Shared services are a hot ticket: survey

Shared services -- aka service-oriented or cloud-based services that are accessible via an enterprise or cross-enterprise registry -- are hotter than hot. That's the conclusion of KPMG's latest survey of KPMG field advisors and global business and IT service providers.

Demand is increasing for shared services models and internal process improvement as organizations look to enhance business performance, KPMG says. The consultancy says 59% of the field advisors anticipate greater demand from clients for shared services delivery models, while 51% saw more demand for internal process improvement.

As Stan Lepeak, research director in KPMG’s Shared Services and Outsourcing Advisory group put it:

“Leading organizations today receive measurable business value from shared services -– above and beyond driving costs. This involves driving and improving overall business performance as well as competing for internal business on level ground with external service providers.”

Other key findings include the following:

• Service providers are bullish on new deal pipeline growth: Among providers surveyed, 74% expect customer demand for business and IT services to increase over the next one to two quarters.
• Improvement in current shared services and outsourcing governance processes and capabilities: Sixty-six percent of advisors cited this as the most common approach taken to improve service delivery capabilities. This was the top cited approach across all major geographic areas, and among both advisors that primarily support business services (HR, F&A) and those that support IT service and operations.  The next most commonly cited approach was the use or expansion of information technology outsourcing/ITO (43%).
• Banking, financial services and insurance (BFSI) is the top industry group: Financial services companies show the greatest demand for shared services/outsourcing services, as noted by 82% of service providers. At a distant second the energy, utilities, oil and gas, and manufacturing industries tied for second at 32%.
• Services providers are more bullish on buyer uptake levels of cloud solutions than are advisors: Forty-two percent of service providers polled indicate that their clients have one or more live cloud services deployments in the field and that this would increase to 66% in 12 months.

Organizations seem to understand the technical components of cloud services, as well as how it can help their enterprises. However, there is confusion on where these services should come from. Survey respondents gave high marks to buyers’ “understanding the technical underpinnings of cloud computing - how it works,” as well as “understanding how cloud computing options can complement or supplant traditional enterprise systems and/or outsourcing investments.” Coming in at the bottom of the rankings were skills relating to both sourcing and managing cloud computing initiatives.