Optimising financial processes

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Global Business Services – Extinction or Explosion?

No less than 3 pieces of research on Global Business Services hit my screen on return from a brief holiday/vacation.

It was lovely, thank you.

Two pieces celebrated the explosion of opportunities grasped by GBS leaders today, whilst one offered commiserations on the death of GBS as a “dinosaur-esque concept”.

A little “click-baity” perhaps, but it turns out that all 3 perspectives had more in common than their titles indicated.

With one major reservation, which I will come to later.

1) The 2023 Global Shared Services and Outsourcing Survey from Deloitte, the annual stalwart, reports on substantial GBS progress worldwide.

Apart from expanding the traditional functional scope, GBS are accelerating digital capabilities like automation, analytics, and reporting to become more customer-centric. These GBS organizations are also promoting the social responsibility & diversity agenda and supporting a range of ESG processes.

GBS organizations are taking the drivers’ seat in delivering transformational capabilities to the organization and are becoming more closely aligned to the C-suite. Overall, what’s clear is that shared services centers (SSCs) and GBS models are becoming more agile, digital, and cost efficient, as they seek to provide a better customer and employee experience.

Whilst GBS continues to focus on cost reduction as a priority (it is), they are also driving focus on business value through global standard processes, E2E process ownership, data analytics, automation and more.

Finance, HR, IT and Procurement are the most common functions performed by GBS with Tax and Customer Service closely following.

67% of GBS are exploiting data for decision support in FP&A and beyond, a key value creating strategy.

The 6 survey themes and benchmark numbers are summarized here  . . . 

There is a lot of great material and you can get the full Deloitte report here . . . 

2) Shared Services & Outsourcing Network (SSON) offers advice from GBS leaders in their Global Advisory Board. Transitioning a Shared Services Organization (SSO) into Global Business Services (GBS) has a number of challenges. They share some practices that can ease the path . . .

  • Understand the customer and focus on customer experience
  • Benchmark processes and practices
  • Managing relationships “up and across” with all key stakeholders
  • Getting to “YES” – GBS is all about no cost, no risk, no noise and so forth. Figure out a way to get to yes to change, yes to agility, yes to value, yes to new ways of working
  • Empowering the individuals across GBS – develop domain experts
  • Strive to be a true business partner – collaboration is key
  • Drive change, or be changed – keep disrupting
  • Unlock value through incremental revenue, margin and cash improvements
  • Enable decisions to create shareholder value – align to strategy

You can read the SSON article here . . . 

3) HFS Research takes a different tack, suggesting GBS could become extinct, which appeared to resonate with the excellent interview with Rich Dobbs, Vice President, Global Business Services at Kimberly-Clark here . . 

Despite the apocalyptic tone, the HFS research really focusses on the need for GBS to find new sources of value, which we would all agree with.

Phil Priest, SVP Global Shared Services at International Flavors & Fragrances (IFF) shared his “4 levers of Business Value” – Revenue Growth, Operating Margin, Asset Efficiency and Expectations in a great talk here . . 

The “winning mantra” for GBS is expressed by HFS as EX+PX=CX, where Customer Experience (CX) is the sum of Employee Experience (EX) and Partner/Ecosystem Experience (PX).

Now, that’s an equation worth thinking about!

You can read the HFS Research article here . . .

Finally, to my one major reservation.

The idea that Generative AI (GAI), a very impressive, but narrow, technology, is going to fundamentally reshape GBS or business in general is misplaced.

Whilst leaping on the buzz of GAI, most detailed references actually refer to other disciplines of AI, and even of software in general.

Whilst GAI is a powerful “conversational search” capability, Large Language Models (LLMs) do have some significant challenges.

I would encourage the application of GAI for appropriate use-cases, but not to fall into the “FOMO” trap that has sparked an investor “Gold Rush” that will crash as deeply as any fall from the “peak of inflated expectations” ( thank you Gartner!).

Which brings us back round to the original question.

Global Business Services – Extinction or Explosion?

The evidence appears to support the forecast that GBS will explode in value creation, cost optimization and customer impact, if we grasp the opportunity to harness the power of operating model, governance, customer experience, stakeholder collaboration, business partnering, end to end processes, people, behaviour and habits, data and, yes, technology.

The barriers to maximizing GBS impact are not solely, or even primarily, technological.

Thanks for reading!