Looking for ways to save? A recent study by the benchmarkingfirm the Hackett Group suggests that implementing a global sharedservices model can cut costs substantially. Hackett estimatesworld-class companies with global business services units save morethan 50% in labor costs and 25% in other costs.

Michel Janssen, Hackett's chief research officer, describesglobal business services (GBS) as “shared services on steroids,” ascompanies include more functions and processes. Finance is usuallythe first function moved to a shared services center, but a globalbusiness services unit might also encompass HR, IT or procurement.According to Hackett, 75% of Global 1000 companies surveyed haveshared services units that integrate the processes of more than onebusiness function.

Companies take a wide range of approaches to shared services,Janssen says, and where savings are realized depends on thematurity of the effort. Companies that locate shared services unitsoffshore save initially on labor costs, he says. But as companiescontinue to utilize shared services, “the ultimate savings isautomation,” Janssen says. “If you can arbitrage from a human beingto a computer that requires electricity rather than benefits,that's a bigger source of savings.”

The stagnant economy is reinforcing the trend toward globalbusiness services. “If you can't grow the top line, the next bestway to get profit increases is to work on the back office,” Janssensays.

As the trend toward global business services picks up steam, thefield “is becoming a profession in its own right,” Janssen says.“People learn specific skills around global business services,” hesays. “It's not just something that's in the corner anymore.”

At the same time, offshoring or outsourcing so many lower-leveljobs poses a long-term challenge for companies' talent management.“GBS's are creating havoc in the traditional talent pyramid,”Janssen says. “It changes the dimensions of the talent pool.”

He notes that he started his career as an assistant financialcontroller. “My job now would probably be in a low-costcountry.”