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GBS Overview & Trends Across the Shared Services & Outsourcing Industry

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  • 1. Where are we now & where are we going? GBS overview & trends across the shared services & outsourcing industry 2012 Shared Services & Outsourcing Week 2012 14 May 2012, Amsterdam Tom Bangemann Senior Vice President Business Transformation The Hackett Group© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 1
  • 2. Statement of Confidentiality and Usage RestrictionsThis document contains trade secrets and other information that is company sensitive, proprietary, and confidential, thedisclosure of which would provide a competitive advantage to others. As a result, the reproduction, copying, orredistribution of this document or the contents contained herein, in whole or in part, for any purpose is strictly prohibitedwithout the prior written consent of The Hackett Group.Copyright © 2012 The Hackett Group, Inc. All rights reserved. World-Class Defined and Enabled.
  • 3. Priorities for 2012 look outward and inward for opportunities togrow top-line revenue and bottom-line profits© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 3
  • 4. Many GBS have moved beyond a single-function sharedservices model towards developing advanced capabilities In good company? Maturity Stage Value-centric 3 Strategic Business Enablement 6% Stage Process- 2 Operational Excellence 37% centric Stage Function- 1 Complexity Reduction 57% centric Shared Services Global Business Services© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 4
  • 5. Not only do most GBS now have a multi-function model,World-class GBS have twice as many functions in scope 2X The number of functions in World-class GBS’ scope compared to Peers© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 5
  • 6. World-class GBS have moved more than half of their functionalprocesses in IT and half of those in Finance and HR into GBS Service Placement – G&A Functions 34% Procurement 51% Human Resources (HR) 52% Finance Information Technology (IT) Outside GBS Inside GBS© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 6
  • 7. The cost of Finance is trending downwards again Finance spending as a percent of revenue, 1994-2012© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 7
  • 8. The agility and lower cost levels achieved allow World-Class tore-invest in Planning & Strategy Percent change in finance process cost by area, 2011-12© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 8
  • 9. GBS keep pushing the boundaries to include more value-adding finance processes and knowledge centric-activities Service Placement – Finance processes 5 years ago today In 5 years© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 9
  • 10. Process split example: Best practice based budgeting process© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 10
  • 11. Process split example: Best practice based standard reporting© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 11
  • 12. Finance-led Talent Management Large gaps exist in general business skills required by Finance 100% Balance of importance and effectiveness 90% 80%  Highlighted skills show 70% the largest imbalanceEffectiveness 60% between importance Data analysis and and effectiveness 50% modeling Rlshp mgt. Problem solving – Change management 40% skills – Business acumen Vendor/outsourcing Project/Program Business acumen – Relationship 30% management management Change management Strategic thinking mgt./process 20% and analysis improvement – Problem solving skills 10% 0% 0% 20% 40% 60% 80% 100% Importance Source: 2011 Finance Talent Mgmt Study © 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 12
  • 13. All World-class GBS have global process owners reportingto Executive level sponsors Global process owner’s reporting relationship Global process Global process owner owner Reporting to GBS leader 43% 50% CEO 0% 25% COO 3% 25% CXO 3% 0% Business leader 11% 0% 2/5 Not implemented 30% 0% of Peer companies have either not Other non-exec role 11% 0% implemented global process ownership or not established Peer World-class sponsorship at senior executive level© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 13
  • 14. All World-class GBS have implemented process ownership,only half of own end-to-end process improvement as well Decision rights – end-to-end process improvement GBS leader owner Process mgr. relationship Business manager Service Not assigned Decision responsibility End-to-end process improvement (within GBS) 1/2 Of World-class GBS have made global End-to-end process process owners improvement responsible for GBS (company wide) and company-wide end-to-end process improvement Peer World-class© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 14
