Research by professional services firm KPMG and global services specialist HfS Research concludes that six out of 10 organisations will embrace global business services (GBS) over standalone outsourcing and shared services by 2017. The reason for this is that GBS offers enormous potential for unlocking greater business value.
Key findings, published in a report entitled 'Global business services industry study', indicate that 62% of organisations will be investing significantly in GBS (hybrid, integrated outsourcing and shared services) delivery over the next three years, and that annual external GBS expenditure will surpass $40bn in 2013 and increase to $73bn by 2017.
The research, which involved collecting data from a range of professionals, from managers through to c-level executives, at 416 organisations with more than $1bn in revenue across global regions and industries, concluded that 64% of respondents believe c-suite investment in changing corporate culture, making difficult decisions and coaching leaders through change management are essential to success.
“However, due to its enterprise-wide, cross-functional nature, it also requires new ways of operating between GBS, corporate functions, business units, and their key external delivery partners," stated Cliff Justice, principal and US leader at KPMG shared services and outsourcing advisory.
Research also found that cost reduction, strategic operational analytics and automation dominate business outcomes for today's sourcing strategies, with four out of 10 organisations viewing these as critical to the success of their shared services and outsourcing programmes.
"We are seeing an escalated focus on both automation and analytics from mature organisations, but what is clear is that centralisation of governance and a GBS approach provides the building blocks to achieve more effective results," said Phil Fersht, CEO, HfS Research.
The study found that the greatest challenges to achieving GBS benefits are: inability to adequately leverage and exploit data analytics; business enablement of IT; attraction, retention, and talent management requirements in the GBS organisation; and enabling end-to-end process management across functions and geographies.