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Moving From Shared Services to Global Business Services

The concept of corporate Shared Services (SS) has been around a long time, with the private sector credited with starting this concept in the late 1980′s, and the public sector about a decade later. Personally, and not trying to date myself, I came across this business model at a former employer around 2005. Simply put, SS is an operating model that enables function-specific resources (i.e., HR, IT, Finance, etc.) to be leveraged across an entire organization, resulting in lower costs with agreed-upon customer-service levels. It’s utilization by both the private and public sector grew consistently over time, and then came the 2008/2009 recession. At that time, companies desired even greater efficiency, wider geographic reach, and broader scope coverage from its SS, to handle greater regulatory scrutiny for the same or even lower costs! These demands caused a bit of an inflection point, and the next stage in SS maturity started taking hold… Global Business Services (GBS). So, what is GBS?

and governance are not agreed to upfront, the transformation may move forward and even continue for some time, but will be at risk of falling short of achieving objectives or even be an outright failure.

Impressive adoption… but has the value been fully achieved yet?

Nonetheless, as a business model GBS is here to stay. The Hackett Group has been reporting for more than 10 years the percentage of SS that have moved to a GBS model. Since 2014, GBS organizations have outnumbered single-function SS organizations by a factor of three. In addition, in Deloitte’s 2015 Global Shared Services survey, approximately 60% of the 1,000 SS reporting were multi-function in nature, containing two or more functions. Even though the GBS adoption has continued to grow, not all the implementations have delivered the expected business value and outcomes. As a matter of fact, few companies (less than 10-15%) have reached the “holy grail” of GBS performance yet, except for companies like P&G and Unilever, who have been at it for well over a decade. So, as your company transitions from SS to GBS, are you delivering the expected value and outcomes to your business clients, and if not, where is your company on that journey?