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ACCA Strategic Professional · Strategic Business Leader · Finance transformation

Orvane Ltd moved its finance transactions to a shared service centre in a low-cost country two years ago. Costs fell, but business units now report slow responses to non-routine queries, staff in the SSC have low morale and high turnover, and local managers say they have lost understanding of the underlying transactions. Which is the most likely underlying weakness in the design?

The likely weakness is that the SSC was run as a cost-focused processing factory, with poor service-level management, limited career development and loss of local knowledge. These issues are well-known SSC risks; the savings achieved show that centralisation itself can work when the service is properly designed.

  1. AThe SSC was given too many performance measures
  2. BThe SSC has been treated as a low-cost processing factory, with weak service-level management, little career development and loss of local knowledge, rather than being designed as a service-oriented unitCorrect
  3. CThe company has too many business partners
  4. DCentralisation of transactions is inherently incapable of delivering any savings

Explanation

Typical SSC problems are loss of local knowledge, poor handling of exceptions, weak career paths and high turnover when the focus is only on cost. Savings have in fact occurred, so the idea that centralisation cannot save is wrong. The symptoms point to design and management of the service, not the number of measures or partners.

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