The concept of shared service centers has been around for a number of years now. But now that they are common, what is the next step to driving out cost from your business?
Administrative functions, by their nature, are repetitive activities (hence the belief that a common way of operating is appropriate).
Do we just continually move geography to lower cost – creating an endless number of shared service centers?
Automation has been creeping in everywhere since computing began. We see manufacturing lines with full automation. We see GPS navigation equipment to avoid the need to refer to maps. We see RFID chips to optimize inventory tracking.
What about financials? We have seen the advent of ERP tools, such as IFS Applications. I think there might be a little further that we can go.
The vast majority of transactions in any business can be accounted for automatically (that is why in IFS Applications we have Posting Controls). The bigger question is how can we automate the remainder (and whether we can automate the remainder), the project loss provisions, the revenue adjustments, the subjective bad debt provisions.
The benefit of automation is the consistent process that is followed, but clearly this is also the reason that these more subjective transactions are so difficult to prepare on an automated basis.
For a really interesting article on how greater and greater automation could creep into the finance function, read this article about The Future of Finance.
For decades there has been the mantra of the “paperless office” – could these two concepts be about to come together?
How can you drive more automation into your reporting?