GBS Rides New Technology and New Leadership to a Fast-Growing RoleGBS Rides New Technology and New Leadership to a Fast-Growing Role
For shared services organizations, it’s all coming together. (SPONSORED)
September 21, 2023
Sponsored by Deloitte Consulting
Shared service delivery models aren’t a new idea, but they’re evolving in ways that may surprise people in the C-suite -- and at a faster pace as well. While these models still focus primarily on the “big three” functions of finance, HR, and IT, and while cost-efficiency remains a foundational driver, leaders are finding that back-office services aren’t the only things they can centralize. Digital technology, data, and customer value are part of the mix as well.
And more and more often, the leaders in question are CFOs. This reflects a “promotion” for global business services (GBS) from a role tied to functional areas, or an internal specialty with a dedicated GBS head, to a C-suite focus with top executive sponsorship. Fully one-quarter of companies in Deloitte’s biennial Global Shared Services and Outsourcing Survey said a CXO leader has responsibility for shared services and outsourcing -- most commonly, a CFO.
CFOs Lead, and Shared Services Matures
Among GBS organizations that do report up to a CFO, four out of five have matured to include a multi-functional scope. That aligns with our survey’s finding that from 2021 to 2023, there’s been a shift in what organizations expect from shared services, and an evolution in the way that mission is carried out. What were once purely internal benefits are becoming customer-centric, helping generate value from outside the organization in addition to preserving value within the four walls. At the same time, their enhanced ability to see across the enterprise gives them a growing role in driving sustainability and diversity outcomes. Those shifts are transforming GBS from a business function to a business partner.
Building On What Works
The familiar basics remain in place: As more organizations expand their global footprints and business entity structures, it certainly makes sense for many of them to pool back-office functions as a way to curb redundancy and cost. What’s different? More of these GBS organizations are adopting tools like automation, single-instance ERP, and workflow tools. In effect, they’re applying the principle of centralization not only to the business services they provide, but also to the capabilities that power those services, and the customer benefits they make possible. They’re centralizing analytics, processes, and self-service capabilities. Increasingly, GBSs are taking end-to-end ownership of their process models. The sum of these changes is a more muscular, capable shared services function that is breaking out of its traditional role.
One of the most significant changes our survey found in the last two years has been in the use of centralized analytics reporting and performance dashboards among GBSs. In 2021, they were near the bottom of the 10 most frequent key enablers GBS organizations used. In 2023 they’re fourth, with 28% of organizations reporting their use. The top three enablers are automation, single-instance ERP, and case management or workflow tools. When you think about it, shouldn’t ERP in particular have been centralized all along? That’s its purpose. Today, technology helps make that approach more realistic.
Back-Office Changes, Front-Office Benefits
These functional changes tie directly to outcomes people can see and feel. When a company pivots to a hybrid or work-from-home stance, it’s a digitally empowered GBS that makes it possible. When customers enjoy (and reward) a more responsive, better-informed commercial offering, a GBS is there in the background. When a company has a clearer view of its workforce diversity and career recruiting pathways, or its energy use and emissions profile, that’s the mark of richer data and quicker, more accessible analytics -- the kind of clarity that never reaches a leader’s desktop if a GBS doesn’t get it there. The same transparency also enhances external and regulatory reporting.
The Role of Technology
Self-service and automation are popular aims for many businesses, both internally and externally. But they don’t happen by themselves. GBS organizations are making more use of technology to bring those benefits online: Among those with a professed focus on automation, 29% already have centralized analytics reporting, insights, and performance dashboards operating today as functional enablers. This is one example of the way shared services is evolving not just to keep up with enterprise’s demands for internal housekeeping, but in ways that contribute to leading the enterprise forward.
Top of Mind: The Bottom Line
This isn’t the first time finance or CFOs have heard a change in business practices makes them greater strategic partners or “gives them a seat at the big table.” What’s happening now is that the CFO’s prominent role aligns with something else that’s on the rise: the vision of what shared services can be and what it can achieve. One finding in particular should be music to CFO’s ears: savings. In 2021, only 27% of companies told us automation had helped them drive savings of 10% to 20%. In 2023, 43% had results that robust. Nearly one in five companies (18%) has saved 20% to 40% through automation, and that group corresponds strongly to users of single-instance ERP.
Taking cost and redundancy out of operations will always be foundational to GBS. But as these organizations continue to mature under the guidance of CFOs, look for them to deliver more transformational capabilities, more agility, and more tangible results that offer value to customers as well as colleagues. This is an evolution that appears far from complete.
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