Introduction

Can all pathways, particularly those through a corporate finance shared service role, lead to the position of CFO? ACCA’s previous reports on finance transformation have dealt with models, technology, talent, efficiency, change and effectiveness. Yet, for finance leaders, what they do, and what it means for their career, especially if they aspire to a CFO position, is just as important. Is shared service and outsourcing as a discipline, as an assignment within the current financial value chain, of any value to careers? Does it attract the best and brightest finance professionals who want to be CFOs? Or are transformation roles a graveyard for those whom the organisation believes add value, but who are not expected to achieve the top finance job. It is time to be honest, brutal and very discerning about the benefits – and challenges – of following a career route through finance shared service and outsourcing.

Right now, a so-called urban legend positions finance transformation roles as a dead end for those who want eventually to occupy the top finance seat at the executive table. Perhaps that is because of the relative immaturity of the shared service finance model or perhaps finance transformers just have not had time to reach the top; perhaps it is because organisations need to amend their view of the capabilities now required to balance agility and risk, growth and compliance in increasingly complex market contexts. Or perhaps it stems from a lack of imagination, resulting in leadership development constructs that follow the more traditional pathway through controllership roles.

Can the organisation afford to relegate finance transformation professionals to a career graveyard in the face of rapid changes in markets, globalisation, technology, and management? Are the skills that leaders pick up in finance transformation roles not similarly transformative for the organisation as a whole? Should the value ascribed to the skills and capabilities that shared service and outsourcing leaders bring to the table be reassessed?

Does finance career path myopia have a silver lining for those who take on transformation roles, creating a different, perhaps more exciting future for finance leaders? Does assignment to shared service and outsourcing roles open up new career pathways not previously available – or at least not obvious – benefiting both the individual and the organisation? This report, informed by the ACCA finance transformation, shared service and outsourcing advisory board, looks into the pros and cons of taking on a finance transformation role.

1. Path to CFO through shared service and outsourcing – really?

Finance leaders on the ACCA finance transformation advisory board concur that the adoption of shared service and outsourcing models has inextricably changed the finance career trajectory. With over 80% of the Fortune 500 consolidating transactional finance processes in remote centres, the formerly vertical finance operations model has been upended. The traditional finance career equation has been disrupted.

Both organisational and personal benefits come from moving to finance shared service and outsourcing models. Organisations can standardise processes, reduce cost, and tap into the benefits that only scale and scope are able to provide. By moving offshore, finance services are able to access extensive new sources of talent and the finance organisation can potentially move up the value chain by freeing up management time and focusing on value-added roles such as business partnering, financial planning and analysis and strategy.

Similarly, there are some skills that finance professionals can hone only when finance moves to a consolidated model. Several capabilities – managing remote and often cross-cultural teams, managing change, and developing a greater level of customer focus can be harnessed effectively through time served in many finance leadership delivery roles.

Nonetheless, the question remains: are finance shared service roles an obvious pathway to the CFO position?

Shared service operations – and their leaders – generally have value in the eyes of C-suite leadership. In fact, the ACCA advisory board believes that the vast majority of CFOs with successful shared service or outsourcing models would not go back to a vertical model. IBM’s Sandy Khanna sums it by saying: ‘CFOs have embraced the fact that having an alternative service delivery model is really important for their own sanity’.

Yet are shared service functions a rich hunting ground for CFO material? The board attests that perhaps part of the problem is the relative lack of understanding of the skills finance professionals acquire by working in a shared service operation; perhaps it is because a higher value has traditionally been placed on planning and reporting, and other typically retained finance activities. As Chris Gunning of Unisys says: ‘I think audit experience, compliance control, risk management, whether it’s from one of your big four external firms or internally in the company can be more critical to the senior finance career path’.

Perhaps there is also a myopic view about where the pool of finance talent can actually be found. As Nigel Coffey of Pepsico puts it: ‘when it comes to selecting a CFO, I think the choice is a CFO who understands the numbers rather than who understands the back-office functions. There is snobbery in finance: the guys in the front of the house think they know the business; they think the guys in the back office don’t really ‘get’ the business. I would say that’s a very imbalanced function because I think the guys in the back office often understand the business better than the guys in the front’. Whatever the reason, it is apparent right now that there is often a dual career path for finance professionals – a clear path to CFO through the so-called retained organisation with a distinctly different pathway through shared services.

