From Fragmentation to Transformation: A future for GBS in HE?

A simple search on Google (or another AI driven search engine if you are that way inclined) yields a series of reports that foreshadow the decline of the UK’s higher education sector. It is not pleasant reading. There are a variety of triggers for this prophesied doom, including the usual focus on government funding, demographic shifts, global competition and overreliance on international students.

One that seems to crop up occasionally, and which feels within the scope of our ability to influence, is the increasing operational costs and wastefulness associated with the ways in which universities are run. HE institutions in the UK have long operated in a landscape characterised by autonomy and decentralisation. While this autonomy supports academic innovation and diversity, it has also led to inefficiencies, misaligned processes, and a lack of unified technological and financial strategy. The increasing pressures of reduced available funding and rising operational costs are exposing these vulnerabilities. Added to this are heightened regulatory scrutiny as well as growing expectations from students and other stakeholders (both internal and external) for better value for money.

The challenges, along with the wider landscape in which UK universities operate, are not merely academic. Warnings of potential bankruptcies within the sector underscore the urgency of transformation. 

Could Global Business Services (GBS) provide a viable pathway for universities to address these pressures and build resilience? This article seeks to explore this question.

Starting with Shared Services

Shared Services has long been recognised as a tool for improving efficiency in administrative functions. By consolidating processes such as payroll, procurement, and IT support into centralised hubs, institutions can eliminate duplication, reduce costs, and improve service delivery. However, while Shared Services is effective at achieving cost savings within specific functional silos, it often falls short of delivering broader transformation.

The challenge with Shared Services is its tendency to operate within defined boundaries. HR shared services, for instance, may function independently from finance shared services, creating new silos even as others are dismantled. While this approach improves efficiencies within discrete areas, it does not address inefficiencies across interconnected processes that span multiple functions. For universities facing sector-wide pressures, the need for a more integrated solution becomes evident.

Why GBS is the next step

Global Business Services builds on the foundations of Shared Services by integrating multiple functions under a single operational framework. Instead of managing HR, finance, IT, or procurement as separate entities, GBS unifies them, optimising processes that cut across these areas. For example, a GBS model enables the seamless management of end-to-end processes like student enrolment, research grant administration, or tuition billing and collection, all tasks that require coordination across multiple departments.

The benefits of GBS extend beyond operational efficiency. By breaking down silos, GBS enables institutions to leverage data more effectively, ensuring consistency, accuracy, and accessibility. This holistic approach not only reduces costs but also enhances decision-making, compliance, and stakeholder satisfaction. For universities, adopting GBS represents a shift from operational support to strategic enablement—a critical transformation in today’s competitive landscape.

How GBS Transforms Higher Education

Universities adopting a GBS model stand to gain significant advantages, both operational and strategic. 

First, GBS centralises routine and transactional tasks, such as payroll processing or procurement, allowing institutions to redirect resources to their core missions of education and research. By standardising processes, GBS reduces redundancies, handoffs, and improves service delivery, creating a more agile and scalable operating model.

Second, GBS enhances data management and analytics. Fragmented systems often lead to data silos, limiting institutions’ ability to gain insights into financial and operational performance. GBS integrates these systems into a unified framework, enabling real-time analysis and predictive modelling. As a simple example, GBS can provide dashboards that consolidate performance metrics across departments or faculties, not just for financials, but also tied to queries raised, timeframes, cost analysis and more, which will empower leaders to make informed decisions quickly.

Third, GBS ensures consistency in governance and compliance. Decentralised systems often result in inconsistent policy application, exposing institutions to compliance risks. GBS enforces uniform standards and controls, reducing errors and safeguarding institutional reputation. This is particularly critical in the context of regulatory scrutiny and rising stakeholder expectations.

Finally, GBS fosters collaboration and innovation by breaking down barriers between departments. With a unified operational framework, universities can align resources more effectively, driving innovation in areas such as digital transformation and student engagement.

GBS Across Universities: A collaborative vision

The transformative potential of GBS is evident in examples from both global and local contexts. The University of California’s adoption of a shared services model across its ten campuses demonstrates how centralisation can reduce costs and improve data transparency. By integrating finance, HR, and IT services into a unified framework, the university positioned itself to address financial pressures while enhancing service quality.

However, an often-overlooked advantage of GBS is its potential to serve multiple institutions through a single, shared framework. Cross-university GBS deployment could allow universities to pool resources, standardise processes sector-wide, and achieve economies of scale that are unattainable for individual institutions. For example, a single GBS hub could manage payroll, procurement, and IT services for several universities, reducing duplication and spreading costs more effectively.

