Sapient Strategic Advisors

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Business unit accountability: Establish clear expectations up front

Setting expectations early on is critical for a successful transition of Finance processes from the Business Units to a Shared Service Center.  These expectations should be spelled out in a Service Level Agreement (SLA).  The SLA is not necessarily a legal agreement between the Business Units and the SSC, but rather a written understanding of the rights and responsibilities of each party.  The goals of the SLA are as follows:

  1. Set expectations between the Business Units and the Shared Service Center
  2. Enable performance monitoring
  3. Provide a pricing mechanism for services
  4. Provide an escalation path for issues
  5. Allow parties to modify as needs change

 

Listed below are the major components of a Service Level Agreement: 

  1. Processes and services provided
  2. Key performance commitments
  3. Key process and performance measures
  4. Transaction volumes and process activity 
  5. Service pricing and billing approach 
  6. Dispute resolution and escalation clause
  7. Roles and responsibilities of each party during transition
  8. Roles and responsibilities of each party ongoing
  9. Provision for scope changes and renewal

By creating a Service Level Agreement that clearly spells out the rights and responsibilities of each party, the Business Units can remain engaged with the processes rather than turning them over and absolving themselves of any responsibility.  The challenge is making the agreement specific and firm enough to provide clarity but flexible enough that it can be modified as the needs and capabilities of the parties changes over time.