GBS: Getting Strategic About Global Sourcing Governance

When it comes to managing outsourcing and shared services, most organizations fail to establish mature and effective governance and service management processes. Our new groundbreaking research, in which we canvassed the views of 188 senior business executives from major global organizations, is a call to action for business leaders to radically improve their Global Business Services (GBS) strategies, with huge amounts of unclaimed value being left on the table.

While our research has shown that shared services and outsourcing programs are creating substantial value for more than 80 percent of companies, the teams responsible for executing these programs face critical governance pressures, namely, the complexity of managing a global environment, the need to generate value beyond labor arbitrage, and the imperative to drive cross-functional process innovation.

However, this is not a tale of woe. Some organizations are turning the tables in their favor, and we believe their success should be the signal for other organizations to establish Global Business Services. In this paper, we have identified eight common practices that leading governance organizations execute well. This is where you should begin:

• Improve your capability to architect transformation by improving skills and capacity to move beyond labor arbitrage and centralization.
• Improve the strategic focus and execution of governance processes by implementing performance management discipline.