2024 Public Sector Perspectives

For example, the World Bank recently celebrated the 20th anniversary of its flagship SSC in Chennai, India. The largest World Bank Group (WBG) office outside the U.S. headquarters, the Chennai center employs 1,200 staff and provides accounting, finance, HR, and IT services to over 130 international offices of the WBG. 2 In addition, UNICEF has its Global Shared Services Centre (GSSC) located in Budapest, Hungary supporting more than 150 UNICEF offices and over 16,000 staff globally. The GSSC supports HR, payroll, finance, and helpdesk services. By centralizing these services, UNICEF field staff can more efficiently support the most vulnerable children across the world. 3 When a SSC makes sense Given the need to make effective use of their budgets and free up funds for operational objectives, it is prudent for supranationals to investigate opportunities to establish a SSC (or expand the competencies of an existing center). To determine whether a supranational would benefit from a SSC, it can be helpful to audit existing operations and processes, analyzing various characteristics across different locations, such as: • Breadth of geographical presence • Scale of local administrative functions • Prevalence of non-standard processes/compliance with best practice • Redundancies across offices • Compatibility of IT systems across locations • Ability to access technologies • Use of local or temporary solutions • Support costs • Varying service levels. Given the scale and complexity of supranationals – and the myriad range of locations where they often execute various administrative and other functions – many could benefit from a SSC. Supranationals with SSCs can achieve economies of scale, greater control, lower labor costs, and reap the full benefits of investments in technology, standardization, and integrated procurement. Investing in a SSC could also enable supranationals to enhance customer service for both front- and back-office services, better leverage specialist skills, increase management capacity, warehouse data more effectively, and elevate controls. What role does digitization play? Digitization is a broad objective for supranationals and often has an operational dimension. For instance, it can deliver financial inclusion and accelerate economic development. Moreover, as newWorld Bank President Ajay Banga recently noted, digitization has an important role to play in improving governance. The World Bank recently announced a collaboration with the Inter-American Development Bank with this objective. In the context of SSCs, digitization is both a key driver for the introduction of a SSC and for generating increased efficiencies within existing SSCs. Most obviously, digitization allows supranationals to streamline and automate their business processes. SSCs can leverage digital tools and technologies to process transactions, handle inquiries (with faster response times and better self-service options), and manage data more efficiently. This results in cost savings through reduced manual labor and improved process efficiency. Digitization facilitates the standardization of processes and workflows across different departments or business units within a supranational. This consistency helps to achieve economies of scale and ensures that services provided by SSCs are uniform and of high quality. As well as improving efficiency, digital systems can help eliminate errors associated withmanual data entry and processing, ensuring that information is accurate and up-to- date. This data can then be used for reporting; it can improve compliance with regulations and internal risk management policies; digital tools can also help to track andmitigate risks. Once there is a sound foundation of reliable data, analytics can be deployed by the SSC to generate insights that identify areas for improvement within the SSC and facilitate better-informed data-driven decisionmaking across the organization. A key benefit of digitization in SSCs is the ability to easily accommodate growing business needs. As supranationals expand or experience fluctuations in workload, SSCs can scale more easily when their processes are digitized. Similarly, this flexibility means that supranationals with multiple SSCs – serving different regions, for example – can easily shift tasks between locations as required or even operate remotely (such as during events like the pandemic when many employees worked from home). Moreover, digitization means that knowledge can be shared – and collaboration achieved – by SSC employees even if they are not in a single location. 2 h ttps://www.worldbank.org/en/news/press-release/2021/12/13/the-world-bank-group-celebrates-20-years-of-presence-and-partnership-in-chennai 3 https://www.unicef.org/gssc Deloitte’s 2023 Global Shared Services and Outsourcing Survey showed that automation is a critical digital enabler for shared services (see chart below) and is expected to be a key focus area in next one to three years. Centralized analytics reporting and performance dashboards has jumped sharply fromninth position in 2021 to fourth position in 2023, while global standard processes and self-service capabilities are seeing increased traction as top focus areas for companies in the next one to three years. 4 Conclusion: SSCs and digitization go hand in hand Supranationals play a critical role in today’s world. However, many of themwere created decades ago and their missions – and geographical remits – have changed markedly. For instance, the European Bank for Reconstruction and Development was established to support the transition of former communist countries in Eastern and Central Europe, as well as some former Soviet republics, to market-oriented economies. Now, it is at the forefront of support for Ukraine as well as finance for the green energy transition. As supranationals grow their operations, duplication of administrative and other support functions steadily reduces efficiency and control. Moreover, many supranationals find themselves with multiple legacy technology solutions, such as enterprise resource planning or treasury management systems, that are incompatible or out of date and compound these challenges. SSCs – combined with effective digitization – are a key solution to these challenges. SSCs can play a crucial role in helping supranational organizations achieve their goals by enhancing efficiency, reducing costs, improving transparency, and allowing them to focus attention and resources on their core missions and strategic objectives. And digitization is a critical enabler for SSCs, allowing them to operate efficiently, provide consistent and high-quality services, adapt to changing circumstances, and drive cost savings and strategic advantages for the entire organization. Crucially, by providing efficient and standardized services to member countries, SSCs and digitization can strengthen relationships and collaboration among member nations, promoting unity and cooperation while driving economic prosperity and helping supranationals to more effectively fulfill their mission. Citi is able to leverage its own transformation journey as a global bank to help its supranational partners to build SSCs and accelerate digitization as they reshape operations to meet future challenges. For more than three decades, Citi has utilized its unrivaled global footprint and comprehensive suite of solutions, including centralized payments, collections and custody, to meet supranationals’ needs wherever they operate and empower them to achieve their objectives in a fast- changing world. 4 h ttps://www2.deloitte.com/us/en/pages/operations/articles/shared-services-survey.html Citi Perspectives for the Public Sector 47 46 Supranationals: Shared Service Centers and Digitization Can Be Transformational