Shared Services, HR Operations, and Global Business Models

Overview

This episode explores the operational engine of global companies, examining shared services, outsourcing, insourcing, and the critical service level agreements (SLAs) that govern these relationships. The discussion covers the evolution from traditional shared services to Global Business Services (GBS), the role of automation and RPA, and the complex challenges of delivering HR services across global models.

Learning Objectives

After completing this episode, participants will be able to:

1. Compare and contrast core service delivery models including Business Process Outsourcing, Insourcing, and Shared Services
2. Analyze the evolution from traditional Shared Services to Global Business Services and the strategic value shift from cost center to strategic capability
3. Evaluate financial drivers including tax optimization, operating expense reduction, and legacy system consolidation
4. Implement technology and automation integration including Robotic Process Automation, Center of Excellence governance, and hybrid workforce management
5. Apply global HR service delivery models including Regional COE, Global COE, Business Partnering, and Follow the Sun approaches
6. Navigate global expansion using Professional Employment Organizations and understanding Permanent Establishment risks
7. Design and implement effective Service Level Agreements including the five types of SLAs and essential components
8. Utilize performance metrics and measurement frameworks including critical KPIs, internal benchmarking, and the Balanced Scorecard approach

Key Takeaways

1. Evolution to GBS: 43% of organizations now use GBS terminology vs. 32% for traditional shared services

1. Strategic expansion: 50% of companies moving beyond traditional back-office work toward strategic value creation

1. RPA requires business transformation: Not just IT initiative but organizational change requiring top management sponsorship

1. COE prevents rogue automation: Center of Excellence essential for governance, compliance, and standardization

1. Follow the Sun enables 24/7: Global service centers provide seamless handoffs across time zones without night shifts

1. PEO shields from PE risk: Professional Employment Organizations avoid permanent establishment tax implications

1. Expatriate costs multiply: International assignments cost 3-5 times base salary including all components

1. Cultural awareness is operational necessity: Cross-cultural service delivery requires deliberate training and adaptation

1. SLA defines the rulebook: Overall agreement on what, why, scope, and responsibilities with KPIs as the scoreboard

1. Performance impacts revenue: Amazon loses 1% sales per 100ms delay; Google loses 20% traffic per 500ms delay

1. Uptime standards vary dramatically: From 99.9% (8.5 hours downtime/year) to 99.999% (5 minutes/year)

1. Internal benchmarking is essential: Baseline measurement before implementation across five key areas

1. Balanced Scorecard provides holistic view: Financial, customer, internal process, and learning/growth perspectives

1. Change management is critical: 59% of companies would focus more on change management in retrospect

1. Post-launch instability is normal: Performance dip expected with cross-functional continuity team essential