Global Business Services – Is It Worth It?

Let’s start from the scratch…

Before we will go into details regarding Global Business Services, we need to take step back and paint a picture of today’s business environment to have better understanding and perspective.

It does not matter if we are thinking about micro, small, medium, or large – sized business, organizations are always exploring how to perform our processes in effective and efficient way. Or at least they should do it if they want to stay on the market. 😉

Smaller companies might be looking for example for help in Finance, so they will cooperate with external accounting company who will be responsible for employees’ salaries calculation.

Corporations are also wondering how to perform different processes in better way and during their search, they will come across different teams like BPO, SSC or GBS. Every model focuses on supporting the business units and giving them space to concentrate on their core activities. Their aim is also gaining process efficiency improvement and cost reduction, however there are few differences how and why they are doing it.

What is BPO, SSC, GBS? What definitions are behind those acronyms?

BPO stands for Business Process Outsourcing. In this model outsourced service provider is managing operations according to contract and service level agreement. They are responsible for activities, but they are not identifying themselves with the company. BPO sector has a broad scope and can support various business units and functions.

The key difference between BPO and SSC is that Shared Service Center is insourced model which means that it is part of the corporation. Tasks and processes are performed using internal resources and those experts are sharing the same values as they are part of the company. Main processes handled by Share Services are in finance, human resources, and IT.

It is fair to say that Global Business Services is a matured version of Shared Services model. In today’s reality, world is constantly shrinking, and globalization is moving ahead every day, so “G” in GBS is crucial here. Managing of multiple separate internal supporting business units is not easy and not very efficient. If company would like to change it, and have all of them under one umbrella, GBS model is an answer how to do it.

What is the difference between Shared Service Center and Global Business Services?

The main distinction between Global Business Services and Service Shared Center is scale. GBS is established not to support business units for a single organization, but the end – to – end process flows and functions across the world. This complexity requires maturity and awareness of legal and cultural differences, language barriers and ways of working around the globe. Additionally, GBS organization is the guarantor of governance, locations, and business practices integration.

SSC is regarded as supporting function for business and is responsible for performing tasks and activities in the process. GBS Team has additional role of optimization driver and change ambassador across multiple business functions. Innovation, standardization, streamlining operations, efficiency improvements and cost reductions is in DNA of GBS organization.

Of course, Global Business Services might be more expensive than SSC, however in long – term plan, it gives company opportunity to have a Business Partner which will support organization to meet their strategic objectives.

Benefits of Global Business Services model

As we are familiar with Business Process Outsourcing, Shared Service Center, and Global Business Services definitions, let’s focus on benefits. During past decade we can observe that there has been an increased shift towards the GBS model. So, what is so special about this model and what kind of advantages it can bring into the company?

Main goals of every successful Global Business Services are driving scaled and cost-efficient delivery, increasing quality of provided service and governance across the corporation which lead to anticipated benefits like:

• Cost reduction – critical factor during decision making for GBS creation and further development of existing unit
• End – to – End process visibility and alignment – standardization of key business processes is a base for efficiency and improvement opportunities
• End – to – End process governance – safeguards that process improvement initiatives are in line with business objectives and strategies across the company
• Improved and streamlines process – best practices implementation throughout the entire organization and improving the processes are crucial to reach all goals and KPIs
• Agile and continuous improvement mindset – GBS function is much more flexible to adapt to global, region or country circumstances and are highly effective in achieving continuous operational excellence
• Corporation’s digitalization driver – GBS has a potential to be a leader for automation and digitalization due to their roots and role in organization
• Company’s growth initiatives supporter – although GBS do not bring profit per se, continuous process improvements might extensively impact other business areas as well
• Unified service experiences – singular face to the enterprise and fixed ways of working

Future of Global Business Services

What future will bring us, we never know, however we are able to predict what the future will require from us. Covid – 19 forced GBS organizations to find new ways of working, and push boundaries of innovation. What we thought was impossible, appeared possible. Future of GBS will be bright, if they will be able to support growth of the organization. GBS needs to focus on identifying opportunities for new services. The key trends on which GBS organization should focus on are:

1. Digital Transformation to increasingly leverage digital technologies like AI and automation to drive efficiency and innovation.
2. Strategic Role as successful GBS needs to evolve from supporting function to strategic powerhouse and aligns closely with business priorities and enables enterprise-wide change.
3. Flexibility and Resilience allows GBS be the answer on rapidly progressing business environment, adapt strategies and operating model in response to market shifts, technological advancements, regulatory changes, economic downturns, natural disasters, or global pandemics.
4. Remote Work as shift from “office” towards remote work and remote service delivery will continue which is influencing long-term location strategies and talent management.

Conclusion

There is no right answer on question which model is the best. There is no one – size – fits – all model for each company. Every model has it is pro and cons. As always in life, it depends on numerous variables. Every organization needs to analyse who they are, what support they requires, what is the goal of supporting function, how much investments they are open to make, how mature they are, what are their long – term plans and strategic goals, what services will be moved now and, in the future, and many more. After answering on all those questions, company leadership can decide which route is the best for their organization.