Archives For global business services

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

By Arvind Shankar, managing director, Accenture Business Services, and Julie Spillane, EMEA director and Ireland director, Accenture Business Services

When evolving to a global business services (GBS) model, a key challenge is how to quickly grow, at scale, in an offshore environment with the depth of capability and tacit knowledge typically held in the onshore environment, which has been developed over many years.

Immediately, from a sourcing talent perspective, the question becomes how you seed the operation with the right mix of capabilities, and whether you buy some of that talent in externally, borrow it from the onshore environment or build the skills locally. This is particularly important when you recognise the breadth of management and business capabilities you need in a GBS environment typically extends beyond traditional functional boundaries. The approach to sourcing and developing talent and the ‘build, buy, borrow’ question will not be addressed fully by looking at talent recruitment and development solely through a Global Business Services or solely through a functional finance lens. An integrated approach is needed that views talent through both lenses.

As GBS itself is cross-functional in nature, GBS organisations often find it easier to cultivate an ‘integrated’ approach internally; for example, providing opportunities for employees through programmes such as rotational assignments in and out of different areas to grow individual capabilities and skills. The demarcation between technical, business and functional knowledge also starts to disappear in GBS where roles are created in areas such as programme management, service management and quality management. In short, there are more opportunities for employees to grow and enhance their skills given GBS multi-function structure.

As the GBS organisation continues to grow its reputation and its mandate increases, it is more able to push the talent agenda. There are, of course, challenges in the GBS environment; while in some senses the talent base and pool in more cost-effective locations may be much broader, the turnover is also higher. Robust succession plans, training programmes, and knowledge transfer processes become critical in these environments.

In contrast, traditional functional finance organisations often find talent management challenging, and that’s a reflection of historic practices and functional structures. It is also a reflection of the impact transformation has had particularly on the retained finance function, the re-articulation of its role, its capacity in the future in terms of career opportunities and the engagement levels of staff. Those in the retained organisation that have embraced the shift towards global business services are better placed to capitalise on the opportunities. This is particularly true if they have experience on both sides of the ‘fence’. This puts them in a strong position from their own career point of view. From an organisational perspective we have to be very mindful of these challenges and differences in the two organisational models when developing an integrated approach to talent.

Solutions – creating a global integrated approach to talent development

  1. The development of integrated approaches to talent is essential. In a global, matrixed business such as Accenture, it is essential to adopt an integrated approach to talent which provides both a GBS view and a finance function view of middle-senior management talent. This gives business leaders much greater clarity to where their talent sits, how it cuts across geographies, functions or role levels, and how it may be deployed across the entirety of finance and GBS roles to best meet the needs of the entity as a whole. It’s a much more holistic view which helps drive an effective succession planning process as well as identifying capability gaps. It also helps GBS become more integrated in developing the broader finance leadership.
  2. Create ‘finance’ roles as part of the finance leadership team that bridge GBS and the retained finance function. A number of senior level roles within the Accenture organisation have evolved which have both GBS and finance functional responsibilities. This helps drive synergies between these different entities and gives a view from both sides of the fence so that challenges and opportunities that may arise as part of the broader transformation journey can be anticipated. It also brings informed insights to cross fertilise talent between GBS and the finance function.
  3. Deliver learning interventions that drive a more global outlook and help strengthen GBS – retained finance relationships. To ensure parity of understanding and knowledge of our finance teams within GBS compared to the retained/in-country finance teams, we have supported colleagues through the ACCA qualification in our centres. This has significantly raised capabilities across GBS and brought strong reputational benefits. It helps develop a global perspective across GBS as well as providing individuals with greater career opportunities. In addition, we have invested in building coaching skills and have also introduced a career counselling programme which is independent of line management. For the senior management team in GBS, their career counsellors are actually based in the functional organisation, which helps strengthen relationships.

This case study appeared in an ACCA report on Talent and capability in global finance functions. As part of ACCA’s qualitative research leading organisations shared their approaches.

By Katie O’Neill, director of HR, EMC Corporation

EMC moved to a global business services (GBS) model over four years ago, incorporating transactional finance processes such as accounts payable, revenue accounting, credit and collection, licensing and general accounting on a global basis. This step was part of an evolutionary process to increase scalability and efficiency; at implementation of the GBS model, the finance organisations’ shared services operations were aligned regionally and by business units, reporting to a host of management structures, which resulted in redundant operations.

