The administrative machine

Exploiting efficiency reserves in administrative processes

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Stern Stewart & CO. GmbH
Salvatorplatz 4
80333 Munich

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MANAGEMENT SUMMARY

The trend can be readily detected, and it is certainly not new: corporate headquarters increasingly are streamlined, focus their official functions on strategy or management, and outsource administrative processes to shared service centers. Around 70 percent of Germany’s large businesses are already structured in this way, particularly in the areas of accounting, personnel, purchasing, and IT – or they are currently driving forward projects to form such structures.

This is clearly a logical step: large-scale processes such as payroll accounting or invoice processing are bundled and standardized throughout the company in order to obtain efficiency benefits in processing, while simultaneously obtaining positive quality effects. And this is extremely successful: in many cases, the companies managed to achieve cost savings in the order of around 15 percent.

Nevertheless, the administrative machine actually has much greater efficiency potential. Unexploited potential exists when there is a lack of consistent theorizing, when organically evolved structures and processes are optimized only half-heartedly, or when the almost uncanny cost lag in the administrative areas prevents the exploitation of cash flow and result savings potential.

Experience has shown that consistent action can produce sustainable cost-saving effects of more than 30 percent. The optimization of the administrative process environment should, therefore, be included on every management agenda as an important performance lever.


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