Can YOU Define GBS?
I was reminded, recently, of the widespread confusion and lack of standardization around the definition of Global Business Services, or GBS.
Deloitte defines Global Business Services as:
Instead of operating numerous Shared Service Centers and managing outsourcing vendors independently, Global Business Services provide integration of governance, locations and business practices to ALL shared services and outsourcing activities across the enterprise.
I think this is a pretty good definition.
I also checked with Phil Searle of Chazey Partners, whom I've known for many years, and who adds that Global Business Services covers multiple aspects of sourcing: Internal shared services, supporting multiple functions/service lines, across multiple business units/regions/countries/jurisdictions, optimizing use of locations (onshore/nearshore/offshore), with the best mix and use of third party outsourcing relationships.
In a recent report published by SSON, Global Business Services: Transformation Driver and Digital Enabler, the benefits of a GBS framework are explained. For example, a flexible business services structure can respond quickly anywhere in the world by leveraging global operations, talent, and technology. The key advantage of GBS, according to the report, is its support of organizational agility. For any enterprise wanting to stay at the forefront of its industry, the ability to react quickly to opportunities, threats, or economic considerations is critical. GBS supports this.
The report also includes interviews with 10 GBS leaders who share lessons learned and insights on how GBS supports modern enterprises objectives.
Andrew Jackson, for example, who heads Global Shared Services at Anglo American points out that we need to transform the traditional pyramid organization into a diamond standing on end:
"If you consider the traditional triangular pyramid standing on its base, with leaders at the top, thinkers in the middle, and a broad base of do’ers at the bottom – we now need to transform this into a diamond standing on its end. The thinkers need to be expanded in both scale and scope by shifting roles traditionally associated with do’ers into higher order thinking capability."
"But it's a tough change to make," he warns.
In today's market, GBS is recognized as a critical enabler for intelligent automation. That trend is clearly identified in the State of the Global Shared Services Market Report 2019, published by SSON earlier this year. It highlights not just the fact that leveraging automation is one of the key drivers of the GBS model, but also that while 30% of global shared services are already operating as GBS, another 33% plan to move to GBS in the next five years.
The key point is that GBS works towards true end-to-end processing and service provision, supported by effective and best practice technology, all operating under one global delivery framework.
Today, this transition is becoming easier. Donald Ryan of KPMG refers to "digitalized GBS" as the future of business services. The automated enterprise makes it easier, he explains to SSON's editor, for organizations to move to GBS because processes are already standardized and largely automated.
In aiming to optimize your GBS service delivery model, you may want to evaluate your strategies around multifunctional, mix of internal shared services and third party outsourcing, combination of sourcing into one consistent global delivery framework, etc.
If you work to different definitions – or, indeed, have other suggestions, please share in the comments box below.