• Technology
  • CFO Magazine

Share Where?

Shared services centers helped companies eliminate redundancies. Now the web may eliminate the centers.

What’s in a name? Ask Donald Janson, director of the artfully named Common Administrative Resources (CAR) unit at Ingersoll- Rand. CAR by any other name would be known as “shared services,” but Janson says that given the highly independent nature of the eight divisions that make up Ingersoll-Rand, and the fact that “shared services has, for a long time, been associated with centralization,” the Woodcliff Lake, New Jersey, company decided that new terminology was in order. While the concept–consolidating functions in the name of efficiency–is still valid, Janson says that “shared services” is hamstrung by too many “bad connotations.”

But CAR is more than a euphemism; it’s an embodiment of what many observers say is the next wave in shared services. And unlike the first wave in the early 1990s, this one will have little to do with centralization.

Instead, Web technology promises to eliminate much of the transaction processing traditionally handled by shared services centers by pushing finance, human resources, and myriad other processes out to individual employees and managers–and even to suppliers and customers. Online forms will not only capture but also act upon the information that employees enter, so that shared services centers can offload data-entry duties and focus on customer service, exception handling, and process improvements.

Ingersoll-Rand’s Web- enabled expense reimbursement system from IBM, for example, allows employees to view their American Express bill online and transfer charges onto their expense account with the click of a mouse. That triggers an automatic payment to American Express, while cash reimbursements appear in employees’ paychecks. “We have eliminated the accounts-payable process from travel,” notes Janson, who previously oversaw shared IT, HR, and finance processing services at Westinghouse’s Telecomputer Center in Pittsburgh. And after Westinghouse bought CBS in 1995, Janson designed and implemented the broadcasting giant’s shared services center in Manhattan to handle finance transactions.

In a similar vein, Ingersoll-Rand uses an E-procurement system from Oracle Corp. that allows any authorized employee to order indirect materials (such as office supplies) from online catalogs. “Just about everybody can be a buyer now,” Janson says. The system is up and running in the company’s Huntersville, North Carolina, shared services center, and was being rolled out to 22 additional sites this summer. Janson hopes to deploy the same sort of system for direct materials–the inventory needed for manufacturing–beginning in October, but admits it won’t be easy. “Direct materials is much more complicated to address,” he says, “and will require bleeding-edge technologies.”

Instant Gratification

At Atlanta-based Southern Co., which has had some form of shared services in place since the 1950s, Web technology is fast becoming an important part of the mix. “Even mundane things like making changes online to your insurance plan or your 401 (k) account have allowed us to wring out a lot of costs,” says Allen Leverett, vice president and treasurer of Southern. And the company uses Web-based surveys to measure the efficiency of internal business systems and procedures, which also helps to save money by reducing paper and survey-processing costs. Leverett says that in today’s culture of instant gratification, employees prefer the asynchronous nature of the Web. “They don’t have to set up a time to talk to someone in shared services. They just use the information on the intranet.”

Discuss

Your email address will not be published. Required fields are marked *