As with evolution in the natural world, statutory reporting and the means by which it is delivered has continued to change. Changes in organisational structures and technology have resulted in the sometimes rapid change in process and delivery of statutory reporting.
It is possible to identify three key periods which impacted on statutory reporting: centralisation, standardisation and finally automation.
In this series of blogs we discuss how these changes came about, the individual characteristics of each and the impacts they have had. In the first of these blogs we will focus on centralisation.
Evolution of statutory reporting: Centralisation
Prior to the impact of centralised models, statutory reporting was seen as the preserve of in-country specialists and required detailed local knowledge and understanding. Organisations looked to decentralised delivery models, either with local own finance/third party specialists managing the process and delivery of statutory reporting. However with the growth of Shared Service Centre (SSC) delivery models and as functions began to migrate into these SSC’s, organisations began to see the benefits which accrue and it only became a matter of when, statutory compliance would come under this radar.
As organisations centralised ownership, responsibility and control of the statutory compliance process, benefits such as greater control of costs, monitoring of progress and pro-active identification of potential issues began to accrue.
Evolution of centralisation models
However as with evolution in the natural world, varying forms of models began to emerge as organisations looked to the best fit for their particular needs and future growth.
Some organisations looked to centralise as much activity as possible into regional or global centres, with a dedicated statutory team managing end to end compliance and related audit. This model subsequently evolved into the growth of Centres of Excellence (COE), as the central teams become experts in statutory reporting, the adoption of new standards such as IFRS and global owners of international compliance.
Other organisations looked to outsource the process of statutory reporting, while maintaining overall ownership and control. This model evolved into a single outsource provider, supporting in-house global statutory reporting process owners, through a centralised outsourced delivery and relationship model.
Finally other organisations developed hybrid models, comprising of elements of both the previous two models. Such models centralised certain activity, while outsourcing remaining activity to one provider, managed through a central relationship structure.
The impact of centralisation was to break the idea that statutory reporting could only be delivered through a decentralised in-country expert model. As centralised models evolve, changes still occur and differing sub-models continue to develop to meet the needs and requirements of changing organisations.
In our next two article’s, we will see how the drive to consistency and standardisation and now the growth of technology has further impacted on how organisations manage statutory reporting and compliance.