Driving performance with global business services
Shared services and outsourcing:
the next step
Many organizations have begun to implement a multifunctional approach to shared services. This relates to handling non-core company activities, which are support in character, that do not add value for external clients.
Tomorrow’s global business services model is multifunctional, fully integrated, end-to-end process oriented and can transform your business.
Typically, this is achieved through the creation of a unified global business services unit capable of managing end-to-end processes.
The models vary enormously – by:
- Degree of integration
- Geographic location
- Single versus multiple centers
- Captive provider versus outsourcing (or a hybrid)
- Governance arrangements
But all share the same core drivers. Cost savings remains a key objective, but now the target is also to achieve benefits such as:
- Process efficiencies
- Additional value
- Career opportunities for employees
- Talent sharing
- The integration of mergers and acquisitions (M&A)
- Better use of time for the retained business
What high performers are doing differently
Throughout the recession, we surveyed C-suite executives and senior management in large organizations to examine business practices. This Growing Beyond research identifies what high performers are doing differently.
The research shows four factors underpin global competitive success, and the move to a multifunctional approach to shared services supports each of these drivers:
1. Customer reach
High performers are more outward looking and focused on the market and growth. Multifunctional shared services supports that focus directly, through added-value applications like analytics, and indirectly by freeing time for strategic matters.
2. Operational agility
High performers respond smartly to change but, more importantly, respond speedily. Multifunctional shared service units are key to optimization and delivering that agility.
3. Cost competitiveness
High performers understand what drives cost and value, and how to optimize them. Multifunctional shared services staff are now focused on both.
4. Stakeholder confidence
High performers protect performance by engaging more with stakeholders and unleashing their talent. The integration of functions such as HR into multifunctional shared services can accelerate engagement.
In today’s increasingly competitive marketplace, there are key strategic reasons to advance to the next shared services and outsourcing phase, including:
Use a crisis to drive change
If markets are falling, clients want to pay lower prices. This puts more pressure on margins.
We must increase efficiency, focus on adding value and get transaction processing into a well-organized, globally consistent, shared services center.
Make flexibility your friend
Continuing economic volatility means businesses must abide growing and contracting faster than before, organically and through divestments, mergers and acquisitions. Multifunctional shared services provides much-needed flexibility to be able to scale up and down.
“New technology, such as the cloud and wireless data, is a pretty strong incentive for doing shared services and to think about transforming the organization of a company,” notes Bertrand Quélin, Professor of Strategy at HEC Paris.
“IT is really driving this consolidation,” adds Uwe Mueller, EMEIA Advisory Leader for the IT Function at EY. “Cloud computing has facets that link into the finance area, but also IT, the supply chain business and almost all functions.”