Time-to-Value and Pareto

There is an understable discussion around “value creation” in business, and nowhere more than amongst Global Business Services leaders.

There are many changes in focus, reporting and governance for GBS organizations in these turbulent economic times, with some even being “repatriated” to their markets and regions for reasons of “accountability”.

It is reasonable to assume that this focus on “value” may be coming in response to the question from the C-Suite “What is GBS delivering for the company this year, or even this quarter?”.

Not just keeping the lights frictionless business on, but driving systemic improvement in enterprise performance.

It can be a difficult conversation.

When asked in the latest SSON Research & Analytics survey, GBS leaders responded to the question “What has earned you the greatest kudos from your customers?”.

The top 3 responses were;

1. 57% said “Creating Value”
2. 21% said “Cutting Cost”
3. 19% said “Improving Customer Satisfaction”

But when asked “How do you define “Value” in your GBS?”, the responses were a little more ambiguous;

1. Cost Optimization – 83%
2. Customer Satisfaction – 72%

Lower down the pecking order were;

• Working Capital Improvement came in 8^th at 22%
• Margin Improvement came in at 10^th at 21%
• 11^th and 12^th (out of 13) were Revenue Improvement and Growth.

Surely these last four represent the very essence of enterprise value?

Despite the rhetoric, there is a perverse comfort in long term strategies. They carry big numbers and can reduce the apparent need for urgency in execution.  

The SSON report entitled “How the new mandate for Global Business Services (GBS), Shared Services, and Outsourcing is moving the focus beyond efficiency” is worth studying.

It tells a story that perhaps we are not as confident on the value expectations on us, and our ability to deliver on them, as we may wish.

• Yes, we have a good track record in creating internal GBS efficiencies through labour arbitrage.
  • But we have to net off, or at least consider, the transition costs which may result in lengthening the payback period to 3-4 years.
• We may set targets for 5-7% annual operating efficiencies.
  • But these don’t hit the P&L unless and until the actual costs reduce and staff leave the company. And we have to net off, or at least consider, the investment required to achieve these efficiencies.  
• We have transformation programs with business cases that fund large technology change initiatives over 3-5 years, maybe longer.
• We may get a bonus “lift” from a GBS scope increase, allowing us to redeploy staff from the initiatives above and create more economies of scale.

All this is good, but it can appear to be “in the margins” economically for the enterprise as a whole, when times are unpredictable.

We need a much clearer focus on Enterprise P&L and Working Capital impact. And set targets for it.

More urgently still, we need to recognise that Elapsed Time Decays the Value Delivered . . . (a bit like radioactivity, and possibly equally dangerous to the career!).

Time to Value is Critical.

We need a portfolio of strategies that blend the achievement of internal GBS operating efficiencies, that understandably take time, with “Pareto Projects” to deliver enterprise P&L and Working Capital impact in the current year, preferably in 100 day cycles.

This also requires us to raise our “XQ” and that of our organizations, where this “Execution Quotient” is about combining Thinking with Doing, Strategy with Urgency, Ambition with Targets, Opportunity with Accountability.

If we don’t rise to this challenge, the tectonic plates of business and economic progress will crush our aspirations.

It is do-able and some GBS leaders are deliverable notable, and celebrated, impact to enterprise performance and EBIT in short cycle times.  

You can read the “State of the Shared Services and Outsourcing Industry 2026 Global Market Report” from SSON Research & Analytics here . . . 

Time-to-Value and Pareto

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