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The benefits of an enterprise wide coordinated Shared Services & Outsourcing (SS&O) approach

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The benefits of an enterprise wide coordinated Shared Services & Outsourcing (SS&O) approach | business-magazine.mu

In the previous article, we highlighted the difficulties stemming from a piecemeal approach to SS&O initiatives. We now delve further by analysing the comparative merits of:

• Shared Services;

• Outsourcing;

• Global Business Services (or Enterprise-wide Business Services),which refers to the integrated approach to SS&O.

Since organizations need to quickly propel their business processes forward (and, in some cases, outsource the previous sacred cows), they must evaluate how they can leverage a comprehensive global business services framework to obtain value beyond labour arbitrage, whilst also bringing consistent approaches to global services strategy formation, transition, and governance.

A Global Business Services (GBS) framework is not the same as shared services or outsourcing. While the framework calls for evaluation of SS&O solutions, the difference lies in an entire organisation collectively leveraging global business services to propel attainment of corporate strategies. As mentioned previously, many SS&O strategies remain poorly integrated into corporate strategies. A GBS strategy unites functional strategies into a collective plan to achieve enterprise-wide objectives.

PwC clarifies in the following table why GBS strategies are more compelling than standalone SS&O strategies. (See table).

Many enterprises have successfully implemented global business services strategies. A large global FMCG company is particularly well known for developing a shared services organisation that has propelled the enterprise’s strategies. It leveraged its third-party service providers, including providers from Mauritius, to reduce operating costs by up to 50 percent, drive global compliance and leverage innovative, best in class solutions for all global business units.

In the process, the shared services function went from being an organization that employees dreaded due to continued cost cutting efforts, to an organisation in which the company’s best employees want to work. All this as a result of the organization delivering significant value towards its corporate objectives and its employees wanting to be part of that change.

Watch this space as we next analyse the impact of a well executed Global Business Strategy.

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