Research On The Implementation Of Financial Shared Service Center In Multinational Companies

Enterprise finance management is starting from decentralized method. As a functional department of an individual enterprise, finance department handles the accounting and financial management of the company. In history, multi-national companies follow this decentralized financial management method as well, by setting up finance department for each of their subsidiaries. The fast expanding business scale and geography coverage of multi-national companies are investing more resources on standardization of financial management process, and execute the standardized process via share service center. This is a centralized method to improve process, reduce cost and enhance financial monitoring.The globalization of economic environment speeds up the business growth of multi-national companies (MNC). At the same time, the development of information technology enables MNCs to standardize and centralize their financial activities into SSC. It is reported that more than half of Top 500 Global corporations and 90% of MNCs had implemented FSSC. As a creative management method, FSSC is in the spotlight of business world.Johnson Controls is a MNC located in USA, top 500 corporation in the world. In 2012, Asia Pacific of Johnson Controls decided to adjust its globalization strategy by establishing its FSSC in Dalian, to centralize those subsidiaries in Asia Pacific into this FSSC. This strategy move is to facilitate business growth, optimize organization structure, improve efficiency, reduce operational cost and maximize the value of the company. The company believes the centralized management can provide professional manufacturing and service to internal customers. This paper analyzes the implementation process, process control and the influence, problems, solutions during its implementation by reviewing the history of FSSC and the fundamental theory of share service. The advantages and limitations of FSSC are reviewed and the corrective actions and key focus points during its implementation are pointed out, to ensure it is in a healthy development. Also, hope the paper can provide a reference to the companies which are in the implementation of FSSC.