By Stan Lepeak, Global Research Director, KPMG LLP Advisory
KPMG recently released the results of its global 2Q12 Sourcing Advisory Pulse survey. These Pulse surveys provide insights into trends and projections in end-user organizations’ usage of global business services (GBS). The learnings are gleaned from KPMG firms’ advisors, who are working closely with end-user organizations that are actively exploring or undertaking GBS initiatives, as well as from leading global business and IT service providers. This quarter’s Pulse analyzed general GBS market activity and trends, looking into the top drivers and challenges affecting GBS improvement efforts and examining trends in organizations global sourcing efforts.
Results from this quarter’s study find that organizations are using their growing portfolio of GBS activities to drive value into the organization in an increasingly diverse range of ways. Reducing operating costs remains a paramount driver for GBS efforts, but there is a growing focus on using GBS to improve the effectiveness of the services being delivered, and create more tangible and measurable business value.
Figure 1 below illustrates that, while reducing operating costs is clearly a top driver for GBS efforts, organizations are not pursuing this goal unilaterally. Rather, reducing costs has become a base-level prerequisite for any process improvement effort, and organizations have many other complementary, and sometimes conflicting, goals. Among larger and more global organizations, for example, more tightly integrating global delivery and operating models has become a key priority.
Progressive organizations are realizing that by capturing and leveraging synergies across multiple functional areas and geographies, they can improve capabilities to do things such as enter new markets, integrate new acquisitions faster, adopt new processes more rapidly, and access and analyze a wide range of data that serves their customers, business partners, and employees better. While these are laudable goals, they are harder to achieve than cutting costs via labor arbitrage (a common and often sole driver of early GBS efforts). Herein lies the core challenge of moving up the GBS value chain.
To access findings from other recent KPMG market trend surveys, please view our whitepapers on the KPMG Shared Services and Outsourcing Institute.