By Rob Starr, Big4.com Content Manager
A single global business services (GBS) organization is the end goal of most global business services looking to centralize their shared services and outsourcing operations within the next three years, according to the 3rd Quarter 2014 KPMG Sourcing Advisory Global Pulse Survey. However, this new focus doesn’t always have a corresponding plan with one executive at the helm, and that template could see many organizations falling short of realizing full GBS potential. Big4.com recently spoke with Cliff Justice, Partner and U.S. Leader, Shared Services and Outsourcing Advisory at KPMG LLP, about the research, its implications and how things are shaping up.
He started at the beginning with a little background on the need for this GBS, which is new and relatively rare.
“It’s really about efficiency, cost reduction, simplicity and taking services that have traditionally been a transaction processing cost center and developing more of an asset in a
platform where high value services can be leveraged and delivered to the enterprise,” he said recently from Houston. The resulting economies of scale allow some high value services like analytics to be delivered on a more cost effective basis. Justice went on to say IT is the flux that allows these services to be consolidated naming a few specific examples.
“The advancement in cloud computing and availability of Big Data as well as analytics solutions all make this much more accessible to more businesses.”
For the GBS system to be the most efficient, the survey suggests buy-in and alignment from other functional leaders is critical and that one executive head up the effort. Justice says while there is a dedicated GBS executive in place in many instances already, there’s an existing C-level officer that’s responsible for the role in others.
“In some cases, it’s the CIO,” he says adding in other instances the CFO takes up the reigns. “Sometimes you’ll see a dotted line from the function to the GBS and other times it’ll be a direct line.”
Because there’s a broad spectrum of maturity when it comes to GBS, KPMG has categorized organizations with numerical levels where four and five are the most sophisticated. Justice says those in the highest echelons are rare and comprise about 25 to 30% of organizations. These high performers tend to have more of an identity around GBS and more of an alignment to a particular executive. Still, even in those companies, the lines can be blurred and the GBS executive can also serve other functions like CIO.
“There’s not always just a head of GBS,” he says, “and a lot of it has to do with the business model.”