KPMG's 'Extended Global Enterprise': A Strategic Approach to Shared Services and Outsourcing

NEW YORK, July 20 /PRNewswire/ -- A new paper titled "The Extended Global Enterprise Advantage" explains how companies can work to attain efficiencies beyond cost savings from their outsourcing and shared services by taking a more holistic approach. The paper was released today by the Shared Services and Outsourcing Advisory network of KPMG LLP, the U.S. audit, tax and advisory firm.

The Extended Global Enterprise (EGE) model is an evolved approach to services delivery that seeks to break down functional and business unit silos to identify and leverage the most appropriate mix of internal and external capabilities around the globe. The KPMG whitepaper explains that the end goal of EGE is not simply to reduce additional costs, but also to improve the efficiency and agility of the services delivery model to tap into new capabilities and innovations, and gain access to new markets.

"Similar to how just-in-time revolutionized manufacturing or how cloud computing is transforming IT, the EGE framework changes the way technology and services are purchased, priced and delivered," said Cliff Justice, KPMG's national leader for Shared Services and Outsourcing Advisory. "Companies tend to measure the benefits of outsourcing and shared services in strictly cost savings, but companies that stop at labor arbitrage are missing the significant – and strategic – benefits that an EGE model can bring to the entire organization."

The KPMG paper explains the benefits of EGE, and maps out a path for companies looking to transform into an EGE. The paper also discusses the four key differences between the EGE and a traditional approach to outsourcing and shared services delivery, which include:

• Customer Need: The EGE is driven by customer need, rather than organizational expedience. Demand and supply of services are balanced.
• Tailored Offerings: One-size-fits-all service offerings are replaced with a portfolio of retained, outsourced, and centralized service offerings with tiered, tailored, and bundled services across functions.
• Portfolio of Offerings: Simple vendor management is replaced with a more sophisticated Services Portfolio Management (SPM) organization, managing a portfolio of service offerings rather than managing individual functions.
• Increased Agility: The goal is to increase agility and competitive advantage – not simply cost cutting. However, many organizations realize additional cost savings by adopting an EGE approach.

"With advancements in technology and standards, companies have more options to address their service needs, allowing for faster and easier addition of new capabilities, and making the physical location of systems completely irrelevant," added KPMG's Justice. "The EGE model takes advantage of these advancements, with the end result being a single, common strategy within a common services delivery framework designed to achieve a common goal."  

To access a copy of The Extended Global Enterprise Advantage, please visit: www.us.kpmg.com/services/content.asp?l1id=10&l2id=650&cid=3449.

About KPMG's Shared Services and Outsourcing Advisory Group

KPMG's Shared Services and Outsourcing Advisory (SSOA) group works with companies across a wide spectrum of maturity and practices. SSOA helps clients as they assess current operations and strategy, develop a practical roadmap, address change management issues, centralize and optimize capabilities, outsource functions, and create a sustainable governance and performance management model.

About KPMG LLP

KPMG LLP, the audit, tax and advisory firm (www.us.kpmg.com), is the U.S. member firm of KPMG International Cooperative ("KPMG International.")  KPMG International's member firms have 140,000 professionals, including more than 7,900 partners, in 146 countries.

SOURCE KPMG LLP

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