The inclusion of stakeholders in shared services and Global Business Services business models is at the core of success. Analytics provide the data for decision-making, but leadership needs change management skills to make strategic decisions that generate value while keeping employees adaptable to continuous change.
By Gerald Donald

Shared services is a business model that has been in use for more than 20 years, and now organizations are moving toward greater use of Global Business Services (GBS) as they naturally get more complex with a global footprint. Moving from shared services to GBS is not a step process. It is an evolutionary transformation that requires a supportive culture, engaged employees, a diverse supply chain and organizational adaptability.

Transforming implies continuous change, and that requires engaging leaders who make use of all the tools available today, including technology. Balancing technology, people, and organizational structures and practices in a way that improves efficiency and effectiveness to drive value is challenging, but a proactive and inclusive approach can optimize and maintain high performance levels.

An Evolution for Creating Value
In-house shared services originally developed as shared services centers with each center managing a single function, like Human Resources or finance. Over the last two decades, the shared services concept matured to meet organizational needs. Maturing shared services models begin with a focus on cost metrics through consolidation and improved efficiency but with little attention to the needs of different “customer” groups or business areas.

The next stage of shared services begins to see a more local or regional effort in which high service levels and chargeback processes are put in place. There is also more accountability for results, and new business functions like IT and procurement are added.

As the transformation continues, the model moves ever closer to GBS in which all internal services functions are aligned with corporate strategies and managed with a customer focus and a goal of driving value. A matured GBS model is a multifunctional shared services model that includes the functions mentioned, like finance and HR, but adds critical services and functions like sales and marketing, supply chain activities, and logistics.

Shared services is constantly evolving as it embraces new technologies, refined talent management strategies and best practices, continuous improvement, and best operational practices. It is a model that responds to changing market conditions, cultures, stakeholders, operational risks and regulatory compliance requirements.

A successful and mature GBS model has moved from transactional standardization of a single function to end-to-end process ownership and multi-function shared services and finally to integrated services. It is the last stage that creates organizational agility, produces innovation, and best meets the needs of customers.

Creating a Successful Model
During the transformation, there are two major challenges: 1) Utilizing technology that delivers the metrics needed for good decision-making; and 2) Creating a culture in which all stakeholders – from employees to vendors – embrace a culture of continuous improvement.

The transformation process never ends. Continuous improvement is not always welcomed because it requires a willingness of functional areas to cooperate and innovate, and be willing to do what is best for the organization in order to meet goals.

It takes a strong collaborative environment, consistent governance, and leadership skills that enable the development of capabilities and optimize services management and delivery on a continual basis.

The challenges of achieving GBS cannot be understated. Organizations in transformation make mistakes like depending on a few particular people, not establishing the appropriate governance structure, not breaking down silos, and not properly utilizing technology to its fullest extent. It takes strong leadership and process designs that are flexible, encourage innovation, and produce measurable value. The goal is to develop a strong brand that drives change and encourages employee support.

The GBS is not a “subservient” function. It is a core process that needs a leader with a seat at the executive table. In fact, the GBS should be run like a business with all the implications that goes with that perspective.

GBS leaders need to establish structures that cross functions and eliminate silo setups for the involved service functions. Cultivating talent able to support GBS and corporate goals is critical to maintaining agility.

Metrics need to identify and measure GBS success because many of the strategic goals are outside transactional goals. For example, measuring cost savings or speed of transaction processing are good measures, but of equal importance are increased business adoption rates and improved customer satisfaction. Data should also be forward looking and continually help leadership make decisions that assist with building capabilities, adaptability, and flexibility.

Developing an Enterprise-Wide Supply Chain THROUGH GBS
Functions more recently added to GBS include supply chain activities such as supply chain planning, sourcing and procurement. Creating an enterprise-wide supply chain enables sourcing and procurement to be streamlined as a unified operation across the enterprise, enabling them to better meet the difficult demands placed on these functions and to minimize risks because they become customer focused and are more integrated with other services. An advanced sourcing and procurement operations model considers things like materials delivery alternatives and improvement opportunities.

Improved operational performance is the goal, and organizations successfully migrating supply chain activities implement a number of best practices like developing centers of excellence for trade compliance, process standardization, and centralized governance. It is an ideal process for an organization's sourcing and procurement function to become more inclusive because diversity of suppliers is known to bring a diversity of perspectives and innovation – two key factors in the GBS model for value creation and cost reduction.

Re-evaluating the supply chain can improve service partnering and identify activities that should be moved to third-party providers. This improves supply chain processes and assists employees with improved performance in complex and high-risk areas like compliance.

Developing effective leadership that engages employees during a long-term transformation process is a core requirement. The business needs transparency, metrics that support decision-making, quality communication systems, and a willingness to commit required resources. Inclusion of stakeholders in the transformation process is key to internal acceptance of change.