Global Business Services: From Blunt Tool to Innovation Enabler

Stan Lepeak, Global Research Director, KPMG LLP Advisory

KPMG recently released the results of its global 2Q13 Sourcing Advisory Pulse surveys. 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.

KPMG is consistently seeing GBS continue to become the predominant model that progressive, and increasingly mainstream, organizations are employing to manage their collective shared services and outsourcing efforts. Figure 1 taken from KPMG and HfS Research’s State of the Outsourcing Industry 2013 market study illustrates this point. Over three-quarters of participants polled in this market study expect to moderately or significantly increase their use of the GBS operating model and framework going forward.

9208 Fig 1

A driver for increased GBS usage, and more importantly an enhanced benefit it can bring over traditional stand-alone shared services and outsourcing efforts, is the focus on how to use GBS to bring greater business value to the organization beyond just cost savings. This is reflected both in the goals and business case benefits sought in new efforts being undertaken as well as in how focus is changing in existing efforts in the field. Figure 2, based on research efforts conducted by HfS Research, illustrates an example of this and measures how corporate leadership’s objectives are shifting from cost reduction to more strategic elements such as accessing talent and skills and driving corporate and cultural change.

9208 Fig 2

GBS usage is evolving beyond a blunt tool to drive cost savings to an intricate, yet powerful, instrument to deliver strategic business value. Back-office services deployed into GBS operations are increasingly extending beyond just transactional activities, while customer-facing and more strategic activities are more often in scope. GBS efforts are becoming the vehicle through which organizations can enable greater consolidation and leveraging of common applications and business processes, models, and leading practices to deliver a broad range of services more efficiently and effectively on a global scale.

There are many challenges to organizations’ GBS adoption, expansion, and maturity-driving efforts, and many enablers. One often underemphasized enabler is the role of IT, both as a group and organizational unit as well as a collective set of tools, technologies, and systems. The 2Q13 Sourcing Advisory Pulse took a deeper dive into the role of IT in enabling GBS success, and we will examine that in a subsequent blog entry.

GBS is a key focus area in the quarterly Pulse surveys and in other KPMG market research efforts and in client engagements. KPMG will release new findings from its ongoing GBS maturity research efforts in the fall of 2013 and is also conducting a major global market study with HfS Research on broader GBS trending that it will release later this year.

Leave a Reply