Stan Lepeak, Director, KPMG Global Sourcing Advisory Research

Assessing the maturity and performance levels of an organization’s business services capabilities has never been a simple or easy task. This task has become more complicated as organizations diversify their service delivery models, increasingly relying on shared services and outsourcing to complement, extend, or replace traditional models. The globalization of services delivery, or the evolution of an extended global enterprise (EGE) business model, adds further complexity—as will increased reliance on cloud based services.

Organizations need to understand the maturity of their service delivery capabilities so they can measure progress in improving them over time and understand how far and fast to push these improvement efforts. In addition to measuring the own internal performance and improvement levels, they ideally need to also compare themselves to their peers.

This is the essence of classic benchmarking. Cost-focused benchmarking; however, is too narrow a means to measure service delivery performance and often too exact a process to work in the real world. Understanding cost levels internally and against peers is important but only one element in assessing service delivery performance levels. What organizations need is something that takes a much broader and structured approach to measuring the performance of global service delivery processes, systems, and operating and governance models. Figure 1 below illustrates one model for measuring global business services or EGE maturity.

This model defines five levels of maturity ranging from sub-optimized up through differentiated. The assessment and measurement of service delivery maturity should occur across a range of operating categories such as commercial orientation, delivery models employed, global process ownership, governance and organizational models, and degree of standardization. The following are characteristics of a mature EGE delivery model.

• Integrated services portfolio operating on a standard platform
• The use of services portfolio management supported by a strong business intelligence capability and measured on business value
• Emphasis on end-to-end processes across functions in scope
• The services organization is focused on moving services up the value chain to support evolving business needs
• Seamless integration of internal and external outsourcing and cloud service providers via centers of excellence
• Common services architecture across functions and businesses

It is important to balance the pursuit of greater maturity against the cost and complexity of doing so. The pursuit of maturity for its own sake without a strong business case is ill-advised and unlikely to get executive support in the current market environment. Similarly, the desired maturity level must map to the organization’s overall operating model. A distributed conglomerate might value high maturity in a single business unit, for example, but find less or little value is higher levels of maturity across multiple, disparate business units. In this respect, a model such as this can add value both as means to assess current performance levels as well as define a future roadmap and destination for improvement efforts.

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Filed under: Benchmarking, Global Business Services, How to... by EquaTerra