Global Business Services: Opportunity or Threat for CFOs?

accapr —  10 December 2013 — Leave a comment

Jamie Lyon

By Jamie Lyon, head of corporate sector, ACCA

There’s a new kid on the block for business service delivery and it could be a threat or a major opportunity for finance chiefs. We’re all pretty familiar now with the advent of finance shared services and outsourcing, but Global Business Services goes one step further, leveraging sourcing methodologies, organisation structures and operating locations to create a cross-functional business support operation across HR, IT, Finance, Procurement, delivered under one governance framework. In theory it should mean greater business efficiencies, better visibility on end-to-end processes across the organisation, better insight into organisational data, and greater organisation flexibility and scale. There are, however, few examples where all support functions are wrapped around this new delivery framework – it’s an aspiration rather than a reality for most right now, with some but not all of the “GBS” boxes ticked, and it could be that GBS is more of a marketing term to signify a major business transformation, when it reality what we’re talking about is still finance transformation for many….

So what’s the implication for CFOs of GBS aspirations?  There’s plenty of evidence that those organisations which have GBS aspirations are typically putting CFOs in charge. With functional silos broken down, and processes managed end to end, the real prize for the finance organisation is that they should have access to a scale and scope of corporate data being brought together that they have previously unknown. This enhanced data visibility across the organisation, combined with new technologies and business partnering capabilities could help finance chiefs deliver the sorts of insights that truly make a difference to the strategic direction of the organisation, or which impact directly on bottom line performance.

But do many CFOs care about GBS or indeed want ownership? Are some likely to see it as a major political headache, riddled with enormous organisational complexity and logistical challenges. Could GBS be seen as a significant diversion from all their other responsibilities? CFO’s don’t have to “own” GBS to get the potential benefits, and it can be someone else’s problem. Maybe it should not sit within the CFO domain at all, perhaps the CIO or indeed the COO is better placed to ensure it has an appropriate seat at the corporate table.

One final note – if GBS aspirations are realised, moving finance operations and finance “service delivery” into a cross-functional structure and reporting model is likely to impact on the skills needed; it will almost certainly impact the career paths that finance professionals have access to.  These are some of the issues we have been raising in ACCA’s latest report. Co-authored with Deborah Kops of Sourcing Change: Global Business Services – a game changer for finance? we explore some of the questions which aren’t necessarily being asked. GBS has enormous potential for many businesses, but there remain a lot of unanswered questions.

This blogpost was first featured on CFO World website, November 2013

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