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PwC and HfS Research Examine the Evolution of Global Business Services


August 2011 (SmartPros) New study finds a significant shift in outsourcing and shared services drivers is changing the dynamics of global business services strategies.



A new study released today from PwC US and HfS Research, "The Evolution of Global Business Services: Enhancing the Benefits of Shared Services and Outsourcing,"  finds that nine out of every ten respondents employ shared services and 97 percent manage outsourcing relationships. The study surveyed 347 senior business operations executives with responsibility for shared services and outsourcing strategy.
 
According to the report, as the economy recovers, 44 percent of organizations will seek to reduce their dependence on fragmented, in-house delivery capabilities for business operations and shift to shared services (59 percent) or outsourcing (73 percent) models.
 
“Organizations need to focus on aligning corporate strategy, improving investment portfolio decisions and reallocating current spending,” said Dr. Charles Aird, US and Global Leader of PwC’s Shared Services and Outsourcing Advisory Practice. “To do so, they are adopting global business service models.”
 
Phil Fersht, Founder, Chief Executive Officer of HfS Research, stated, “A well-executed global business services strategy is distinctly different from the narrower focuses of shared services and outsourcing, as it identifies corporate objectives and encourages internal functional silos to collaborate with each other and third party service providers to create breakthrough, operational capabilities that drive business outcomes.  The results can differentiate a company.”
 
“The Evolution of Global Business Services: Enhancing the Benefits of Shared Services and Outsourcing” emphasizes the following key drivers for global business services execution:
  • Corporate strategy drives global business strategies – Focus global business strategies on enterprise strategies. Keep a tight rein on change orders, ancillary decisions and stakeholder alignment.
  • Marketplace change and global business strategies must be adapted – Despite the best efforts to anticipate needs for scalability, extensibility and flexibility, global business strategies must constantly adapt to marketplace demands on an organization.
  • Innovation requires investment in developing ideas and implementing solutions — While most organizations are dissatisfied with the amount of innovation they receive from service providers, most organizations under-invest their resources and efforts to innovate.
  • Create a culture of open problem solving, root cause analysis and best practice sharing – Reward open, early disclosure of problems before they become significant.
  • Develop a comprehensive multi-process, multi-year plan –Well planned and executed global business services don’t happen overnight. Develop a two to three year plan to achieve objectives.
  • Governance requires professional, experienced staffing and careful attention to career development –The governance team drives execution of global business strategies. Acquiring a mix of strategic thinking, operational focus and relationship management skills is critical to success.
  • Get prescriptive with service provider management activities – Governance organizations must ensure business units are managing service providers consistently and reliably by deploying and monitoring common processes.
  • The right people and culture matter – Assigning the right people to lead global business services strategy development makes a significant difference. Change doesn’t end within the leadership team because employees must increasingly rely on their counterparts at different companies to devise new strategies, resolve problems, and work collaboratively.
“Global business services are not ‘one size fits all’ as no organization’s corporate strategy is the same,” added Dr. Aird. “The biggest challenge confronting functional leaders and service providers with limited experience in collaborating to drive corporate strategy instead of functional objectives is assessing their collective opportunities. Clearly, different corporate strategies will result in different global business services strategies.”
 
For a complete copy of “The Evolution of Global Business Services,” please visit http://www.pwc.com/en_US/us/outsourcing-shared-services-centers/assets/hfs-report-pwc-developing-framework-global-services.pdf.
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2011 SmartPros Ltd. All rights reserved.

Source: PwC

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