Posted on: Jun 30, 2023
What is Business Service Sector (BSS)?
As any fairytale begins:
Once upon a time…
Someone smart has realized it would be best for their Business to focus on their core activities only and to leave everything else to other specialists. That is how Shared Service Centres and Global Business Services came into the Business picture.
An enormous group of specialists in Insourcing and Outsourcing manages the side operations of our core businesses. For some companies the core business is production, therefore they need assistance in managing finance, legal matters, marketing, and procurement. For others, the core are finance related processes which require external support in HR, legal matters, marketing, administration, and, potentially, procurement. Either way, our Business Service Sector evolutionary grows and changes at the same time.
Insourcing or Outsourcing? Different models to choose from
What are the current models we observe? Is it only Insourcing and Outsourcing, or is there a completely new alternative on the horizon?
At the beginning it was chaos and companies were struggling to choose between going In or Out. Analysis, benchmarking, and brainstorming were omnipresent.
Outsourcing (Business Process Outsourcing – BPO) puts the pressure on costs, effectiveness, and savings. It is less interested in the company’s history, culture and people, and does not care for harmonization or standardization. The motivation is to effectively perform business side activities and to complete broad and detailed Key Performance Indicators (KPIs). Business expects performance with evident through smooth processes management.
Insourcing (Shared Service Centre – SSC and Global Business Services – GBS), similarly to Outsourcing, is a service provider dedicated to core business. However, since this core business is internal – it is inside of the company – it focusses on growing as a Partner. No one can grow without finding the right path which needs to be running along business and in the same direction. SSC and GBS identify and share company values in business process transformation and in ensuring they are harmonized and standardized.
You could still ask: Which way to go? Is there a compromised path ?
New trend – Hybrid
Why not merge these two approaches?
We sign contracts with Business Process Outsourcing to manage our base operational transactions and, simultaneously, we create Shared Service Centre and Global Business Services to work hand in hand.
More and more companies choose this solution. Whenever we need effective operational process execution, we delegate it to a 3rd party provider and trust our internal counterparty Global Business Services with potential business transformation of processes .Why are Global Business Services (GBS) important for your organization?
Whenever we talk about Insourcing and creation of SSC/GBS we need to remember that the organisation should be treated as a business partner, and not only as a service provider.
This is crucial because although the core organization holds the wheel and chooses direction, GBS provide proper tools for the whole journey. There is a great phrase summing this symbiotic relationship up: ‘We do not hire specialists to tell them what to do, we hire them to teach us how to do it.’
On the other hand, Global Business Services need to prove it’s worth becoming a full-time partner. The approach of small steps is often chosen when the core organization is not convinced by GBS’ strategies. Only once Insourcing provides positive results, it gains the business’ trust. As a result, we gain a business partner with similar values and goals for the future.
Is technology automation and digitalization a threat to BSS?
What about technology automation and digitalization? Both are crucial factors impacting our private and work lives. Our job is not to be scared of automation and digitalization but to embrace them and use them to our benefit.
Automation can be beneficial when used for simple but time-consuming activities.
Will technology replace our creativity? NO!
Let’s pass boring and repetitive duties to robots and use out human potential on coming up with exciting inventions.
All the reflections above were inspired by the fantastic group of people met during our Master Classes event.
Every year we invite our clients, friends and business leaders to join us at the Polish seaside and share their stories and . The best way to get to know the current trends in business service sector and check if they really work?
We all know there is a long way from theory to reality. The opportunity to have ideas exchanged with knowledgeable people allows us to eliminate dead ends ahead. Because, in the end, sharing knowledge is fuelling business evolution!
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