Aramark

Aramark returned to public markets via IPO in December 2013 after several years of PE ownership under GS Capital Partners and other investors. During the PE period and subsequent public years, the company had grown through acquisitions in food services, facilities management, and uniform services. By FY2018, this acquisition-driven growth had left Aramark with significant back-office redundancy: three separate ERP systems (SAP for North America uniforms, Oracle for food services, and a legacy system for international operations), six regional payroll processing centers, multiple billing platforms, and overlapping HR administration across business segments. Back-office costs (finance, HR, IT, procurement administration) were estimated at approximately 4.5-5.0% of revenue — above peer benchmarks of 3.5-4.0%.

Aramark launched a multi-year shared services transformation under its "Accelerate to Growth" plan:

• Finance shared services center: Consolidated accounts payable, accounts receivable, general ledger, and financial reporting from 12 regional finance teams into two shared services hubs — a primary center in Dallas (North America) and a secondary center in Manila (international operations and after-hours processing). This affected approximately 800 finance roles, with approximately 350 eliminated and 200 relocated offshore.
• ERP consolidation: Migrated all North American operations to a single SAP S/4HANA instance over 24 months, retiring the Oracle and legacy systems. The migration standardized chart of accounts, reporting hierarchies, and financial processes across food, facilities, and uniform segments. Total project cost was approximately $120M.
• Payroll centralization: Consolidated six regional payroll centers into a single centralized function, processing payroll for ~260,000 employees through one ADP platform. Reduced payroll processing errors by approximately 60% and cut payroll administration cost by approximately $15M annually.
• HR administration automation: Deployed Workday for HR administration across all US operations, automating benefits enrollment, time tracking, and compliance reporting. Eliminated approximately 150 distributed HR coordinator positions.

• Annual cost savings: Achieved approximately $130M in run-rate annual savings from back-office consolidation by FY2022, representing approximately 0.8% of revenue.
• Back-office cost ratio: Back-office costs as a percentage of revenue declined from approximately 4.8% to approximately 3.9%, approaching peer benchmarks.
• Headcount reduction: Approximately 700 net back-office positions eliminated across finance (350), payroll (120), HR (150), and IT support (80). An additional 200 positions were relocated to the Manila shared services center.
• SG&A margin improvement: Total SG&A declined from approximately 8.2% of revenue in FY2018 to approximately 7.4% in FY2022, with shared services contributing approximately half of that improvement.
• ERP investment payback: The $120M ERP consolidation achieved payback in approximately 30 months through system licensing savings ($18M annually), reduced IT support costs ($12M annually), and process efficiency gains ($15M annually).
• Timeframe: FY2019-FY2022 (3-year program).

• PE ownership period established the cost-discipline culture and created the mandate for shared services transformation
• Scale: processing payroll, invoices, and financial reports for 260,000 employees across multiple segments created significant consolidation opportunity
• Manila shared services center provided 60-65% cost advantage for relocated roles vs. US-based equivalents
• Single ERP platform enabled process standardization that made shared services operationally feasible
• COVID-19 accelerated the closure of regional offices, reducing organizational resistance to centralization