Posted on: Jun 30, 2023
What is Business Service Sector – BSS?
As the fairy tale begins: Long, long time ago…
Someone smart realized that it would be the best for Business if they could focus only on their core activities and leave everything beside to be managed by specialists in their matters. That is how thru the years of evolution we arrived at the moment where we have Shared Service Centres and Global Business Services in our wide Business picture.
An enormous group of specialists in Insourcing and Outsourcing is managing our side operations for core businesses. For some companies this core would be production and therefore they need a helping hand to manage for example, finance, controlling, legal, marketing and procurement. For other the core could be pure finance related processed therefore they would rather externalize HR, legal, marketing, administration, maybe also procurement. Either way our Business Service Sector grows and changes at the same time. This is how the evolution goes…
Insourcing or Outsourcing? Different model to choose.
So, what are the current models we observe? Is it only Insourcing and Outsourcing in our menu to choose? Or maybe there is a completely new alternative on the horizon?
“At the beginning it was chaos”… Well not so enormous to lead us to Big Bang but indeed companies were struggling which road to take. Should they go In or Out? Analysis, benchmarking, and discussions where to go, what would be the best were omnipresent.
Outsourcing (Business Process Outsourcing – BPO) puts the pressure on costs, effectiveness, and savings. It is less interested in the harmonization, standardization, company history and culture or even people themselves. The motivation is different as service provider is tight with contract to most effectively perform business side activities completing quite often really wide and detailed Key Performance Indicators – KPI’s. Business expects results and high performance within smooth and straight processes management.
Insourcing (Shared Service Centre – SSC and Global Business Services – GBS) is also a service provider for core business but inside the same company therefore it focusses rather more on growing as a Partner instead of pure economics only. And no one can grow without finding the right path together. This path road needs to be aside business and definitely in the same direction. Shared Service Centre or Global Business Services as part of the whole organization fully identifies and shares the same company values as well as the has their own interest is business process transformation to have those properly harmonized and standardized.
You could still ask: Where to go? What is the golden middle?
New trend – Hybrid
Why then not to merge those two approaches and have a Hybrid?
We sign contract with Business Process Outsourcing to manage our base, straight forward operational transactions but in parallel we create Shared Service Centre/ Global Business Services (or even sort of Centre of Excellence) to work Together. Both are working side by side.
Seems like quite logic solution, right? More of the companies are choosing this road now. There, where we need pure effectiveness and straight operational process execution, we delegate it to the 3rd party provider and at the same time we trust potential business transformation of processes to our internal counterparty Global Business Services. Those hybrids work already in our real life, and it is no more only a wishful thinking from a fantasy world.
Why Global Business Services – GBS is important in your organization?
When we talk about Insourcing and creation of Shared Service Centre / Global Business Services, we need to be aware that this organisation should become a real Business Partner and not only a pure service provider.
Why is that? Why it is so important? Answer is actual very obvious. Because the goal is to entrust to Global Business Services the operational process execution and business process transformation paired with standardization and harmonization. We “hire” Shared Service Centre with highly skilled specialists to guide us thru this path. Core organization holds the wheel and shows direction where they want to go, but GBS should provide proper tool all the way. We all know that taking part in the race without proper tools and support would not be the best idea. Core business do not want to waste time for aside activities, so they need to allow specialist they hire to guide them. We all know this saying: “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 needs to proof it’s worth to the business first, to become a full-page partner. Again, starting the race with weak tools and support is not the right alternative either. The approach of small steps if quite often realized when the core organization is not fully convinced by the GBS strategy. Once insourcing provides tangible results, it gains trust and business is willing to elaborate about the potential additional scope. As a result, we have not just the simple service provider, but a real partner in our business journey with the same values, goals and of course: future.
Is technology automation and digitalization a threat for BSS?
What about the whole world currently rushing towards technology automation and digitalization?
It is another crucial factor impacting our current lives. And it does not matter if we talk about private life or business reality. Technology enters everywhere and we cannot stop it.
We are getting scared after watching “Terminator” that the technology will replace us or even worse.
Our job is to embrace this global rush and think how to use it in a proper, smart way.
Does the automation give us a helping hand? YES! When used for basic, straight, time consuming and boring activities.
Will the technology automation and digitalization replace our creativity? Definitely NO!
Let’s give away those boring and repetitive duties to robots and unleash human potential to focus on more exciting inventions.
All the above reflections were highly inspired by the fantastic group of people we had a chance to meet during our Master Classes event.
As every year we have invited, our clients, friends and so a great business leader to join us at Polish seaside and share their stories, point of view, challenges with all of us or even advise within each other. Perfect space to get to know our current trends in business service sector, check how they are doing it and of course ask the main question: Does it really works?
We all know that there can be a long road from theory to reality. This opportunity to have idea’s exchange with all those knowledgeable people allows us to already eliminate some dead ends. Because, in the end, all about the knowledge is sharing it to fuel this whole evolution thing, right?