Presentation for Las Vegas Chapter of IIA
Rick Arpin
October 24, 2013

• Background of shared services
• Shared services at MGM Resorts
• Finance shared services at MGM Resorts
2

What is Shared Services?
• Leverage resources
• Lower costs
• Quality of service
• Delivery across an entire organization
Shared services is a business model that enables resources to be leveraged across an entire organization resulting in lower
costs with agreed upon customer-service
levels. In many instances, Shared
Services is a separate business unit created within a company or agency accountable for delivering a suite of
services to both the operating business units and the corporate functions.
Source: Peeriosity.com
3

1980s 1990s 2000s 2010 and Beyond
General Electric
Proctor & Gamble
HP
Back Office:
Finance
IT
HR
Outsourcing/offshoring through companies like:
• IBM
• Accenture
• Infosys
Focus on technology and process improvement
Widespread adaptation across industries, even medium-sized companies
• Internet / cloud
• Document imaging
• Mergers and acquisitions
Possible trends:
• Global business services
• Work from anywhere
• Talent management
4

• Current adoption
Finance
HR
IT
Procurement
Customer Care
Tax
Facilities
0% 20%
93%
52%
27%
41%
39%
35%
40% 60%
62%
80% 100%
Source: Deloitte
5

• Current trends – benefits of shared services
– Ability to scale up or down.
– Enhanced controls
– Allow business units to focus more on the business
6

• Future outlook – move to “Global Business Services”
– Manage multiple shared services functions (Finance, IT, HR, etc.) under one structure
– Manage all global aspects of each function across regions
Source: Accenture
7

• Finance – 2003 first adoption with Accounts
Payable
• IT – Help desk, project management, infrastructure
• HR
– Until now…benefits, compensation, University
– Now…Employee services, talent management
• Sourcing/procurement
• Legal
8

9

Finance Shared Services at MGM (cont.)
Accounts Payable
2003
Payroll
2006
Non-Gaming Acctg
2008
General Acctg
2009
Accounts Receivable
2011
Casino Acctg
2014
MGM Resorts Finance Shared Service Center
Enterprise Process Capabilities
Knowledge Centers of Expertise
IT Services & Architecture
Transaction Process Factory
10

Finance Shared Services at MGM (cont.)
350
FSSC
Administration
Client Services
Finance Projects
Finance Systems
Process Management
Finance Analytics
AP
AR
GA
NGAA
PY
AP
PY
GA
NGAA
AP
PY
175
Las Vegas
Strip
Properties
• Bellagio
• MGM Grand
• Mandalay Bay
• Mirage
• Luxor/Excalibur
• New York-New York
• Monte Carlo
• Circus Circus
• Aria 325
Regional
Properties
• MGM Grand Detroit
• Beau Rivage
• Gold Strike Tunica
CFO
Dir. of Finance
Casino Acct.
Fin. Planning
Corporate
Entities and Other
Chief Acct Off.
Corp. Acct.
Corp. Fin. Reptg.
Corp. Tax
Internal Audit
11

Finance Shared Services at MGM (cont.)
• Benefits – Savings and ROI
Department
Accounts Payable
Payroll
Current Non-Gaming Audit & Acct.
General Accounting
Client Services
Projects/other
Accounts Receivable
Future Casino Accounting
Year
Formed
2003
2006
2008
2009
2011
NA
Current
FTEs
46
45
50
46
25
35
2011 86
2013/2014 TBD
333
Initial
Investment
(MM)
$3.0
8.0
Annual
Savings
(MM) ROI %
$2.5 83%
2.5 31%
5.0
1.0
NA
NA
5.0
1.0
NA
NA
100%
100%
NA
NA
3.0 6.0 200%
TBD TBD TBD
$20.0 $17.0 85%
Budgeted
FTEs
41
42
45
44
25
35
80
312
12

Finance Shared Services at MGM (cont.)
• Benefits - Value Added Services
– Employee Banking – Process reengineering
– AV Revenue Metrics
– Workforce Scheduler
– Reservation Automation
– Analytics
13

Finance Shared Services at MGM (cont.)
• Risks (from management’s perspective)
– Talent management and retention
– Distance from source of transaction
– Leveraged model (with controls, costs, etc.)
– Reliance on systems
14