There are many benefits for service-delivery organizations that embrace global business services (GBS), a next-generation operational and organizational model for enterprises to deliver business processes such as HR, finance, IT, and customer care to internal and external customers, using outsourcing, shared services and, increasingly, cloud solutions.
Those that climb the ladder toward greater GBS maturity can achieve benefits that range from low-hanging-fruit efficiencies to transactional and analytical capabilities that add long-term, strategic value to the business. In addition to reducing costs and getting to market faster, GBS can help companies drive process excellence; unlock the power of data and analytics; enable excellence and consistency in the customer experience; build an internal repository of high-quality talent; establish a consistent brand experience; and accelerate time to benefit from mergers and acquisitions.
Getting there, however, is easier said than done. “I’d say a majority of clients are already somewhere down the GBS path,” says Bob Cecil, principal KPMG US’s Shared Services and Outsourcing Advisory practice. “They have typically done something such as building off an initial regional and functional shared services and started to bring other functions and regions into the business service model,” he says, adding that they have undertaken some easy cost take-out with offshoring and outsourcing. “Now, they are faced with ‘how do I continue to add value’ in the face of changing business conditions,” he explains. “It is more complex, requiring a higher level of capability and agility.”
While more executives today are recognizing the potential benefits of a well-managed GBS organization, most are struggling to solve complex and pressing challenges on the road to maturity. With so much in motion and so many decisions to make so quickly, how can organizations advance their GBS maturity without getting distracted, worn down, or derailed?
These are several areas that have emerged as critical levers in the drive towards GBS maturity:
1. Driving end-to-end process ownership
End-to-end process management entails having a single global process owner for each process in scope. That professional holds ultimate accountability and responsibility for process design, and master data, technology platform, and service delivery model definition.
Global, end-to-end process ownership is one of the most critical enablers of GBS success. When a single global owner is in charge of each process, companies can gain the benefits of end-to-end management, even in complex environments that include shared services, outsourcing, and retained organization operations.
2. Implementing intelligent automation
The convergence of robotic process automation (RPA), machine learning, cognitive platforms and advanced analytics represents the most disruptive force since the Industrial Revolution. Between now and 2025, up to two-thirds of the $9 trillion knowledge worker marketplace may be affected.
With huge potential benefits including cost reduction, faster payback and vast changes in the nature of labor, it’s no surprise that RPA and artificial intelligence are big buzzwords in the GBS space, since it can offer value that is particularly effective in a GBS environment that seeks to disrupt a traditional offshore model of pure labor arbitrage — driving automation from more basic business processes all way up to cognitive AI learning.
3. Boosting talent management
Attracting, retaining, and managing skilled talent will be the number one concern facing most global companies for the foreseeable future, according to a recent KPMG study. GBS organizations feel the talent challenge especially acutely. As the demand for GBS grows, and the nature of its services moves from transactional to insight-driven and analytical, the skills needed are harder to find in the marketplace, and harder to scale.
To attract and develop the right talent, GBS organizations must invest in centers of excellence (COE) and high-value services, as well as create incubators for value-added services. They must also be proactive in hiring to get the right skills; think differently about employee value propositions; and overhaul workforce planning. New reward and recognition systems may also help, as will opportunities to get involved in new service development.
4. Improving technology integration
Information technology (IT) is a key enabler of GBS success and maturity. IT is almost never at the front end of GBS. GBS is destined to underachieve, or even fail, unless the IT component is enabled and integrated across the enterprise.
All business processes and the outcomes they produce are underpinned and enabled by the technology that runs them. To be successful, mature GBS organizations require a cohesive IT model that provides the framework, architecture, and standards that GBS technologies work within, while accounting for the solution sets and tools driven by GBS.
5. Embracing enterprise service management (ESM)
As GBS organizations move toward higher maturity levels, the focus shifts from efficiently governing a single or multiple disparate delivery channels to effectively governing services and solutions integration to drive increasing value to the business. Given that the complexity and cross-functional integration begs for a better sense of order, ESM must be instituted as a foundational element of GBS governance.
Essentially, ESM is a formal operating model where corporate services are designed, sourced, delivered, and managed within a common framework. ESM transcends the typical functional boundaries and silos inside an enterprise, enabling the desired business outcome through end-to-end process delivery. It eliminates duplicate and disparate service management capabilities, and strives to ensure that GBS consumers experience a consistent, constructive service experience.
6. Executing a master data management strategy
Accurate and accessible master data is a foundational element in any GBS. It can make analysis and reporting faster, simpler and, most importantly, more accurate, and therefore more trusted and useful. By cleaning and ensuring the integrity of its master data, a GBS organization can maintain a clear view of its operations and drive tangible benefits such as increased cost savings.
The successful execution of a comprehensive, firm-wide master data management (MDM) strategy is critical both to capitalize on potential big data opportunities and to successfully drive greater GBS maturity. Without a sound and strong MDM strategy and MDM capabilities, most companies will find that the data available to them is incomplete, inconsistent, inaccurate, and/or late, all of which will serve to undermine and limit their business intelligence and decision-making ability.
The Future of GBS Maturity
In the future, GBS will still be in a state of flux. With continuing acquisitions and mergers, the business environment is always changing, says Cecil. Certainly the mix will change toward automation, he explains — that is, being able to take out more of the organization’s subjective activities and put it into an automated form — but it will always be work in progress.
“You to have a corpus of knowledge, the standards and operating procedures in place for some of these technologies to take hold,” he says. “The reality is that most GBS organizations remain pretty far away from that, particularly on the data and analytics side of things.” Even the most mature organizations will continue to do the foundational work, he adds: “As they build out their process standards and data sets, they can begin to overlay other technologies on top of that and reap the benefits of both productivity as well as insights.”