What is Managed Services Model?
Definition
The Managed Services Model is a strategic framework where organizations outsource the ongoing management of specific finance or operational functions to specialized providers. This model emphasizes predictable service delivery, enhanced business performance, and cost optimization while leveraging the provider’s expertise in areas like Robotic Process Automation (RPA) in Shared Services, invoice processing, payment approvals, and cash flow forecasting. It integrates technology, standardized processes, and performance metrics to ensure operational excellence.
Core Components
A robust Managed Services Model typically incorporates:
Service Scope: Clearly defines which processes, such as accounts payable or accounts receivable, will be managed externally.
Governance Framework: Uses Shared Services Maturity Model and Managed Services Transition principles to monitor SLA adherence and process compliance.
Technology Integration: Implements Robotic Process Automation (RPA) in Shared Services and Business Process Model and Notation (BPMN) to optimize workflows and reduce manual intervention.
Performance Metrics: Monitors Days Sales Outstanding (DSO) and cash flow forecasting to measure operational efficiency.
Continuous Improvement: Encourages ongoing process enhancement through analytics, feedback loops, and provider expertise.
How It Works
Organizations select functions suitable for outsourcing and partner with a managed services provider who takes responsibility for end-to-end management. The model integrates Robotic Process Automation (RPA) in Shared Services and analytics tools to standardize processes and ensure business performance. Clear Service Level Agreements (SLAs) define expectations, while governance frameworks track compliance, risk, and efficiency.
Practical Use Cases
Managed Services Models are particularly effective for:
Managing accounts payable and accounts receivable at scale across multiple regions.
Standardizing invoice processing and payment approvals within Global Business Services (GBS) Model.
Implementing Shared Services Model transformations with automation and data-driven insights.
Enhancing cash flow forecasting accuracy through consistent monitoring and provider expertise.
Supporting Managed Services Transition projects to move processes from in-house to managed providers efficiently.
Advantages and Outcomes
Key benefits include:
Predictable business performance and improved operational efficiency.
Cost optimization through access to specialized resources and Robotic Process Automation (RPA) in Shared Services.
Faster execution of invoice processing and payment approvals.
Enhanced cash flow forecasting and financial reporting accuracy.
Scalable solutions to support Global Business Services (GBS) Model expansion and cross-border operations.
Best Practices
To maximize effectiveness of a Managed Services Model:
Define process scope, roles, and SLAs clearly at the outset.
Leverage Robotic Process Automation (RPA) in Shared Services to standardize and accelerate workflows.
Establish governance via Shared Services Maturity Model and Managed Services Transition frameworks.
Implement analytics dashboards for cash flow forecasting and Days Sales Outstanding (DSO) monitoring.
Encourage continuous improvement through feedback, reporting, and process redesign initiatives.
Summary
The Managed Services Model enables organizations to outsource finance and operational processes to specialized providers, enhancing business performance, accelerating invoice processing and payment approvals, and improving cash flow forecasting and financial efficiency. By combining automation, governance, and performance metrics, companies achieve scalable, predictable, and cost-effective operations.