From Fragmentation to Transformation: The Power of GBS in Higher Education Finance

Shared Services and Global Business Services (GBS) represent two approaches to delivering business support functions within an organization. Shared Services typically involve consolidating specific functions, such as finance or human resources, into a single unit to achieve cost savings and standardization.

In contrast, GBS is a more integrated model that unifies multiple functional services across various regions and business units, aiming to enhance efficiency, service quality, and governance on a global scale. This evolution from Shared Services to GBS reflects a strategic shift toward delivering cohesive, enterprise-wide solutions that leverage standardized processes and advanced technologies to drive improvements and efficiencies. In the context of Higher Education in the UK, whilst there have been strides towards increasing Shared Services, it is ultimately a move to GBS within (or across) universities that will reap the rewards of a tomorrow. 

Revolutionizing the university finance functions through GBS

The financial landscape of higher education is undergoing a seismic shift. Universities face unprecedented financial pressures including diminished public funding, rising operational costs, and intensifying scrutiny on financial accountability. A significant underlying issue compounding these challenges is the fragmentation of financial systems, often founded on an operational structure that sees faculties and departments handle their own financial processes independently. This “decentralization”, while historically rooted in the autonomy of academia, has created a network of financial silos, misaligned systems, and inconsistent practices across institutions. Consequently, many universities encounter inefficiencies, unreliable data, elevated costs, and compliance risks.

GBS offers a pathway to addressing these complexities by centralizing and standardizing financial functions. As a paper by Deloitte highlights, effective Shared Service Centres (SSCs) harmonize processes across business units, enabling a cohesive and efficient operational model. GBS takes this even further by not only overcoming operational fragmentation but also enhancing agility in an increasingly competitive educational sector.

Introduction to GBS

Global Business Services is more than a consolidation or centralization effort; it is a transformative operational model. Traditionally GBS has been adopted across corporate sectors to unify various support functions, including finance, human resources, IT, and procurement, into a single integrated service. In a university setting, GBS centralizes financial functions typically scattered across departments/faculties and managed independently, including essential tasks such as R2R, O2C, and P2P. 

Implementing GBS involves restructuring financial workflows, incorporating best practices in continuous improvement, and aligning with industry standards for operational control and service delivery. The goal is to create a model where financial services, whether student tuition processing or grant allocations, operate seamlessly and consistently across the institution, resulting not only in cost savings and efficiency but also in a greater ability to meet strategic goals by aligning financial services with institutional priorities.

Defining the Scope: Addressing Fragmented Financial Ecosystems

In this paper we’ll explore the implementation of GBS in higher education, focusing on its potential to overcome fragmented financial systems as well as the potential challenges it faces. Specifically, this paper addresses how GBS can streamline financial operations, achieve consistent and accurate financial data output, reduce compliance risks, and enhance forecasting, budgeting, and resource allocation.

In a traditional university structure, finance operations are frequently decentralized. Various facilities, departments, schools, or units will manage their own budgets and financial workflows. This fragmented approach often leads to multiple operational issues such as:

• Data silos are created by fragmentation which restricts comprehensive financial analysis and reporting. This in turn limits the university’s ability to gain a unified view of its financial health, complicating financial forecasting and planning.
• Operational inefficiencies and errors due to variations in financial procedures across faculties or departments, where best practices are not replicated in other areas. Redundant steps and misaligned practices lead to longer processing times, duplicated efforts, and higher operational costs.
• Different departments may interpret financial policies differently, leading to inconsistent compliance standards and increasing the risk of non-compliance with regulations or funding conditions. This variability can lead to unintended policy breaches or audit findings that could jeopardize funding and the institution’s reputation.
• With finance operations managed independently, universities face governance and oversight challenges, and difficulty in enforcing consistent governance practices. Fragmentation also reduces the visibility of financial transactions and obscures potential risks or fraud within the institution.

Why is this important?

Operational excellence in financial services requires a balanced focus across planning, control, and continuous improvement. With GBS, universities can achieve this balance by establishing a streamlined, efficient, and scalable finance infrastructure that meets the demands of today’s complex educational environment.

Furthermore, GBS supports a culture of continuous improvement, allowing universities to adapt quickly to new financial challenges, enhance service delivery, and foster innovation. A standardized GBS framework integrates Lean and Six Sigma methodologies, enabling universities to eliminate inefficiencies, improve quality, and drive value across financial functions. This proactive approach empowers finance leaders to focus on strategic goals and align financial services with the university’s mission and vision.

Finally, by addressing fragmentation and creating a robust GBS infrastructure, universities can better leverage technology and automation. Advanced data analytics, real-time dashboards, and robotic process automation facilitate faster decision-making, enhance service quality, and ensure that financial operations are aligned with strategic priorities.

