The shift to Global Business Services – Part 1

image1

One of the key areas of change facing the finance function within businesses is in structure. Beyond an organisation’s shift to outsourcing or shared services is the steady rise in popularity of the Global Business Service (GBS) model. The GBS model is an even bigger challenge to the finance function in terms of effectively managing transformation because of one key fact – by its very nature it has the potential to change the career path of finance leaders and redefine processes in the finance function.

According to ACCA’s  report, Global business services: A game changer for the finance organisation: “With many finance activities no longer in the finance function under this new business construct, and instead placed in a global business services function,  finance professionals will need to adapt their ways of working to be better prepared for working and reporting cross functionally.”

Essentially GBS means managing finance processes alongside processes of other enabling functions, such as human resources and IT. The report, states that “GBS models have the ability to change fundamentally the way finance functions operate. They could change the basic principles of ownership and governance, further reduce cost and increase efficiency, and lead to new business insights.”

Global Business Service has the following characteristics:

  • Global multi-functional architecture: the scope of GBS encompasses the entirety of the enterprise’s business operations, whether it is delivered through internal shared services operations, or through outsourcing relationships. In effect, GBS becomes the corporate back office entity.
  • Shares across functions: leveraging locations, management and administration, customer interfaces and sourcing methodologies. The GBS scope reports to one corporate leader, with clear reporting lines across all functions within the scope.
  • A unified governance structure: the methods, protocols, measurement and oversight are managed across the enterprise rather than within each business function.
  • Primacy of process over functional silo: business functions are managed and governed together as end-to-end processes that cut across functions such as finance, procurement and human resources. In effect, processes become the basis for performance management and measurement of back office procedures. For instance, in an ideal GBS structure the accounts payable function is aligned with upstream procurement processes, with performance throughout managed and measured in its entirety.

From the abovementioned characteristics, the benefit of a GBS model is clear. With consistency of process across functions driven by the business strategy there is great potential for enhanced value and profitability.

Getting to the point of a fully functional Global Business Service is the ultimate challenge in transforming the finance function thus the decision to adopt the model should not be taken lightly. Due to the influence that the model has on both the finance leader as well as the processes of the finance function, George Connell of Shell says, “I think that the strategic question is this: is GBS good for business? And then if it’s good for business then how do we embrace that and embed it and make it work within finance?”

2 thoughts on “The shift to Global Business Services – Part 1

  1. I personally believe that tax should not be avoided because the money that is taxed helps the government to improve public goods that are offered in countries. Above all this blog helped me to know more information about GBS( Global Business Service) and its impact on government and business.

  2. After reading this blog, i got a clear view about GBS(Global Business Service). I strongly believe that GBS is a good method that is beigused and it will benefit and also help the business and companies in different ways

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s