Center Office Model | Deloitte US has been saved
Mission accomplished? For almost the past decade, we have rightfully professed the benefits of the global business services (GBS) model. With enhanced scale and efficiency as its focus, the GBS model’s use of common management; governance; and, where possible, enabling systems across multiple value streams was the next logical evolution from functional shared services. Indeed, we saw significant efficiency, business continuity, and cost benefits as organizations created multifunctional shared services across a global delivery platform under a single GBS leader. While it is hard to bifurcate the benefits, Deloitte estimates that GBS models are 15% more efficient than functional shared services (Figure 1).
A flawed mission. Focused on creating efficiency solely by adding scale, shared services organizations have struggled to substantiate sustained, recognized value for the organization. The reason is simple: 90% of shared services organizations were established upon a deteriorating value proposition and cost reduction. While value is easy to substantiate in the beginning, delivering significant cost reduction is increasingly difficult, and the lack of material cost takeout quickly marginalizes the importance of shared services in the corporate conversation. (Figure 2)
The new value paradigm: Serve, process, and transform. According to the 2019 Deloitte Shared Services & Outsourcing Survey, cost efficiency is no longer the primary value corporate consumes seek from shared services organizations. While cost reduction/scalability is still a fundamental prerequisite, the cumulative importance of customer service-related characteristics now outweighs cost. Moreover, more than half of stakeholders are now fully expecting material transformation of the processes performed by shared services.
These facts justify a new value paradigm that looks beyond scale. Shared services organizations that want to materially participate in the corporate conversation can no longer anchor on efficiency.
The center office. The next generation of shared services centers is expected to drive better customer service interactions, increase end-to-end collaboration and processing, and utilize new capabilities to transform the organization. To serve this demand requires the old GBS model to be subsumed as part of a more comprehensive model.
The center office model recognizes the importance of having a well-developed and contemplated corporate consumer disposition. This customer layer then interfaces with the traditional GBS structure. Finally, the shared services organization is equipped with transformative capabilities that it can use to fundamentally enhance processes and that can be offered to the rest of the company.
Rise to meet the need. Shared services organizations are at a crossroads. While decades of brand debt from being typecast as a cost-efficiency play still weigh heavily, the loud clamor of corporate constituents suggests the time is now to evolve the model. (Figure 3)
Author
Kort Syverson
Principal | Global Business Services
Kort Syverson leads Deloitte’s Global Services Transformation practice. He has 20 years of domestic and international consulting experience advising leading global companies in all phases of operating model optimization from strategy to execution. His experience spans a diverse group of industries, countries and functions. He is known for developing global multi-functional shared services strategies and his ability to perform the subsequent design / optimization and implementation. He has advised his clients through large and complex transformational efforts inclusive of all regions of the globe for both captive and outsourced models. He has developed multi-functional strategies encompassing Finance, Human Resources, Information Technology, Procurement and Customer Operations. He has managed large implementations that included facility build out, transition of workforce, process redesign, change management, communications, org design, recruiting and hiring, training and stabilization. Notably, he leads one of the industry’s most well-respected seminars, Deloitte’s Shared Services and Outsourcing Executive Forum.
