The Glam around GBS

It’s impossible to escape the newest buzzword in the industry—Global Business Services or GBS. Pick up any article, or go to a conference, and you’ll see GBS touted as the best thing since sliced bread. Is it really a trend, or just more evidence that there’s nothing new under the sun? In what seems eons ago—back in 1999—I had the opportunity to take a first pass at developing an organizational platform that would aggregate all business services under one umbrella, standardizing the sourcing process, solutions, governance, and administration across processes. With a portfolio approach, proponents posited, the enterprise would be able to leverage every aspect of sourcing origination and management—from using the same consulting rate cards to preparing a standard set of reports for senior management. Fast forward to 2012 and you’d think that GBS is the latest breakthrough in sourcing innovation. Consultants of every stripe are getting on the bandwagon, encouraging practitioners to take the next step in business model evolution. But is this a viable trend, or just so much hype? Certainly there are good examples of GBS in place in CPG companies—the much vaunted Procter & Gamble and Unilever operations immediately come to mind. But a trend? I tend to think not. Here are three reasons why— The organizational trend du jour in multi-nationals—the only organizations with scale and scope to render GBS viable—is to de-layer, not add another level of management. More often than not, companies are devolving to a regional or business unit led model, underpinned by shared services and outsourcing. Investing in a board-level function that works horizontally across all vertical organizations is hard to justify. Ever try to get a CFO, a CIO and the chief people officer on the same page? Try organizing them as co-stakeholders in a horizontal business utility with the ambition to serve all their process needs. Organization silos being what they are, it’s a rare set of CXOs who can pull it off. While certainly there’s a good opportunity to leverage best practices in sourcing, true services integration comes from technology enablement. Let’s face it—what organization has really integrated platforms such as Oracle HR and supply chain? Best practices can be promulgated by an organization investment far less intrusive—and expensive—commonly called a center of excellence. I’d suggest it can deliver much of the value with much less institutional and political headache, not to mention cost. Let’s check back at the end of the year to see how many companies get on the GBS bus. I suspect after organizations start to kick the tires, few will have the appetite to go for the ride. [inlinead]

The Glam around GBS

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