Embracing GBS is not merely a cost-saving measure; it is a comprehensive strategy to support sustainable growth, institutional accountability, and competitive advantage in the dynamic landscape of higher education.

The Role of GBS in Higher Education: Addressing Fragmentation in Financial Systems 

Why GBS in University Finance?

GBS has proven itself as a transformative model across industries by unifying various support functions such as finance, HR, and IT into a cohesive operational unit. Within higher education, the role of GBS in finance becomes even more critical given the complexities and varied revenue sources unique to universities such as student tuition and government grants, endowments, and commercial revenue. Often, each of these revenue streams is managed by different departments, creating an inherently fragmented ecosystem that results in operational inefficiencies, lack of visibility, and compliance risks.

By standardizing through GBS, universities can streamline processes like budgeting, financial reporting, and accounts payable/receivable. This centralization is more than just merging departments under one roof; it involves the establishment of unified policies, creating consistent automated workflows, and integrated technology platforms that allow for data consistency. As Deloitte's Shared Services Handbook explains, a GBS model helps institutions "hit the road" by aligning operational processes with technology to optimize performance and mitigate common barriers to efficiency.

For example, in a GBS framework, accounts payable operations for all departments are managed centrally, meaning invoices are processed according to the same rules and timelines. This eliminates the need for individual departments to establish and manage their own accounts payable procedures, thus reducing errors, streamlining payment cycles, and achieving faster transaction times.

Additionally, fragmented systems and data silos make it difficult for universities to obtain a holistic view of their financial health and create inconsistencies that impact decision-making. 

GBS-driven data centralization enhances data quality by enforcing uniform data standards and reducing the likelihood of duplicate or conflicting records. Enhanced data quality also positions universities to leverage advanced analytics, predictive modeling, and financial forecasting tools, all of which are critical for strategic financial planning.

Detail of how the solution could work

Standardization

Implementing GBS begins with the standardization of financial processes across departments. Standardization serves as the backbone of GBS, creating consistency in how financial tasks are carried out institution-wide. To achieve this, GBS leaders need to map out current processes, identify redundancies, and create a unified approach that integrates all departmental workflows into a single framework. 

This task cannot be done in isolation; it requires a starting point of mapping the current or ‘as is’ before cocreating the ‘to be’ with the key stakeholders involved in the process. 

Tools like Service Level Agreements (SLAs), Key Performance Indicators (KPIs), and process flowcharts are essential for defining clear, standardized processes within a GBS framework and getting buy-in throughout the university. 

SLAs outline the expectations for service delivery, ensuring that all financial functions meet the institution’s standards of accuracy and efficiency. KPIs help monitor compliance with these standards, measuring performance across different departments and identifying areas for improvement. 

A framework for governance is also crucial, as it allows GBS to enforce policy adherence across the institution, reducing variability and maintaining process integrity.

Order-to-Cash (O2C) as an example of GBS integration

O2C processes offers a clear example of how GBS can streamline financial operations in a university setting. O2C, which encompasses all steps from invoice generation to payment collection (which can also be C2C; credit to cash), is often fragmented in universities due to the diverse sources of revenue such as tuition fees, grants, and external partnerships. In a decentralized system, each department may handle its own invoicing, creating delays and inconsistencies in payment collection.

By focusing on O2C through a GBS model, universities can consolidate billing, collections, and cash applications into a single, standardized process. This includes the range of compliance that naturally aligns with O2C, such as the Payment Card Industry Data Security Standard (PCI DSS) and anti-money laundering regulations. This integration reduces redundancies and risk, accelerates cash flow, and allows institutions to implement automation tools like Robotic Process Automation (RPA) to handle repetitive tasks, such as payment reminders and account reconciliations. This approach not only improves efficiency but also enhances the student experience by providing a seamless and consistent billing process, as highlighted in the ACCA’s GBS transition model, which advocates for GBS as an evolution of traditional finance shared services. 

Strengthening governance and compliance

One of the most significant advantages of a GBS model is its ability to enforce consistent governance and compliance standards across the institution. Decentralized finance systems often struggle with compliance due to inconsistent application of financial policies.  With GBS, however, all financial functions operate under the same governance framework, which reduces compliance risks and enhances accountability.

Deloitte’s SCC handbook underscores the importance of strong governance in shared service models, emphasizing that standardized processes and oversight mechanisms are key to maintaining compliance and mitigating financial risk. In a GBS model, governance frameworks can include standardized record-keeping practices, regular audits, and clear escalation paths for compliance-related issues. 

Real-Life Applications: Case Studies and Examples

The UK HE sector has much to learn from the US.  

University of California

The University of California provides a notable example of shared services implementation in higher education finance, seen through its UC IT innovation (UCITi) location-led, system-supported approach to shared services. Recognizing the inefficiencies in its decentralized financial operations, UC introduced a shared services model to centralize administrative functions across its campuses. This model consolidated finance, human resources, and IT services into centralized hubs, enabling UC to reduce costs and streamline operations across its ten-campus system.

