Gen AI Is Not the End of Shared Services. It Is the End of Poorly Designed Shared Services.
The prediction that Gen AI will eliminate shared services mistakes automation for transformation. The real question is whether shared services were solving the right problems to begin with.
Three Takeaways
- 1
Shared services exist to consolidate transactional work. Gen AI automates transactional work. The math is obvious.
- 2
But the assumption that shared services only do transactional work is wrong in most organizations.
- 3
The organizations that will navigate this well are redesigning shared services, not eliminating them.
KPMG published a companion piece arguing that Gen AI could be the swan song for shared services. The argument has merit but misses a layer.
The Structural Logic
The logic is clean: shared services consolidate transactional, repeatable work to achieve efficiency. Gen AI can perform transactional, repeatable work faster and cheaper than centralized human teams. Therefore, shared services as currently designed face existential pressure.
This is true as far as it goes.
What It Misses
The assumption embedded in this analysis is that shared services are actually doing transactional, repeatable work. In practice, many shared services functions have accumulated non-transactional work over time.
Judgment calls that could not be automated live in shared services. Complex case management lives in shared services. Institutional knowledge lives in shared services. These are not transactional. Gen AI cannot simply replace them.
The Real Problem Gen AI Reveals
Gen AI does not threaten well-designed shared services. It threatens shared services that were never properly scoped.
When organizations built shared services, they often moved everything that looked like back-office work without asking what type of work it actually was. Now Gen AI is forcing that question.
The Redesign Opportunity
Organizations that approach this well are asking: What work in shared services genuinely is transactional? Automate it. What work requires judgment, relationship, or institutional knowledge? Redesign it. What work should not exist at all? Eliminate it.
This is a design exercise, not a headcount exercise.
The Bottom Line
Gen AI will not eliminate shared services. It will eliminate the organizational avoidance that allowed poorly designed shared services to persist.
Source: KPMG, "Why the introduction of generative AI could be the swan song for shared services," 2024
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About GeneralArc
GeneralArc is operating model architecture for the AI transition. Its methodology was built across more than two decades inside the operating models of JPMorgan Chase, McKinsey & Company, Nomura, and Deutsche Bank — leading change across 100,000+ employees.
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