Executive Briefings

Hackett Sees Companies Accelerating Evolution to Global Business Services

Many companies are now moving beyond shared services to manage their back-office operations, and a new Global Business Services model is quickly beginning to emerge, according to new research from The Hackett Group.

Hackett says that Global 1000 companies are dramatically transforming their service delivery model for finance, IT, procurement, HR, and other general and administrative (G&A) functions. This transformation has been accelerated by the current economic environment, Hackett finds, and companies need to examine this trend now or risk being left behind.

Over the past 15 years, shared services organizations have grown in popularity, to the point where they are now the standard approach for how large companies manage G&A functions. But today, many companies are taking the next step, evolving from stand-alone shared service centers for individual functions to integrated Global Business Services operations which take a multi-function approach. A recent study done by Hackett and the Shared Services & Outsourcing Network, found that nearly 45 percent of all companies surveyed had incorporated three or more functions in their shared services operations, with some incorporating as many as five functions.

Companies have learned that once they break the physical connection between processes and the business units, they have much greater latitude to drive changes such as process improvements, standardization, and moving functions to low-cost labor markets. As companies evolve towards a Global Shared Services model, they can extend this concept further, moving away from silos by function and creating a single organization with shared reporting. 

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Many companies are now moving beyond shared services to manage their back-office operations, and a new Global Business Services model is quickly beginning to emerge, according to new research from The Hackett Group.

Hackett says that Global 1000 companies are dramatically transforming their service delivery model for finance, IT, procurement, HR, and other general and administrative (G&A) functions. This transformation has been accelerated by the current economic environment, Hackett finds, and companies need to examine this trend now or risk being left behind.

Over the past 15 years, shared services organizations have grown in popularity, to the point where they are now the standard approach for how large companies manage G&A functions. But today, many companies are taking the next step, evolving from stand-alone shared service centers for individual functions to integrated Global Business Services operations which take a multi-function approach. A recent study done by Hackett and the Shared Services & Outsourcing Network, found that nearly 45 percent of all companies surveyed had incorporated three or more functions in their shared services operations, with some incorporating as many as five functions.

Companies have learned that once they break the physical connection between processes and the business units, they have much greater latitude to drive changes such as process improvements, standardization, and moving functions to low-cost labor markets. As companies evolve towards a Global Shared Services model, they can extend this concept further, moving away from silos by function and creating a single organization with shared reporting. 

Read Full Article