by Deborah Kops
Here’s a factoid to impress your GBS friends at your next industry meet up: about 60% of all GBS organizations align to the CFO, according to some recent research I conducted with @Everest Group. And in North America, it’s even more prevalent.
While the CFO role is increasingly focused on growing and transforming the business, at the end of the day, they just can’t leave their cost czar reflexes behind. If you believe that GBS’s value is so much more than cutting $$$, perhaps it is time for a change of command.
The boss sets the direction for any organization. And because GBS is a model, not an orthodox organizational function, its reporting line’s remit plays an outsize role in driving its design, investment, scope, and focus. While there is a lot of truth in the maxim that where GBS reports should be irrelevant as long as the leader is onboard and supportive, I’d hazard to suggest that it’s time to change reporting lines.
There are no absolutes, but looking at the industry, there are strong reasons why GBS should not report to the CFO—especially in an environment that compels GBS to serve as an instrument of agility, continuously transforming the way the enterprise works.
My reasoning is not absolute. There are exceptions to every rule. Far be it for me to say that there are no exceptional CFOs that constantly think and act strategically and drive the value that is in a good GBS’s gift. So hear me out:
- CFO reporting reinforces a “cost control” mindset
When GBS reports to Finance, it risks being viewed narrowly—as a vehicle for cost reduction and control. This can undermine a GBS’s positioning as a strategic enabler, focused on value creation, experience, and innovation. CFOs may be adverse to investing in so-called enabling capabilities and service excellence that drive enterprise, rather than financial outcomes.
- Cross-functional credibility is impacted
GBS as police officer or spy? When GBS sits under the CFO, it can be perceived as financially biased or controlling, reducing its effectiveness when delivering HR, IT, procurement, or customer service solutions. Authority and influence may be compromised.
- It can slow down transformation
Finance functions tend to be risk-averse, compliance-driven, and, as a result, at times slower-moving. This orientation can impair GBS’s ability to innovate, automate, experiment, embrace a customer-first mindset, and adopt agile delivery models.
- Customer experience is usually deprioritized
We know good CFOs prioritize metrics such as savings, efficiency, and compliance. But, the modern GBS must design around user journeys, customer satisfaction, business enablement, and value creation. Reporting to Finance can deprioritize what really drives value in the model.
- Enterprise transformation initiatives are in danger of becoming suboptimized
Our usual catalog of transformation initiatives—digitization, AI implementation, end-to-end process redesign—cut across functions. When GBS is tucked under the CFO, it’s harder to drive cross-functional change at scale, especially in areas outside Finance.
- Legacy metrics are reinforced
Finance-led models tend to focus on SLA governance and budget control as key components of governance. This can clash with an aspiration to shift GBS to an AI-based platform model, which is driven by measurement attuned to user outcomes and agility.
When does reporting to the CFO make sense for GBS?
The history of GBS organizations is written thus: in the beginning, Finance took the initiative to set up shared services to prove the efficacy of rethinking work. Its transactional work was fully contained within its four walls, making it easy to align and manage to deliver finance outcomes in processes such as invoice-to-cash and record-to-report.
And there may be no reason to change reporting lines if GBS’s mandate is primarily focused on finance activities. But, as GBS continues to evolve toward capability-based, customer-centric, AI-fueled, transformation-driven models, this reporting line can become limiting.
Where should GBS report?
If the GBS model’s reason for being is to reinforce critical enterprise agility and enable business outcomes, it’s time to tear up the traditional org chart and align the model with roles that have more purview to drive change and connect the dots across the business. While reporting directly to the CEO, COO, and Chief Transformation Officer all have strong plusses, I’d argue that, given the promise of AI in all its forms, today, the optimal alignment is the CIO.
Here’s my rationale as to why GBS reporting to the CIO makes strategic sense, especially as digital and AI reimagine and redefine how work gets done:
Technology is the backbone of a transforming and transformative GBS
Most of GBS’s new toolkit, such as automation on steroids, AI in all its forms, digitization of workflows, shift left to self-service, and analytics that really drive insights, depends on strong tech enablement. When GBS reports to the CIO, it gains:
- Better access to investments, which are increasing technological
- Alignment to enterprise platforms and architecture
- A seat at the table in enterprise innovation agendas
- New positioning as a co-creator of new working models rather than a mere user of tech
- CIO reporting facilitates end-to-end digital service design
CIOs increasingly operate as experience architects across the enterprise, commanding the implementation of platforms like ServiceNow, Salesforce, and low-code tools. A GBS organizational alignment to the CIO can break up silos by:
- Integrating digital design across functions more swiftly and comprehensively
- Leveraging platforms that orchestrate work end-to-end
Driving more seamless employee and customer experiences
- CIOs think in capabilities, not just cost
Unlike the CFO, whose focus is usually on control and savings, CIOs typically think and organize in terms of:
- Capability enablement, which is closely aligned with modern GBS initiatives that build horizontal capabilities
- Platforms that connect the dots across the enterprise, orchestrating workflows that align GBS activities
- Successful AI and automation straddle both worlds
Silos and boundaries are the enemy of AI-driven service delivery (ranging from intelligent, frictionless ticketing to predictive finance ops). Perpetrating today’s reality that “GBS defines, IT builds, nobody owns” is a non-starter. Put together, GBS’s business process knowledge and the CIO’s function’s technical enablement eliminates artificial handoffs and accelerates intelligent automation far more effectively than if they’re siloed.
- CIO reporting reinforces critical product and platform thinking
In the enterprise, CIOs lead the shift to product-based operating models—squads, platforms, iterative delivery. With a CIO reporting line, GBS untether itself from being a driver of SLAs and become a platform, with the ability to:
- Align delivery teams to digital products
- Embed agile methodologies
- Create continuous service improvement loops
- Data becomes the focus of output as opposed to transactions
Empowered CIOs are stewards of enterprise data. A GBS function under the CIO is better positioned to:
- Take the friction out of access to enterprise data infrastructure, AI models, and automation pipelines
- Unify operational and experience data
- Take master data management to the next level
- Drive insights through dashboards, AI models, and process mining
- Build data-as-a-service capabilities across the enterprise
In short, GBS becomes a data-execution engine, not just a shared services shop.
When is this the right move?
As in life, timing is everything. Moving the GBS reporting line to the CIO works best when:
- The company is undergoing (or planning to drive) a profound enterprise-wide digital transformation, and is serious about reimagination
- GBS is shifting from transactional to capability- and experience-led delivery, and needs a more conducive home
- There’s a strong, if not process-savvy, then process-conversant CIO with an enterprise mandate—not just IT operations
- The transformation goal is to build end-to-end digital workflows across functions
What’s the downside of a realignment?
Changing reporting lines always presents risks:
- GBS can get lost in a tech-dominated agenda and be seen as a stepchild
- The CIO may lack depth in (or appreciation of) non-IT service functions (HR, Finance, supply chain)
- Changing reporting lines is occasioned by “no other CXO wants the headache of GBS”
- Potential overlap with enterprise transformation or COO roles, causing dissonance and confusion
Convinced? BS under the CIO? Questioning whether a re-org is really necessary or runs against current convictions?
It’s not a radical move—I’d argue that today’s business context is a logical one if we want GBS to lead, not lag. In fact, maybe we need to take out a clean sheet of paper, and rather than aligning GBS under the CIO, invent a new top drawer digital delivery function. Chief Digital Platform Officer (CDPO), anyone?
Because structure signals priority.
And if GBS is expected to transform how the business runs, it needs a reporting line that fuels that ambition—not confines it.