Why are only 5% of SSOs implementing GBS?
Global Business Services, or GBS – the integrated compilation of global service offerings for multiple support functions within a company – is the Holy Grail of service delivery, and the acronym most likely to lead to clicks when included in a headline. The three letters imply a maturity and sophistication of shared services that most can only aspire to.
So, why are there still only 184 GBS in SSON Analytics’ database?
Plenty of reasons, as it turns out. Among other things, Global Business Services entails an authority and decision-making capability that extends across various country and regional demographics, as well as internal functions and administrative departments. And you don't need me to tell you that this presents a political minefield of sorts. In truth, the hurdles to implementing a global anything are significant.
In a recent survey SSON conducted among Nordics-based shared services, nearly half the respondents confirmed that they were not currently moving towards GBS; and for the rest, the challenges named included establishing global process ownership, managing competing stakeholder claims or turf wars, and standardizing delivery across regions.
Those tasks are not for the faint of heart.
In fact, these kinds of concerns mean that, of the nearly 3,500 SSOs in SSON Analytics’ database, less than 200 currently qualify as having either embarked on or fully implemented Global Business Services. To provide a better context: that is just 5% of all SSOs.
SSON’s research team recently examined these GBS organizations to determine key characteristics around enterprise type, growth, and functions. In other words: what kind of companies are adopting a GBS strategy for service delivery, and what do these ‘services’ look like?
One of the most notable findings was that less than half of these GBS are fully implemented – in other words, six out of 10 are still in the "partial implementation" phase. The other key finding is that most GBS are run by enterprises with North American Headquarters – and the kind of organizations that have the appetite and the commitment to take on global strategy like this are generally large (in excess of $10 billion).
So, it would seem that size, or at least scale, matters.
But while overall implementations may be relatively few, GBS adoptions have also doubled since 2013, with the bulk of this growth represented by "partial" implementations.
Source: SSON Analytics – Evolution of Global Business Services to 2017: The Story So Far
This growth is explained by the multiple advantages of the GBS model – namely, that it allows you to standardize services globally, position one individual as the process owner for all service delivery, and streamline technology implementations in support of efficiency and more effective service support. The benefits, apart from like-for-like support across global operations, include the ability to leverage best practices, and to analyze global transactional data for optimal resource allocation and to improve decision-making.
And yet, for many businesses, GBS is not the ideal solution. Even though enterprises may want to target "the best", the truth is that "just short of the best" may be absolutely good enough.
Global Business Services continues to dominate shared services’ headlines, with everybody trying to understand how to overcome implementation hurdles and how to qualify actual returns. In truth, you don't have to implement true "Global Business Services" to learn from and adopt some of the advantages of this model. Many organizations have evolved to a kind of halfway house of leveraging some of the characteristics (and therefore harvesting some of the wins) while avoiding the more sensitive issues associated with GBS implementation (and that is ignoring those centers that hang a GBS sign above their desks, professing a mature service delivery strategy, while having nothing more to show than a number of SSCs across a global landscape).
Note: SSON Analytics has identified 184 shared services organizations (SSOs) that have embarked on their Global Business Services (GBS) journey. Play with the data in this interactive report to find out where they are, what functions they service, their maturity, growth trends, attrition rate, GPO model, and more.
SSON will be publishing a comprehensive GBS report later this year, referencing SSON Analytics data, and researching with GBS leaders. Please keep an eye out for the announcement of this report online.