‘I think audit experience, compliance control, risk management, whether it’s from one of your big four external firms or internally in the company can be more critical to the senior finance career path’. CHRIS GUNNING, UNISYS

2. Career catalyst or the graveyard of ambition?

Can time served in a finance shared service role enrich the finance career? Is it a viable option for country CFOs or those with aspirations for controllership? Could a finance career move into service delivery help develop new leadership qualities? Or is career ambition compromised by such a move?

Earlier in his career, PepsiCo’s Nigel Coffey resisted a placement in the shared service organisation of the company where he then worked. ‘When I was asked to go into an shared service role, my first reaction was, “you must be joking”. I called it the graveyard of ambition; there’s no progression, no career. I said I’d give it two years contingent upon a guaranteed pathway back into the business. However, at the time I didn’t understand the complexity and the nature of the challenge’.

With time served in a shared service role, finance professionals are able pick up skills that are difficult to attain in other finance roles. Julie Spillane from Accenture considers the CFO role as two sided, on the one hand focused on strategy and investor relations, and on the other a traditional finance operational leadership with greater internal focus. She sees time in a shared service role potentially beneficial for the latter. ‘When I think about shared service and outsourcing experience I think it is extremely helpful for the CFO operational leadership role because you learn to be leaders of people, and how to organise and operate effectively’.

By its very nature, a shared service role can give access to the top CFO and can provide visibility for the person carrying out the role. Country CFOs, for example, who have spent time in a transformation arena may find that they suddenly have better access to the C-suite, more responsibility and vital global experience.

Country CFOs are not the only ones who could potentially benefit from a stint in a finance shared service role. Nigel Coffey succinctly confirms the value of a shared service rotation for ambitious controllers, saying that: ‘having some time in shared service is pretty essential if you’re going to be a good financial controller because you need to understand those blocks that create the data that you’re using’.

‘I spent ten years as a country CFO and I never met or spoke to the global CFO. On my very first day in shared service I was presenting to the senior leadership team. As a shared service leader you get access to a much more senior layer in the organisation than you will ever get as an individual country CFO’. NIGEL COFFEY, PEPSICO

Deloitte’s Peter Moller goes further, stressing that time spent in a finance shared service operation could now be seen as essential for today’s controller – but not for the top CFO position. The advisory board suggests that shared service experience alone will not make a finance transformation leader into a CFO. In fact the board is adamant that there must be a life before shared services, in more traditional finance roles. If you want to become CFO ‘you don’t start off in shared services’, declares Moller, ‘but you can use a position there to hone and supplement your finance skills’.

3. Out of sight, out of mind?

Is there a risk that moving to a shared service role means less visibility at group level? How important is wider enterprise buy-in to service delivery, or indeed CFO sponsorship? Does maturity or the culture of the finance shared service operation have an impact on the perceived value of finance leadership roles in delivery centres?

Some finance organisations with very mature – and successful – shared service and outsourcing models are now consciously plotting career pathways through shared service or outsourcing operations, acknowledging that the skills developed in these centres can be key to building a strong finance management bench as well as top-tier talent.

The ACCA advisory board also sees sponsorship as a critical success factor in nurturing shared service leadership talent and believe it can enhance the perception of the value of time served in a shared service environment. In short, the CFO’s belief and reliance on shared service plays a key role. Unisys’ Chris Gunning believes that ‘if you’ve got a CFO who’s a fan of shared services, it certainly helps people on the career path to higher seniorfinance-level positions’. In addition, the advisory board also highlights the importance of the right corporate culture. SpecSavers’ Dilesh Magdani says: ‘the company and their attitude towards leadership and people management weighs in on the value of shared services. Obviously I work for a company where it’s all about people and so leadership skills are more important than the technical aspects’. IBM’s Sandy Khanna concurs: ‘You’ll always find that the good finance leaders find great roles because they’re in demand’.

PepsiCo’s Nigel Coffey qualifies Sandy Khanna’s comment slightly, saying that the career path to bigger and better things still depend in great part upon the perception of the shared service function by the business: ‘If it’s valued, as it is in many mature organisations, it becomes an important talent pool’. He goes on to say that in companies such as Unilever, a shared service rotation is seen as an important step in ascendancy. Sandy Khanna agrees, saying that he has seen organisations that have deliberately moved individuals onto the fast track to finance leadership through transformation or shared service roles because they understand, and really value, the business experience gained.

Nonetheless, selling this view to finance professionals fixed on following a traditional career path is not easy, especially if their organisations have not yet designed and implemented career pathways that encourage them to take up a transformation role. Many country CFOs or controllers, doggedly following a traditional career trajectory, may still see a stint in shared service as a sideshow and may hold concerns of visibility.

