Creating a Shared Services Delivery Environment to Enable Cost Savings and Improved Customer Service

Executive Summary

A global hospitality group wanted to create a shared services center-based delivery model for its finance and accounting (F&A) functions, but the magnitude and complexity of its overall organizational make-up, and lack of shared services knowledge, hindered its ability to move the initiative forward. As a result, it engaged Everest Group to create an optimum F&A shared services operating environment.

The Client’s Challenge

Each of the hospitality group’s more than 1,200 hotels – spread across the United States, Europe, and Asia – had onsite accounting for all of the finance processes including reservation-to-cash, requisition-to-payment, general accounting, point of sale, and management reporting. More than 4,000 full time equivalents (FTEs) were covering a global footprint of both luxury and budget hotels were included in the initiative. There was a mix of client-owned, client-managed and franchised hotels, which greatly complicated the stakeholder buy-in efforts.

Insight to Action

Everest Group initiated a rigorous data collection activity to capture baseline costs and construct a comprehensive view of the current accounting environment (FTEs, costs, application environment, and organizational structure). Everest Group then designed a shared services-based future state operating model to enable greater consistency, efficiency and service quality to the hotels while creating substantial overall cost savings in the accounting function. This involved reshaping the client’s complex accounting process footprint into shared services in three world regions (Asia, Europe and the United States), designing the future state retained organizational structure, creating job descriptions and analyzing different sites to select where the shared services centers would be located. 

Impact

Everest Group was able to rationalize the client’s accounting base from more than 4,000 FTEs down to 1,750, enabling it to realize savings of more than 50 percent in its accounting function payroll run rate. The effort also enabled the company to achieve greater consistency and higher service quality via the shared services center operational delivery model, and dramatically enhanced management reporting.