The initiative resulted in significant cost savings and service improvements. By centralizing finance functions, UC was able to standardize data management practices, improve compliance, and enhance data transparency across campuses. Moreover, this model provided UC with the agility to respond to financial challenges and adapt to budget constraints while maintaining a high level of service quality. As documented by Educause, UC’s shared services initiative serves as an example of how universities can leverage GBS to drive efficiency and improve financial control in a complex, multi-campus environment.

University of Saskatchewan

The University of Saskatchewan transformed its administrative services with a network-based shared services model, using small on-campus service points and a centralized processing hub. This new structure increased service accessibility, streamlined operations, and minimized redundancy.

Key benefits included enhanced satisfaction for faculty, staff, and students, greater efficiency, and more space for academic needs. The model allowed services to scale with future growth while ensuring easy access to support through both in-person and digital channels, significantly improving the university's overall service delivery.

Applied Knowledge and Best Practices for Addressing Fragmentation in University Finance

Transforming university finance through GBS can be a game-changer. 

A great starting point is the GBS Maturity Model, which acts as a roadmap for universities embarking on financial transformation. This model categorizes institutions by their level of GBS integration, guiding them from initial, fragmented stages to advanced stages where GBS operates as a fully strategic partner. In the early stages, financial functions are often scattered and decentralized, making it hard to achieve consistency and efficiency. As universities move through the model, they consolidate financial functions, standardize processes, and integrate technology. These changes create immediate benefits, like reducing redundant tasks and improving service delivery whilst setting the stage for broader and more strategic improvements.

The GBS Maturity Model also emphasizes a phased approach, allowing universities to build from one stage to the next at a manageable pace. As they progress through the model, GBS becomes increasingly key to a university’s decision-making capabilities such as providing real-time insights or playing a central role in student and staff satisfaction. Ultimately, a mature GBS model allows finance to function as a true partner to the university’s mission, aligning resources with institutional goals.

A core component of achieving operational excellence in GBS is a focus on continuous improvement which can be effectively driven by methodologies such as Lean and Six Sigma. Lean principles, for instance, are particularly useful in streamlining workflows by cutting out non-value-added activities for example simplifying complex approval processes, eliminating unnecessary manual steps in transaction processing, or optimizing how resources are allocated across departments. This focus on eliminating inefficiencies not only improves productivity but also boosts staff morale, as team members spend less time on tedious, repetitive tasks.

Six Sigma, which focuses on reducing process variability and enhancing quality, is also invaluable in high-volume transactional processes such as billing, accounts payable, and accounts receivable. For example, Six Sigma tools like DMAIC (Define, Measure, Analyse, Improve, Control) can help universities identify and correct the root causes of common errors in financial data entry or transaction processing. 

Technology is another essential part of effective GBS implementation. For a GBS model to truly transform university finance, it must integrate advanced financial management systems, automation tools, and data analytics platforms. For example, a system that can integrate student accounts, payroll, and grants management, eliminating data duplication and ensuring consistency across financial records can not only improve reporting accuracy but also enhance transparency, critical for both regulatory compliance and internal accountability.

Robotic Process Automation (RPA) is another powerful tool that universities can use to automate repetitive, time-consuming tasks, such as data entry, invoice processing, and reconciliations. By automating these routine functions, GBS teams can free up staff to focus on higher-value activities, such as strategic financial planning. Moreover, RPA reduces the risk of human error and speeds up transaction processing, leading to faster financial close cycles and improved service to stakeholders. Data analytics and predictive modeling further amplify the strategic potential of GBS. Through real-time analysis of financial performance, these tools provide insights into trends, cash flow, and budget variances.

However, the shift to a GBS model involves more than just systems and processes; it also requires thoughtful change management and stakeholder engagement. Moving to any form of standardized or centralized financial model represents a significant organizational change, and its success depends on securing buy-in from all levels of the university. 

Effective change management begins with a clear communication plan. Regular updates, town hall meetings, and informational workshops are essential for keeping stakeholders informed about the purpose, benefits, and timeline of the GBS rollout. Transparent, open communication fosters trust and minimises resistance, ensuring that everyone from faculty to administrators understands the value GBS can bring to the university.

Training and development are equally critical. Comprehensive training programs ensure employees are equipped to work within the new model, both in terms of technical skills on new systems and soft skills to adapt to better workflows. A well-trained team not only supports the success of GBS but also fosters a culture of continuous learning and adaptability.

Finally, establishing feedback mechanisms during the GBS implementation process is crucial for adapting to real-world challenges and meeting the needs of university stakeholders. Providing channels for feedback, such as surveys and suggestion boxes, empowers GBS leaders to adjust the model based on actual user experiences, demonstrating a commitment to continuous improvement and stakeholder satisfaction, making it easier to secure ongoing support for the initiative.

