Lessons from early adopters of global business services Bookmark has been added
Lessons from early adopters of global business services
Is your approach to GBS enough?
Remember when global business services (GBS) was the hot new thing? From its beginning, it was defined as “the future of all operating models”—an integrated, seamless network of back—and middle-office functions that deliver critical business services centrally. That was only a few years ago but early leaders in GBS are far enough along to make a clear-eyed assessment of what they’ve achieved with GBS, where they may be at risk of falling short, and why—and we can learn from their experiences.
- Is our approach to GBS enough?
- Setting the tone
- Laying the foundation
- Unlocking value
- Applying the framework
Three categories of early leaders in GBS
Broadly speaking, these organizations fit into these categories:
- “We only got as far as shared services!” These companies made significant progress by establishing shared services capabilities, but stopped short of pursuing GBS.
- “We tried—but we fell short.” These companies had lofty ambitions for GBS, but were hamstrung by a number of obstacles, ultimately abandoning their bids for GBS.
- “We’ve found a different model that works for us.” Companies in this category preserved many of the aspects of GBS most relevant to their business, but don’t adhere to any hard-and-fast GBS rules.
What about all the companies that signed on for GBS and have achieved their goals? In reality, there are precious few companies that belong in this category. Even among leaders, most are still not operating in a true GBS environment. They have many of the hallmarks of the original GBS vision in place—but not enough to claim outright victory in their quest for GBS success. In this article, we’ll take a closer look at exactly which practices they are adopting to achieve the true vision of GBS—so that you may more clearly map out your own organization’s path to GBS value.
Ten winning practices that set GBS leaders apart from the pack
Just as there are clear warning signs for GBS initiatives that may be in trouble, we have identified several practices—ten, to be precise—that have delivered incremental, sustainable value from GBS for our clients. These practices fall into three broad categories:
- Setting the tone: Strong leadership with clear objectives and alignment with broader organizational goals.
- Laying the foundation: The governance, structure, and process design required to support a flexible, influential GBS organization.
- Unlocking value: Radical transformation that unlocks real, measurable business value.
How do you bring these imperatives to life in your organization? You can do it by implementing the practices that follow.
Setting the tone
To find disruptive leaders, look beyond the expected
What type of person is the right fit for an aggressive GBS organization? For answers, look beyond the expected. The most successful GBS leaders tend to be those with vision, grit, and a business background (often sales and marketing) that may not be an obvious match at first. In one company, for example, the GBS leader is a former salesperson for the organization who understands the underlying politics at work, and is a powerful, vocal advocate for the GBS mandate and how to sell it. Recruit a leader that knows what it’s like to have a seat at the table, then provide that person with incentives to push the envelope (by way of accelerated timelines and increased savings realization, for example) and fight for turf (such as new scope and heightened capabilities development).
Indoctrinate the brand and culture
Whether the GBS organization has a brand is not really a question: It does. The real question is whether it’s a brand that you’ve cultivated, or one that just bubbled up from the wide-ranging perceptions of people in the organization. If it’s the latter, you’re taking a risk. The GBS brand should aim to drive change and inspire loyalty among its internal consumers. Lead with the customer experience—and track perceptions and feedback regularly along the way so your brand promise remains strong and compelling.
Build a peer—not a cost center
A strong GBS function should operate as the peer of the organizational units it serves—not a subservient cost center. Make sure its organizational structure complements those of the business units, with titles and roles that make sense outside of the GBS organization. Using such an approach, many leading GBS organizations have grown to be perceived as a destination for talent.
Laying the foundation
Run it like a business
In some organizations, GBS is viewed as a cost center—and it’s often run like one, too. But what if GBS were run more like a business, with metrics guiding accountability, governance structures in place to guide decision making in line with broader business strategies, and clear objectives that match those strategies? That’s the model GBS leaders are putting in place today. At first, secure a CEO mandate declaring GBS’s strategic importance to the business. Then track GBS performance like a business unit, with business-relevant metrics such as increased cash flow, higher overall customer satisfaction, decreased timelines, and operating expense improvements. Traditional SLA metrics will always be important, but these serve a very different purpose than this GBS value imperative.
Implement cross-functional structures
The people in your organization will expect seamless processes, frictionless handoffs, and business insights that span a range of functions. How will you deliver? Certainly not with processes, tools, and capabilities that are bound by the traditional borders of business units. Shared platforms, structures, and even workspaces are critical aspects for advancing the GBS vision of cross-functional value. Incentivize sharing, even consider managing a portfolio of crossfunctional projects to jump start sharing, then look to build end-to-end processes and common governance tools.
Cultivate tomorrow’s talent
Think about the talent you’ll need to have in place over the next few years in order to achieve your goals for GBS. Now look at your current roster of talent. Leaders will often admit that their current talent profile doesn’t match bold goals for the future. But it’s possible to get there. Start with hiring and development that is capability-focused, talent models that integrate process technicians and data miners with functional subject matter experts, and structures that support millennial talent (e.g., rotational programs into and out of GBS).
Design for operational agility
GBS leaders know that the businesses they support are changing all the time. Can the GBS organization change quickly enough to keep pace? Doing so requires services and processes that are designed for flexibility. Many leaders find that specialized “SWAT” teams can be instrumental in accelerating transformations and ensuring excellence. For each new process design, include a “flexibility” rating that limits rigidity. At the same time, cultivate “SWAT” capabilities in a central team that you can deploy as needed to spearhead and accelerate the most difficult complex transformations (such as M&A or technology-driven transformations).
Measure what matters
GBS attempts to accomplish things that were outside the purview of more traditional shared services organizations—things like improved customer satisfaction. But if you’re not measuring outcomes in such areas, the GBS organization is flying blind. Work to improve scorecards, measure beyond mere cost savings, and embed these measurements into performance reviews. Start small, identifying one or two key metrics that quantitatively measure value delivered to the business beyond cost savings (such as reduced cycle times, increased cash flow, higher business adoption rates) and be prepared to pivot on these measures as business priorities change.
Lead the digital revolution
The entire business is looking for ways to go digital. Why shouldn’t the GBS organization lead the way? In many ways, it’s perfectly matched to digital capabilities. Focus on centralizing to enable future automation using digital capabilities such as robotic process automation and cognitive computing, on the way to lights-off processes. Become an incubator for testing new technologies—but don’t lose sight of your responsibility to “run it like a business.” In other words, understand the quantifiable costs and benefits of the technology and build a business case whenever possible.
Push for data-driven capabilities
Data doesn’t recognize business boundaries. So focus on building capabilities and services that are function-agnostic, consulting and advising with the business to develop enterprise assets—like analytics—in any part of the business that needs them. Set a vision that makes use of your organization’s greatest resources, which likely include data aggregation and process expertise. Leverage these capabilities to draw data-driven insights that could unlock future opportunities for the business.
Applying the framework
In our experience, all ten of these practices should be in place at some level for an organization to realize the full potential of GBS. At the same time, however, every company’s goals are different. Some are just getting on the path to GBS—and therefore may need to focus more on activities such as securing the CEO’s support, getting a strong leadership team in place, and developing the business case. For others further along in their journey, implementing strong measurement capabilities and focusing on the next generation of talent may be more pressing activities. So view these ten practices through the lens of your organization’s specific goals, dialing some up and some down on your way to achieving outcomes in line with broader organizational strategies.
If that sounds daunting, it shouldn’t be. These practices are entirely within reach for companies that are on the path to GBS—and they’re worth the effort. It just requires focus, vision, and often a little help from those who have been there before. To learn more, let's talk.