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Navigating the World of Shared Services

By Olivia Berkman The most commonly cited advantage of setting up a shared services organization is labor arbitrage, but the benefits don’t end there. Shared services can be a key enabler for process optimization by centralizing disparate processes occurring around the world and enhancing the control environment.   During a panel discussion of the pros and cons of leveraging shared services at this year’s Current Financial Reporting Conference presented by Financial Executives International, panelists emphasized the proper transfer of knowledge and having a stable local process in place as keys to success.   David Cornish, Senior Vice President and Deputy Controller - Global Record to Report at American Express Company, shared one of his biggest takeaways from the progression. He advised, “When moving a process to a centralized function, one of the things we really look to do as part of what we call ‘lift and shift’ is making sure that you have a stable process developed locally before you shift it into the low-cost location.”   A question from an attendee around access to the ledger brought about a larger discussion on control. Cornish described how American Express is addressing the issue, “About five years ago, we probably had 7,500 people who had access to the general ledger. One of our key initiatives was to think about who needs that access to read and/or post. We’ve been narrowing it down in a significant way over the past several years.”   Terry Wright, Vice President Shared Services at Pfizer shared, “We also look at certain markets that have a high risk profile. While we haven't done this yet, we're considering whether it would limit the access of those types of accounting activities going forward. I have not made that move, but we're considering it.”   When it comes to ownership of lower-cost locations, the consensus was to divide responsibilities between leaders from the operations and reporting side. For Cornish, that means having a leader who's responsible for operational activities and another who's responsible for SEC reporting activities.   Wright shared, “We have a single owner of each of the functions. So, we have a single Record-to-Report and a single head who has that responsibility. That person would have responsibility for the function within the sites, the capital sites as well as the third-party...

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