  • 15. Mature GBS with end-to-end focus provide a multitude ofefficiency improvement opportunities (in addition to process cost) Cross-functional savings in end-to-end processes for a typical $10 billion company Working capital improvements Spend reduction improvements© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 15
  • 16. GBS Growth in Europe has been represented by aconsistent migration Eastward WAVE 1 WAVE 2 WAVE 3 WAVE 4 WAVE 5 Central Eastern Baltics & Eastern British Isles 1980s Benelux Early 1990s Iberia 1995 Europe 2000 Europe 2005 Estonia Ireland Latvia Netherlands Lithuania United Kingdom Poland Belgium Slovakia Czech Republic Romania Hungary Portugal Bulgaria Spain© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 16
  • 17. Over 4.200 shared service centres operate globally 39; 1% 360; 57; 2% 11% 1123; 26% 392; 13% 1603; 51% 3147; 696; 22% 74% Top 5 Global Destinations with BPOs Top 5 Global Destinations with SSCs© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 17
  • 18. Attrition remains one of the biggest challenges ofoffshore GBS centers Attrition rates by region North America Western Europe Eastern Europe 0-5% 5-10% 11-15% Asia Middle- & South America 16-20% 11-15% 0-5% 6-10% 11-15% 16-20% >20%© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 18
  • 19. Jobs have been under pressure for quite some time – withproductivity and offshoring taking a heavy toll© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 19
  • 20. Recently established GBS are more prone toselectively outsource activities than older GBS Likelihood to choose optimization strategies as GBS matures Technology leverage (automation) Continuous improvement Outsourcing© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 20
  • 21. Companies with world-class GBS have high levels ofenterprise-wide process standardization Level of process standardization – G&A Functions Peer World-class World-GBS have almost 2X the level of enterprise-wide process standardization compared to Peers Enterprise-wide Business Unit Within geographies No or limited standardization© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 21
  • 22. Automation remains the single largest optimization potential Example: Accounts payable capabilities and outcomes© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 22
  • 23. Next to Focus on Data Management and Workflow, all TopTechnology Investments in HR are into Self-Service Which technology solutions have you Which solutions do you plan to invest in the implemented in your GBS? most over the next three years? » Self-service solutions are high on the list for initial investment in HR Shared Services as well as planned for as preferred future investment in technology© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 23
  • 24. Both World-class and Peers have invested in analyticssoftware and workflow management, will cloud be next? G&A enabling technologies Implemented Investment planned 9% Self-service analytics for reporting 0% 4% Workflow management 7% Cloud 22% technology 27% (% of respondents indicating high or medium use of this type of technology) Peer World-class© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 24
  • 25. Contact Information Tom Bangemann Senior Vice President Business Transformation +49 174 3469 974| Telephone tbangemann@thehackettgroup.com I Email Amsterdam | Atlanta | Frankfurt | Hyderabad | London Miami | New York | Paris | Philadelphia | San Francisco | Sydney© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 25
  • 26. Corporate Headquarters London1001 Brickell Bay Drive Martin House30th Floor 5 Martin LaneMiami, Florida 33131 London EC4R 0DPTEL: +1 305 375 8005 TEL: +44 20 7398 9100Amsterdam New YorkCamerastraat 25 110 Wall Street1322 BB Almere Amsterdam 17th FloorTEL: + 31 36 535 00 82 New York, NY 10005 TEL: +1 646 354 4400Atlanta1000 Abernathy Road NW ParisSuite 1400 8, rue de Port MahonAtlanta, GA 30328 75002 ParisTEL: +1 770 225 3600 TEL: +33 1 53 43 0400Chicago Philadelphia525 W. Monroe Street 225 Washington StreetSuite 1550 Conshohocken, PA 19428Chicago, IL 60661 TEL: +1 610 234 5500TEL: +1 312 325 2900 San FranciscoFrankfurt 100 Montgomery StreetTorhaus Westhafen Suite 2225Speicherstrasse 59 San Francisco, CA 9410460327 Frankfurt am Main TEL: +1 415 249 3500TEL: +49 69 900 217 0 SydneyHyderabad Suite 4038-2-120/112/88&89 35 Lime Street1st Floor, Aparna Crest Sydney, NSW2000Road #2, Banjara Hills AustraliaHyderabad 500034 TEL: 1300 457 779 (within Australia)TEL: +91 40 66544000 TEL: +61 2 9299 8830
  • 27. www.thehackettgroup.com Statement of Confidentiality and Usage Restrictions This document contains trade secrets and other information that is company sensitive, proprietary, and confidential, the disclosure of which would provide a competitive advantage to others. As a result, the reproduction, copying, or redistribution of this document or the contents contained herein, in whole or in part, for any purpose is strictly prohibited without the prior written consent of The Hackett Group.© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. GBS Executive Advisory Program | 27