GBS: Governance Challenges

Hats off to governance professionals for their refreshing candour. Just 4% of them say that they are certain about the value that they bring to their business according to The Future of Governance,  recently published by KPMG’s Shared Services and Outsourcing Institute.

It’s not difficult to see why. First off, there’s the perennial challenge of explaining how governance adds value. As Julie Hutchins, formerly a leader of Nestlé Business Services (and now with KPMG), put it in a separate  case study:

“My biggest struggle was to explain what I did every day, and why it added value. How do you assess the value of not letting things fall apart?”

There’s the impact too on governance best practices of the ‘traditional’ disruptors – cloud, social, mobile, and analytics.

But, beyond these, there are other significant developments impacting governance. The onward march of global business services often mashes up shared services and outsourcing silos, requiring redefinitions of governance.  Risk management and compliance are also more embedded in business operations than ever before.  The demands for faster cycle times, increased agility, faster innovation and continuous improvement are also challenging how governance is conceived and delivered.

All of which surely re-confirms the strategic value of an enterprise platform for managing change; one that is owned and embraced by the business because it’s written in the everyday language of end-to-end process, and deployed within a governance wrapper that meets the needs of all the stakeholders.

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30 Oct 2013   GBS: The Limits Of Centralized Governance Teams

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Global Shared Services: Building The Brand

It’s interesting how rapidly the quality of the customer experience is racing up the strategic agenda for leaders of Shared Services Organizations (SSO) and Global Business Services (GBS) units.

Deloitte’s 2011 Global Survey noted the need for any SSO to promote itself effectively – to overcome resistance, and to secure buy-in, by getting closer to its customers.

On the webinar with HfS yesterday, Ron Walker of KPMG went further, stressing brand development as one of the keys to GBS success:

“How you manage the GBS brand is critical. Any GBS has to sell itself, and to show quick wins.”

The perfect backdrop for my plug for an SSON-hosted webinar next month. Building on experience with a range of clients, I want to show how Nimbus provides a platform for SSO and GBS organizations to deliver continuous excellence – including an outstanding customer experience.

There’s an interesting prelimary discussion, of course, about what we even mean by the ‘customer experience’ in this context.

Deloitte has suggested a useful  distinction between the SSO’s client – meaning the exec team buying the SSO’s services – and the SSO’s customer – meaning the day-to-day users of the SSO’s services.

Clearly ‘an outstanding customer experience’ has to deliver for both the SSO’s clients and its service user customers…

[just fyi – in the typical shared services and outsourcing journey for most organizations, GBS units may be the final stage beyond an SSO, but for all practical purposes, I take SSO and GBS to be interchangeable terms in this context].

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21 Aug 2012    How To Simplify Global Shared Services

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© Text Michael Gammage 2012

Death Of Outsourcing ‘Greatly Exaggerated’

KPMGOh dear. Things are looking a bit terminal for outsourcing.  The market-leading HfS blog, whose 80k subscribers are mostly sourcing professionals, sounded a death knell.  And now KMPG has published The Death of Outsourcing.

Mark Twain’s celebrated remark on his premature obituary comes to mind. You don’t have to look at IBM and Accenture for long to realise that this ‘corpse’ has rather a lot of vital signs.  Indeed, in many industries and activities – in clinicals trial and manufacturing in Life Sciences, for instance – outsourcing appears to be in the rudest of health.

So what’s happening? Why this apparent gloom?

If you ask me, it’s because things are changing fast. We’re in an accelerating transformation towards the the virtual enterprise of the future.

And this sea change is most obvious in how the non-core activities of the enterprise – like procurement, accounting, HR and IT – are delivered. In KPMG’s words:

“There is a revolution taking shape in the business services industry, one that disregards the traditional shared services and outsourcing paradigms..”

It’s not difficult to see why. The lion’s share of the benefits of labor arbitrage and automation have been harvested. A recent Deloitte report, for example, concluded that the organizations which have been leaders in shared services and outsourcing ‘are now struggling to capture the next generation of value… after picking the low-hanging fruit.’

So it may be the end of ‘outsourcing as we know it’. But we can see the new paradigm rapidly emerging in the rise of ‘global business services’ (GBS) organizations – and they have flexible sourcing at their core.  Again, in KPMG’s words [my italics]:

“Many of these new business services organizations share common traits. They are centrally managed, and usually have an integrated portfolio of capabilities – typically a combination of external service providers and internal shared services… [They] leverage a global pool of internal and outsourced resources to deliver a service that is nimble, aligned to the business, and connected with customers, employees and suppliers.”

So reports of the death of outsourcing seem ‘greatly exaggerated’.  In GBS and beyond, it’s set to continue to grow. But it’s going to be different – more complex, more dynamic, more multisourced – and will require new capabilities.

It’s difficult to see how any GBS organization can deliver effectively without a world class business process management platform at its heart. It’s the key to business alignment; to effective collaboration across organizational silos; to managing risk effectively; to delivering superior customer experience; and to sustainable improvement.

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