Taking Global Business Services (GBS) to the Next Level
Jack Welch once said “An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.”
According to recent studies by the Hackett Group, average and top performing organizations differ substantially in the benefits they derive from shared services. Top performers not only achieve cost savings; they also realize better quality service and sustainable performance optimization. GBS is emerging to be a strategic priority for any large enterprise integrating governance, business practices and locations both for shared services as well as outsourced functions. By delivering continuous improvements, they not only build a culture that enables and fosters excellence in customer service and quality of delivery, but also drive significant competitive advantage and become a key agent in the process innovation engine.
As opposed to expanding incrementally based on customer requests, it is important to create a strategic plan for their growth and expansion. The executives of several large GBS units are asking the following questions:
- What are the good practices followed by leading GBS organizations, are they relevant for us and how can we leverage them?
- How can I maximize my people productivity and best utilize my resources?
- How can I take my GBS organization to the next level? What kind of process improvements that I need to make? How could I deliver more strategic value to my organization?
Like all business units, the GBS team should have a clearly agreed and articulated overall vision. Several GBS units are designed to focus on short term goals of cost reduction and centralization of transactional processes – with some processes outsourced to third party vendors and some that are offshored. This typically represents the lowest level of maturity of the GBS unit and is therefore a very tactical approach leading to just short-term improvements. GBS units with higher levels of maturity, align their GBS roadmap with the overall organization’s strategic imperatives, and put together a phased wise plan to eventually deliver a new service delivery model and deliver transactional, transformational and cultural change initiatives. Like any business unit, the GBS constantly keeps an eye on some key performance dependencies on a continuous basis:
- Improving its consistency in terms of superior quality of service
- Continuously relooking at its operating structure and its leadership
- Skills assessment including inter cultural, technology and language skills
- Superior governance
- Adding value to business in terms of value added output.
Digital technologies are changing both the content and types of value add Then there are the new and more advanced technology drivers including RPA, language translation, OCR and other process automation tools like OCR, workflows etc. which have significant scope for accelerating time to deliver results.
Let us examine each of these elements in a little more detail:
Quality of Service: GBS needs to work very closely with its internal customers to drive customer satisfaction. Having mutual clarity and agreement on what constitutes reliability, quality and responsiveness from the GBS team, is crucial to ensure no gaps. Every team member in the GBS unit needs to understand and be aligned with the metrics and agreed objectives. New members will need to be oriented along these lines. Measurement of the results should be done more frequently to ensure that the teams react and change quickly to changing customer needs. Finally, the results, progress and plans should be clearly articulated to the internal customer management to ensure alignment and collaboration.
Operating Structure: The operating structure should facilitate agility and innovation. GBS teams should be able to deliver agile projects, launch minimum viable products to enable quick iterations and decision making. The operating structure should enable collaboration, and the ability to create and test it without the fear of failure. This requires providing of a standardized environment where the team has access to tools, common operating procedures etc. that makes the team more responsive. Integrating all the services into one operating structure could prove beneficial in the long run. For instance, the P2P process involves several hand overs as some work is done by procurement, some by accountants and some others from other members in finance. By bringing together the whole process into one group, enterprises could potentially benefit from running the process seamlessly, avoiding hand over across multiple functions. The entire team is thus responsible for delivering one common objective and will benefit from associated incentives.
Skills Assessment: Staff in the GBS units need global, more process and technology driven thinking. It is important to make an assessment to understand what skills people in the GBS currently possess, what is the maturity in terms of these skills in comparison to where they should be perhaps 6, 12 to 24 months down the line, and how to bridge the gap. Such an assessment should also include soft skills such as managerial, multi-cultural understanding and language skills as well as a good understanding of the business. This needs to be an ongoing activity based on how fast the GBS organization is growing. The next step is then to have an executable plan to bridge the gaps via on the job training or upskilling. Having invested in such training, many GSB teams struggle with high employee turnover that makes it difficult to ensure viability of such programs in the long run. Talent acquisition, talent management and talent development is therefore a constant investment that could prove expensive if not done in the right manner. Some organizations have developed a clear roadmap for their talent pool providing new opportunities through job rotation, town hall meetings and investment in building functional and leadership skills.
Governance: According to a KPMG research, GBS units rate their governance aspirations at 3.62 on a scale of 5 but their actual performance is only 2.52. A standardized approach to governance is imperative for GBS. Improving control and efficiencies mean having a very firm understanding of how the process is working including the dependencies and hand-offs. Such governance strategy should be aligned with the overall strategy, while ensuring minimal delays or bureaucracy. Finally, alignment of mid and senior management to ensure buy-in and execution, together with facilitating its importance and understanding amongst teams is crucial.
Value Added Output: From just an internal service provider, GBS must focus on how they could be a strategic partner to business. Their performance metric could include scorecards that measure financial contributions to the company, value creation and service levels. Such value-added services would require the GBS unit not only to run existing processes efficiently, but to anticipate what will happen in the future so that they could respond quickly. Examples of this could perhaps include being a center of excellence for any change management initiatives within the organization. By leveraging design thinking coupled with digital technologies, the GBS organization could be the torch bearer for driving key process innovation and related initiatives.
GBS does matter and is a critical differentiator for creating a unique competitive advantage. The overall vision, delivery and governance structure needs to change with time. Embedding the voice of the customer strongly within the GBS business unit and ensuring an operating structure that allows the GBS to respond quickly to changes, is important to driving results. Likewise, leveraging new digital platforms to accelerate the pace to change and embracing talent development is crucial.
As a famous quote goes, “You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.” Like all parts of the business, the GBS team should also be able to proactively anticipate customer requirements based on a strong understanding of the business to be able to drive the change from the front.