Liz Fisher, journalist

The concept of shared services is less than 30 years old, but in that time it has taken over the business world.

Starting out in transactional finance, today businesses have moved a huge range of processes and functions into shared services, introducing more sophisticated finance processes such as financial planning and analysis, as well as HR, procurement, real estate, customer care, sales and marketing. This evolution has created a new name: global business services (GBS).

During the pandemic, GBS provided a resilient core that allowed businesses around the world to keep operating

Pandemic test

Financial shared services (FSS), and now GBS, have changed the way that businesses operate and have transformed the career paths and working lives of many finance professionals – either as GBS leaders or team members, or as stakeholders of GBS operations. But what is the future of GBS? A new report from the ACCA aims to provide the answers.

Financial shared services to GBS models: a journey worth taking? argues that the value of the FSS/GBS model more than proved its worth during the pandemic. Adapting rapidly to virtual working, GBS provided a resilient core that allowed businesses around the world to keep operating, while also providing the data that allowed leaders to make quick, robust decisions in a volatile environment.

By surveying more than 800 FSS and GBS professionals globally, the report assesses whether GBS has improved on the FSS model, and whether it creates true value for the enterprise.

Work in progress

The survey shows that around half of organisations have some form of FSS model, while 48% have moved beyond finance and operate a true GBS.

The report’s main conclusion is that FSS/GBS operations are still very much a work in progress and are not yet delivering the value to meet their potential. The survey reveals that both FSS and GBS are still dominated by transactional activity.

‘In the pursuit of scale,’ asks the report, 'has the enterprise’s focus been overwhelmingly on transactional processes as opposed to true business partnering, eschewing value creation in favour of greater scope?’

When asked if their FSS/GBS was an innovation hub for the organisation, using advanced analytics to drive enterprise insight, only 58% of respondents agreed (and 23% couldn’t say one way or the other). There was, however, a difference in responses between FSS and GBS practitioners; 51% of FSS practitioners, compared with 64% of GBS, agreed.

The survey also reveals concerns that the FSS/GBS model is not yet delivering the gold standard of consistent and end-to-end processes that it promised. Less than a third of respondents said that their own FSS/GBS had reached this nirvana – and 46% said that this was preventing them from making improvements in the processes they deliver.

While recognising that moving to end-to-end ownership involves major disruption to finance (and other functions), the report adds that there are other challenges: ‘Although the FSS/GBS model has been in place for some years, the issues of trust, power and control still present a barrier. All business change is deeply personal; arguments such as “we’ve always done it this way” remain powerful deterrents to change.’

Tricky talent issues

Talent management in FSS and GBS has proved to be a tricky topic for many organisations, with urban legend claiming attrition rates of more than 30% a year in some companies. The report, however, reveals a different story. More than half of respondents say that FSS/GBS careers are an attractive proposition, and 70% believe it allows professionals to pick up future-ready skills.

Respondents also agree that moving from FSS/GBS into the business is a realistic prospect (although those working in GBS were slightly more likely to agree). Overall, concludes the report, it seems that FSS/GBS employees ‘are getting the recognition they deserve’.

There is a ‘remarkable lack of evolution of GBS models compared with FSS’

In terms of capabilities, respondents rated technical domain expertise as the most important for FSS or GBS roles at mid-career level, followed by ethics and stakeholder engagement. But it still seems that talent attraction is difficult, with 52% of FSS respondents and 58% of GBS respondents agreeing that they were experiencing challenges.

The main barriers include a lack of transparent career paths – although what the report calls ‘the spectre of being relegated to back office’ also seems top of mind.

Many respondents believe that the unique capabilities that FSS/GBS staff develop are not yet properly understood or valued elsewhere in the organisation – 38% ranked this as the top barrier to moving from FSS/GBS into the retained finance function.

The report concludes that while the FSS/GBS model is legitimate, there is ‘some road to travel’ and it is concerning that there is a ‘remarkable lack of evolution of GBS models compared with FSS’. The way that FSS moved up the value chain and beyond back-office processing should provide ‘an opening for evolution to GBS models’, it says, and makes a number of recommendations for improvement, including:

  • Understand the interconnected nature of people, process and technology; there is no silver bullet.
  • Get the basics right; process improvement should be a core deliverable.
  • Persevere with capability identification and development; take the time to evaluate the capabilities that will make FSS/GBS operations resilient and redesign roles accordingly.
  • Focus on career pathing and employee engagement as a crucial component of retention.
  • Use events such as a merger or enterprise-wide transformation programme as a catalyst for change.

More information

Find out about ACCA’s certificate in Global Business Services