The governing principal for our approach to talent management is simple – to convince our employees that GBS is a good place to grow a career by staying close to the business and continuously evolving our programmes as both the team and business needs change. As our organisation is global, and both insourced (operations in North and South America, China, Ireland and Costa Rica) and outsourced (operations in Dalian, Manila and Bangalore), that is a significant challenge. EMC’s GBS is fully aware of its talent ‘pain points’ and implements programmes accordingly. The organisation has found that the largest category of talent at risk is comprised of subject matter experts. In a GBS context, subject matter experts often do not have the management skills necessary to advance their careers, and find that the path to progression is not obvious. Similarly, GBS has identified first line managerial and supervisory talent bench strength also as an issue. Though significant progress is being made, we recognise effective finance talent management remains a work in progress

Solutions – know where you are at, build from within and create visibility in career options

  1. Measuring the effectiveness of talent management approaches. There are several proof points that EMC monitors to ascertain whether talent management approaches are effective. For example, we use annual attrition percentages as a top-level indicator. Over the last few years, gross attrition across GBS has averaged 10%, with voluntary attrition maintained at 8%.
  2. Building from within. The organisation believes that building, as opposed to buying strategic skills and capabilities, is a plus for existing staff, but also ensures that projects and programmes have a better success rate. Take, as an example, the company’s recent implementation of SAP across its finance processes. We determined that a deep understanding of the way in which the companies’ culture and processes operate was more important than specialist SAP skills, so there was a concerted effort to upskill staff that understood current business rules rather than bringing in new team members or contracting for a large number of consultants.
  3. An emphasis on individual responsibility. Individuals are empowered to take responsibility for their own career progression. Programmes such as GBS ‘Rising Star’ list are designed with the sole purpose of surfacing good talent and making them free agents within the organisation. GBS also has a rotation programme, designed on the same principles as EMC’s college hire rotational programme.
  4. Recognise that more can be done. With stability in its employment base, GBS is now looking at better linkage into the business. End-to-end career paths have been designed for, and implemented, linking GBS finance roles to that of the business, but the organisation is just now stepping back to determine how to path careers back from the business through GBS. As yet, there is no rotation programme moving business talent through GBS as a recommended career progression but it is something we are looking at.

This case study appeared in an ACCA report on Talent and capability in global finance functions. As part of ACCA’s qualitative research leading organisations shared their approaches. 

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By Deborah Kops, founder and managing principal of Sourcing Change

Over the past few weeks, it seems as if everyone in the accountancy world is talking about GBS, GBS, GBS. Shared services organisations encompassing one function in a few countries with a centre or two purport to be running global business services.

Companies with transactional accounting processes operating around the world declare that they are GBS leaders. Sourcing leaders managing an outsourcing deal or two are trying to link governance together under the guise of GBS. Procurement heads are dangling the notion of GBS in front of their bosses as a strategy to move up the proverbial value chain. Newcomers to shared services and outsourcing are even christening their first forays into consolidated business models as GBS. The chatter has become so pervasive, it’s starting to sound like cicadas mating in the summer.

If you take a cynical view of GBS, it’s almost as if changing the name of the processes and systems that serve the business, and putting as much of them as possible under one organisation will magically create new prestige and impact. With a new moniker, and more scope, will CXOs will suddenly be clamouring for GBS leaders—whose calling card is adept cost containment, reasonable customer service, some level of stakeholder management, and a track record of process excellence to join them, putting their two cents into every strategic decision.

But does organising under the banner GBS elevate the importance of business operations execution, making it more strategic? Will knitting services together really earn a seat at the corporate high table? Or is the value that business services ultimately delivers to the enterprise remain reliable, out of sight/out of mind operations? And, by the way, that’s no mean feat. As process operations become more sophisticated and industrialised, it not only increases cost-effectiveness, but boosts agility.

Any good corporate leader or manager aspires to create value for his or her organisation. There’s no doubt that the roles we variously group within shared services, sourcing or outsourcing leadership have as their mission to deliver consistent and predictable business processes that underpin operations to a range of corporate stakeholders by manipulating the levers consolidation, standardisation, process improvement, sourcing and technology enablement. But isn’t creating a reliable operating platform that delivers the ultimate means to an end – providing better service to the organisation so that they can get on with the business of being strategic good enough? What’s unimportant about taking over the management of the tasks critical to corporate operations to the next level, increasing efficiency and effectiveness, by performing them on a silent running basis?
There’s a difference between execution value and strategic value. I suspect that corporate leadership will look to GBS in any of its iterations as operations, not strategic direction; in fact, troll the internet for mention of GBS and the entries supports that observation: “GBS optimises the mix of resources, process acumen, and technology to deliver… services on an enterprise-wide basis to support business strategy” according to HfS Research. That’s still pretty important stuff.

It comes down to one word: service. The root of both service and servant is the same. Servants don’t dine with their families, and I’d posit that those who provide service don’t have a seat at the top table.