.

   

Understands the reasons
for shared services, but is
not convinced that the
benefits outweigh the
drawbacks.

   

Actively partners with the
shared-service
organization and serves
as an advocate.

 

 

General distribution of
“customers”

 

    26%     25%     49%
 

 

Distribution of customers
at time of adoption of a
new shared-service
offering

 

    51%     17%     32%

n = 1,500
Source: Gartner (May 2019)

“A smooth adoption phase is critical to delivering ‘quick wins’ with shared services, yet at this point we find that even generally committed customers can become resistant,” said Mr. Champaneri. “The most powerful objections to shared services, felt by 58% of customers, are those relating to harm from adoption: loss of jobs, loss of departmental control over key processes or loss of information. Finance leaders have a vital role to play in helping shared services address these concerns and build commitment among customers.”

Communication is another highly significant success factor for shared services, and yet it is an area where shared services organizations are failing badly. Just 6% of shared-services leaders consider their organization “highly effective” at increasing customer commitment. Customers feel the same way, with none of the 1,500 respondents agreeing that shared services’ communications were their primary source for developing an opinion about these services.

“The key to developing customer commitment is openly and objectively communicating the total impact of working with shared services, without trying to sugarcoat or omit the bad parts,” said Mr. Champaneri. “Seventy-one percent of customers who understand the total impact of shared services report themselves likely to do future work with shared services, compared with just 22% of customers who don’t understand the total impact.”

Only 16% of shared-service organizations have created an objective understanding of the total impact in their customers. This partly explains the high rates of resistance seen in the survey.

“To improve the value derived from shared services, leaders should focus on better understanding levels of resistance and commitment in their internal customers. Once the drivers of resistance are clearly understood, the next phase is to communicate better with the customers to help improve their understanding of the total impact of shared services, which correlates strongly with higher rates of future commitment,” said Mr. Champaneri.

Gartner clients can read more in “Expanding Shared Services Value.” Mr. Champaneri will examine the topic in more detail at the Gartner CFO & Finance Executive Conference 2019, to be held from June 10 to 11 in Washington, D.C.

About the Gartner CFO & Finance Executive Conference 2019

CFOs and senior finance executives wanting to learn more about the trends that will shape finance, company performance and personal leadership are invited to attend the Gartner CFO & Finance Executive Conference 2019, to be held on June 10 and 11 in Washington, D.C. Follow news from, and updates on, the conference on Twitter at #GartnerFinance.

About Gartner for Finance Leaders

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Contacts

Justin Lavelle
Gartner
Tel +1 571 230 0816
justin.lavelle@gartner.com

Contacts

Justin Lavelle
Gartner
Tel +1 571 230 0816
justin.lavelle@gartner.com