Call to action: Implementing GBS in University Finance

The following steps outline a roadmap for universities embarking on a GBS journey, addressing key stages from assessment to continuous improvement.

• Step 1: Map, map, and map some more

The first, and perhaps most crucial step in reimagining university finance through a GBS model is mapping out every process involved. Think of it as creating a master guide to all financial functions, identifying where things are flowing smoothly and, importantly, where they aren’t. There are two useful tools for this: SIPOC diagrams (standing for Suppliers, Inputs, Process, Outputs, Customers) diagrams and cross-functional process maps. 

Firstly, the SIPOC, a useful tool I picked up as part of Lean Six Sigma and GBS training, provides a bird’s-eye view of procedures or processes. It shows us not only the key steps but also the suppliers and, critically, the end customers (i.e., the people who will ultimately judge whether the process works). 

Cross-functional maps, on the other hand, help us to dig deeper, tracking every step, role, and handoff. By using both methods, universities can spot activity spanning roles or areas, and more importantly, the unnecessary handoffs and inefficiencies right from the start. This is the ultimate starting point for a journey which includes clearing a path for a more streamlined process.

• Step 2: Chart a path that includes both structure and standards

With a clear view of the current landscape, the next move is to create a structured plan that aligns GBS with the university's larger mission. This strategic framework acts as a guide and a foundation that sets clear goals, governance, and standards to anchor GBS operations firmly within institutional priorities. 

Firstly setting and then tracking against key metrics such as KPIs and SLAs are fundamental to this process.

Equally crucial is the standardization of financial processes across faculties or departments to bring consistency and speed to each step, from budgeting to revenue collection, to minimize errors and increase efficiency. 

Start by centralizing the more straightforward tasks like accounts payable, then gradually expand to more complex functions. This systematic approach makes scaling the GBS model far more manageable and ensures a robust, unified financial foundation that keeps pace with the university’s evolving needs.

• Step 3: Power up with technology 

In today’s financial landscape, technology is the engine of GBS success. By integrating smart tools—like financial management platforms, automation software, and data analytics—universities can handle routine tasks faster and extract real-time insights for strategic planning. Automation takes over repetitive work like data entry, allowing staff to focus on higher-impact tasks. Meanwhile, data analytics provides a window into cash flow, trends, and budget variances, empowering finance teams to make data-informed decisions that align with institutional goals.

• Future steps: Continuous engagement

GBS transformation isn’t just about technology; it’s about people. Successful change depends on keeping everyone - faculty, administrators, and staff - on board and informed. A steady flow of communication and targeted training sessions helps foster a culture of growth and adaptability, where the workforce feels prepared to handle both technical tools and evolving workflows. Add in feedback loops, and the university gains a way to continuously fine-tune GBS, adapting processes as needs shift and ensuring that GBS remains a valuable, dynamic part of the institution’s journey forward.

The Strategic Importance of GBS for University Finance

Implementing GBS in university finance is more than an operational upgrade; it is a strategic investment in the institution’s future. The transformation aligns financial operations with institutional priorities, allowing finance teams to shift from transactional roles to strategic partners in achieving the university’s mission.

The Centralised GBS model also enables universities to respond more effectively to financial challenges. With real-time data access, consistent reporting standards, and a unified approach to financial management, GBS-equipped universities are better prepared to navigate funding fluctuations, budget constraints, and regulatory changes. 

By enhancing the resilience of their financial operations, universities can allocate more resources to their core activities, such as research and education, ultimately supporting their mission and societal impact.

Moreover, GBS fosters a culture of innovation and continuous improvement. As the ACCA’s report on the evolution from Financial Shared Services to GBS suggests, a successful GBS model creates a dynamic environment where finance functions are continuously optimized to meet emerging needs. This adaptability is crucial for universities seeking to remain competitive in a rapidly evolving educational landscape.

Final thoughts: Building a resilient future 

In the context of Finance, GBS is a powerful solution offering a streamlined, efficient, and resilient approach to Universities’ financial management. By addressing fragmentation and creating a unified framework, GBS transforms the role of university finance from a transactional function to a strategic enabler, supporting the institution’s mission and vision.

The journey to GBS may require significant change, but the rewards are well worth the investment. Universities that embrace GBS gain not only operational efficiencies but also the strategic flexibility to adapt to future challenges. As higher education institutions continue to navigate funding pressures, regulatory demands, and evolving student expectations, GBS provides the foundation for a sustainable, accountable, and agile financial operation.

In conclusion, the move to GBS is more than a trend; it is a critical step for universities striving to improve their financial resilience and operational effectiveness and to thrive in a competitive and resource-constrained environment. 

For universities ready to embark on this transformative journey, the time to act is now by embracing GBS and building a resilient, strategic finance function that meets the demands of tomorrow.

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