‘If you’ve got a CFO who’s a fan of shared services, it certainly helps people on the career path to higher senior finance-level positions.’ CHRIS GUNNING, UNISYS

4. BPO as a source of CFO talent?

With so many finance organisations turning to the outsourcing model, another question arises: are business process outsourcing (BPO) providers a source of talent? They should be, given that the global trend to outsourcing and shared service in effect ‘hollows out’ the supply of talent by moving transactional roles out of the organisation, disrupting the traditional career pathways of finance professionals.

The ACCA advisory board suggests that it is difficult for finance professionals in business process outsourcing to move through a career trajectory to becoming a CFO on the client side. There is a view that the outsourcing provider’s role is to run a factory comprising strong transactional talent, not to serve as a breeder of CFO talent.

In addition, the finance and accounting BPO career construct itself may also get in the way of talent interoperability. Leaders relegate talented provider personnel into roles as executors of quality finance transactional tasks, not as aspirants to CFO roles.

The advisory board does not yet perceive the need to cultivate BPO-based talent as a source of finance leadership. They believe that ‘captive’ talent pools remain plentiful, obviating the need to build or look for talent in the provider ranks. Yet where do skilled finance BPO resources go for advancement? Although Chazey Partners’ Anirvan Sen sees provider personnel as ‘extremely hungry to move up the ladder’, there’s no clear answer. After all, shared service leaders with greater proximity and contextual understanding who are already in the organisation are naturally at the front of the queue when it comes to securing CFO roles. Perversely the advisory board sees the success of off-shoring as one of the key impediments as to why BPO roles may not be a future source of talent for the CFO role – put simply with more finance activities ‘pushed out’, there are fewer roles in the retained finance function to facilitate career moves towards the CFO destination.

As Unisys’ Chris Gunning says ‘the bulk of the finance jobs that we’re creating today are in India so I think there are fewer on-shore or near-shore opportunities for these staff to move through a career pathway to CFO’.

‘I would say our loyalty would be to our own colleagues first but if we can assist in the development of our partners and staff, absolutely. I have had people come in from a provider on secondment for one or two years to work with the business and it’s great development for them. But I would say even with that experience it’s very hard for them to make the jump into the CFO career path because they’re competing against people that already have 10, 15 years’ experience within multinationals’. NIGEL COFFEY, PEPSICO

5. Timing is everything

While finance leaders on the ACCA advisory board acknowledge that shared service roles are a valuable training ground in which to attain vital capabilities in leadership, virtual management, transformation and finance operations, they also acknowledge that, in some organisations, staying too long can be hazardous to the career plan if the finance professional’s ambition is to take on a top CFO job.

Specsavers’ Dilesh Magdani sums it up succinctly: ‘There’s a risk that you could get labelled as a back-office guy’. G4S’s Simon Newton also stresses that the pathway through shared service is a matter of careful timing: ‘getting in and out of shared service quickly or changing your career aspiration is important; 12–18 months is the right tenure unless you are moving down a career path that doesn’t include a top CFO role’.

Newton believes that at an advanced stage in a finance professional’s career, a rotation through shared service is less than advantageous on the pathway to CFO. ‘I think if you step into a shared service role typically you’re stepping away from the business, unless you’re doing it under two circumstances. First, if you are in an organisation which manages careers really well and sees a shared service role as a plus; or second, you’re relatively junior, relatively young and ticking boxes and getting experience’. He also emphasises the need for what he terms ‘recency’ in career management. On this point Nigel Coffey from Pepsico agrees, saying that corporate memories are short: ‘What you did a few years ago can be long forgotten’.

Once in a shared service leadership role, how do you move back out to the business? Do you leave the organisation, moving into another, larger SSO role? What’s your logical next step? The advisory board generally agrees with G4S’s Simon Newton that there is some length of shelf life to a shared service leadership role, regardless of personal career aspiration. That ‘shelf life’ may not be in a transformation role per se, but rather in a specific organisation.

‘I think you have to move. That’s what I did after a long career with another company. You’re looking for a new challenge and you move and you find the organisation that’s going to provide that new challenge’, says Nigel Coffey.

One of the challenges of shared service is its lifecycle – change the model, then run the model. For leaders up to the transformation challenge, the change part – albeit with all its difficulties, such as recalcitrant stakeholders, developing a successful outsourcing provider relationship, standardising processes, putting in new technology – is an adrenaline high for many. Once the model is bedded down, the ‘thrill’ is gone and it is probably time to move on.