Examples of these types of initiatives have been seen already (see Combined Universities in Cornwall, APUC, or RLUK), but there is potential for so much more. Bringing such a collaborative approach across the UK HE would foster innovation and shared learning, collective negotiation with technology vendors, sector-wide data integration enabling more comprehensive insights into trends and challenges, and supporting strategic decision-making on a national level. In essence, a cross-university GBS model represents not just an operational improvement but a strategic advantage for the UK higher education sector.

Implementation: The roadmap to GBS

Transitioning to GBS requires careful planning and a phased approach. From experience, the first step of any such initiative is to map existing processes, identifying inefficiencies and redundancies. 

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, bespoke to each university, acts as a guide and a foundation that sets clear goals, governance, and standards to anchor GBS operations firmly within institutional priorities. 

Universities must then engage stakeholders to build consensus around the need for change. Transformation isn’t just about technology; it’s about people. Successful change depends on keeping everyone, faculty, administrators, staff, and other stakeholders on board and informed. This transparent communication is essential, as is demonstrating the tangible benefits of GBS to staff, students, and other stakeholders.

Technology plays a critical role in enabling GBS. Advanced platforms such as enterprise resource planning systems provide the infrastructure needed, and robotic process automation can handle repetitive tasks, freeing staff to focus on strategic initiatives. Additionally, data analytics tools can provide real-time insights into financial performance, enhancing decision-making and enabling continuous improvement.

A phased implementation strategy allows universities to manage risks and build capabilities incrementally. Institutions can start with transactional processes, such as payroll or accounts payable, before expanding to more complex functions like budgeting and strategic planning. This approach ensures that early successes build momentum for broader transformation.

Add to this artificial intelligence which is rapidly reshaping the operational landscape across industries, and its integration within GBS has the potential to amplify efficiencies and innovation in higher education. AI-powered tools can complement GBS frameworks by automating complex tasks, providing real-time insights, and enabling predictive analytics. 

For instance, generative AI is already being deployed by major consulting firms to automate routine administrative tasks like email drafting, data formatting, and document summarisation, saving employees significant time to focus on higher-value activities. KPMG has developed 'KymChat,' a generative AI platform that assists in daily operations, reportedly saving the company over 200,000 hours in routine tasks. AI-enabled systems also strengthen the strategic capabilities of GBS by integrating advanced data analytics and machine learning algorithms, anticipating operational bottlenecks or resource constraints and enabling proactive decision-making.

Just as the growing use of AI in law firms (see “Harvey AI”), university GBS could leverage AI tools to improve interdepartmental or student communications, forecast fluctuations in student enrolments or funding allocations. Additionally, real-time dashboards powered by AI could provide comprehensive insights into operational performance, supporting continuous improvement and innovation.

While the integration of AI poses challenges such as cybersecurity risks and the need for robust data governance, these hurdles can be managed with careful planning and investment. The potential benefits, from cost savings to enhanced decision-making, make AI a critical component of a future-ready GBS framework.

Challenges to implementing GBS:

Implementing GBS is not without its challenges. Resistance to change is a common obstacle, particularly in institutions with a strong tradition of decentralisation. Overcoming this resistance requires clear leadership, effective communication, and robust training programmes to support staff through the transition.

Integrating disparate systems and processes is another significant challenge. Many universities rely on legacy systems that are not designed to support centralised operations. Transitioning to GBS necessitates investment in technology and expertise, but these upfront costs are outweighed by the long-term benefits of increased efficiency, reduced costs, and enhanced decision-making. A warning is necessary at this point in regards to technology; there should be a willingness to embrace the changes technology can bring, rather than using new innovations to recreate or simply enhance old (and perhaps inefficient) working practices. 

A call to action

The financial and operational pressures facing UK higher education demand urgent action. Shared Services can provide a starting point, delivering immediate efficiency gains within specific functions. However, to achieve sector-wide transformation, universities must move beyond Shared Services to adopt GBS.

GBS provides a framework for integrating operations, enhancing efficiency, and aligning services with institutional strategy. By breaking down silos, fostering collaboration, and leveraging data, GBS enables universities to build resilience and maintain their competitive edge. 

For UK higher education, the time to act is now. Transformation through GBS is not just an option, it is a necessity for the future of the sector.

For more insights into the future of finance shared services, SSON is delighted to once again be hosting the AP Automation Virtual Summit. Join the 10th iteration of the event to explore cutting-edge AI tools for advanced data analytics and compliance with e-invoicing mandates. Learn from experts on optimizing efficiency, reducing costs, and combating fraud in AP operations.