Metric Definition

This month we examine the percent of companies that handle at least some of their finance processes in a shared services/Global Business Services organization (Fig. 1). More broadly, the metric illustrates the evolution underway as shared services are evolving into Global Business Services organizations.

Why It's Important

Recent discussions with senior executives from The Hackett Group's Global 1000 client base revealed what the current recession has already taught most finance leaders: Cost cuts must be sustainable, and they cannot negatively affect quality or service levels. Fortunately, shared services/Global Business Services are already delivering on their promise of sustained cost reductions -- 61% have saved their companies 20% or more on costs.

Beyond cost reductions, other reasons for having a shared services/Global Business Services organization are shown in Fig. 2. It is telling that, while both world-class and peer-group organizations share many goals, such as standardization of services, headcount reduction, improvements in service and reduction in administrative costs, the world-class group focuses more on sustainable goals such as reducing infrastructure costs, simplifying technology and enabling flexible growth.

Strategic Implications

Shared services that handle back-office processes have assumed a new level of importance for finance leaders, one that goes beyond sustainable cost improvements. At leading-edge finance organizations, shared services have undergone dramatic changes during the past three to five years. They have been retooled and rebranded to a more progressive concept, which Hackett calls Global Business Services. The name says a great deal about what has changed: Deployment is truly global, utilizing enterprise standards and expanded geographic scope while taking advantage of labor arbitrage; business in the context of taking on a broader range of activities, breaking through functional boundaries to become more integrated with the workings of the enterprise instead of being pushed to the margins of the organization; and service orientation in terms of culture and performance attitude that were not always present in the early shared services movement.

About The Hackett Group

The Hackett Group, a global strategic advisory firm, is a leader in best practice implementation, advisory, benchmarking, and transformation consulting services, including shared services, offshoring and outsourcing advice. Utilizing best practices and implementation insights from more than 4,000 benchmarking engagements, executives use Hackett's empirically based approach to quickly define and prioritize initiatives to enable world-class performance. Through its REL brand, Hackett offers working capital solutions focused on delivering significant cash flow improvements. Through its Hackett Technology Solutions group, Hackett offers business application consulting services that helps maximize returns on IT investments. Hackett has worked with 2,700 major corporations and government agencies, including 97% of the Dow Jones Industrials, 73% of the Fortune 100, 73% of the DAX 30 and 45% of the FTSE 100.

Founded in 1991, The Hackett Group was acquired by Answerthink, which was renamed The Hackett Group in 2008. The Hackett Group has global offices in the United States, Europe, Australia and India and is publicly traded on the NASDAQ as HCKT.

The Hackett Group

Email: info@thehackettgroup.com • +1 770 225 3600 • www.thehackettgroup.com