Shared service management can also be parsed as a series of projects. Once a project is completed, boredom can set in and the challenge is gone. ‘I think by the nature of what we do it tends to be very project-type-related. When that project comes to an end or is getting too staid and steady, I think some leaders will pick up sticks and move on to the next challenge, and that may require that they change company’, says Nigel Coffey.

‘Getting in and out of shared service quickly or changing your career aspiration is important; 12–18 months is the right tenure unless you are moving down a career path that doesn’t include a top CFO role’. SIMON NEWTON, G4S

6. One career door closes, another one opens

Here is a bit of heresy: perhaps a CFO role as an aspiration is just not big enough or good enough for the successful finance transformation leader. Are there other career options on the table for aspirational shared service and finance transformation leaders with broader appeal?

Could we posit that the skills a finance leader picks up running a global business services operation or large shared service centre are better placed, and can create as much (if not more) value in other parts of the organisation? Perhaps the importance of running a major shared service operation, which is concentrated on transactions, statutory reporting or (as is increasingly the case) financial insight and data analytics, should not be underestimated.

For many finance transformation leaders, a pan-enterprise opportunity to make the organisation more effective and efficient may be more tempting as a career aspiration. ‘Perhaps a COO path is as good, or even better, next step, for the finance transformation leader’, posits Peter Moller of Deloitte.

Andrew Bacon concurs and says, ‘maybe it’s not the best route to CFO but for somebody who’s entrenched in finance, the move into a more operational role might be a good move toward a CEO role’. In short, he suggests that shared service provides a great breeding ground for broader leadership talent, but maybe not for CFO talent.

'We don’t want to be the bean counters of old. Ask 100 shared service leaders and you’ll find that few aspire to be the traditional CFO’. ANDREW BACON OF DOOSAN.

Transformation roles may provide different opportunities for growth to controllership or roles outside the finance organisation. Unisys’ Chris Gunning adds ‘I think what’s interesting now is the movement to global business services or GBS (aggregating all business delivery functions under one functional group). While traditionally finance shared service sat under the CFO function, now the head of the GBS function, often the former head of finance shared services, is at the same table. As far as the executive committee is concerned, the CFO and the GBS leader are almost equals. It’s a different route; the finance shared service leader now says “I’m not part of the finance team. I’m going to run the business team separately while one of my many stakeholders is now the CFO”’.

7. Final thoughts

How do finance leaders manage their own career paths to a CFO position if they find themselves in a transformation role? Or how do they position themselves to move in other equally satisfying directions? According to the experience of the ACCA advisory board, there is no single answer but here are some considerations for those currently in finance transformation or shared service roles, or contemplating a career turn through such a role.

CONTEXT MATTERS

Some organisations prize the value that finance transformation brings to the organisation, while others still view shared service and outsourcing merely as a factory for transactional, rules-based work. Finance leaders need to look closely at a number of factors before taking up a transformation role or considering the length of stay in a leadership position. It is critical to ask several questions.

• How aggressively is top leadership moving to a services model? Is it an enterprise sideshow, or part of an overall plan to transform the business?
• Do those working in outsourced or shared service centres have access to management, or does the organisation only prize silent running (the ‘out of sight/out of mind’ view of the world)?
• Does the CEO or CFO actively sponsor the move to shared service or outsourcing? Has he or she pushed it as part of the corporate mandate?

LOOKING OUT FOR ROLE MODELS

Many finance transformation leaders are pioneers, the first occupants of their jobs. Nonetheless, some organisations have been engaged in finance transformation for over 10 years, which can seem a lifetime in corporate history. What happened to the previous transformation leaders? If they have moved on into other, perhaps larger or more responsible corporate roles within the organisation, the shared service job is probably not a career-ender. If the previous incumbents have taken on bigger roles in another company, it is likely that the organisation is seen as a best practice operation and a breeder of good talent. In either case, time in that shared service organisation need not always be a career-limiting move.

TIMING IS (ALWAYS) EVERYTHING

While the ACCA advisory board generally agrees that watching the calendar is a good thing for those in finance shared service roles, keeping an eye on the corporate agenda and the leadership cast of characters is also important. Organisations do shift their approach to business service models, often as a result of a change in top leadership. Not all CEOs or CFOs are converts to the concept; with a management change or a merger, the career prospects for the most senior of finance transformation professionals can be swiftly turned inside-out.