What’s Scaring Shared Services Organizations in 2023?

Being a shared services leader requires strategic thinking, strong mentorship, and communication skills, but maybe most importantly, a change management background that allows leaders to identify and mitigate risks.

Obstacles are inevitable in shared services, and every leader can expect a cold call from their CFO or an email line with “URGENT” in the subject line. However, the leaders who are prepared will be the most equipped to face a challenge and present an appropriate solution. 

Dave Hughes, a shared services transformation specialist and member of SSON’s Global Advisory Board, has experience overcoming hurdles and shared with SSON what he believes should be the biggest concerns for the shared services industry right now.  

Political uncertainty 

Conflicts in the Middle East and Ukraine demonstrate today's environment of geopolitical tension, but how will this uncertainty impact GBS and shared services? Leaders must consider how changes in international relations will impact supply chains and market access for their organization. Additionally, they must weigh the future impact on operations and outsourcing arrangements and think about how to support their people should they be caught up in any conflict. 

Economic uncertainty 

Economically speaking, the world is in a VUCA environment. Economic fluctuations, inflation, and exchange rate volatility have impacted businesses financial stability since the pandemic began in 2020, thus affecting organization’s pricing strategies and investment decisions.

The question remains, what role is GBS and shared services playing to face this uncertainty? Are GBS leaders driving the discussion to navigate the organization to safety or are they following the lead of others? 

Supply Chain Risk

The COVID-19 pandemic triggered supply chain disruptions that are still being felt by some industries. Even beyond the pandemic, global businesses face risks related to supply chain disruptions, including natural disasters and transportation issues.

“COVID-19 highlighted the vulnerability of global supply chains,” said Dave Hughes. “What role is GBS playing to reduce risk and ensure continuity of supply?” 

Cybersecurity

2023 has proven that no one is safe from cyberattacks. Schools, governments, businesses, and individuals have all had to face the rise in cyberattacks and data breaches. In many cases, the need to protect sensitive business information is a task for shared services and GBS. Going into 2024 the question will be asked: how can these organizational support systems manage the risk of a potentially devastating cyber-attack? 

Talent management 

Attracting, retaining, and managing a diverse and skilled workforce across different countries has become a huge challenge, especially in the post-pandemic era. In fact, EY reported in May that 81% of businesses are facing a shortage of skilled tech workers. 
 
According to SSON Research & Analytics, shared services and GBS are deploying several unique techniques to attract talent. Two-thirds of SSO/GBS are leading with a revised employee value proposition, and other leading initiatives involve leveraging the company brand (63%) and broadening talent acquisition channels to include more innovative social channels (50%). 

Climate change 

Increasing environmental concerns and regulations may require businesses to adapt their practices, reduce carbon footprints, and address sustainability goals (all well maintaining shared services core targets of cost-saving and economies of scale).

We are already seeing SSOs/GBS play an increased role in their business's ESG (environmental, social, governance) initiatives, and in 2024, shared services will have to continue guiding the organization as it aims to reach their environmental goals. To understand more about the role shared services are playing in ESG, be sure to check out the latest ESG report from SSON Research & Analytics.

Technological disruption 

Rapid advances in technology, including artificial intelligence, and automation, are forcing businesses to quickly transform. GBS must understand how technologies like generative AI can be leveraged and how these new solutions will impact the future of work. With greater automation comes greater technology risk, this includes the risk of system failure, lack of return on investment or cyber security attacks. 

Data privacy and ethics

As technology advances, individuals and teams are beginning to share their doubts regarding data privacy and the ethical use of data. The risk of improper data usage, storage or collection has huge consequences for a company’s reputation, customer base, and can result in large fines. 

Compliance with evolving regulations and adopting responsible data practices is a long, expensive and arduous task which often falls to shared services to realize.

Health crises

The ongoing threat of health crises (both mental illness such as anxiety and physical illness such as seasonal flu, RSV or Covid-19), highlights the need for robust crisis management and contingency planning. 

What role can GBS play in managing these risks and weathering the organization from crises? This summer, in the midst of an intense heat wave sweeping across the U.S. and Europe, SSON shared an article on tips for business continuity planning, which could be a helpful resource as we enter flu season. Meanwhile the importance of supporting employee wellbeing and stress management is being highlighted throughout SSONs content. 

Competition & threats to the shared services model

Increasing competition from both established companies and startups is challenging businesses to differentiate themselves and innovate.  A bi-product of this in the last two years has been a focus on cost reduction, resulting in some organizations moving away from GBS models. This shift in perception of the GBS model is bringing many leaders to wonder how to proactively ensure GBS drives value for the organization.