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Global business services or GBS–it’s a term that’s come to mean different things to different people. But to really understand what it means, let’s traverse a brief history.
Corporate and branch offices dot the map: Yes, this was a time when the focus was purely growth-driven, and companies believed it was prudent to have local management and local support functions. When business needed scale, the answer seemed simple– local hiring or staff augmentation.
Enter shared services: To simplify operations, companies invested in centralisation. Functions like IT (and sometimes finance and accounting or HR) were managed regionally in a shared services approach.
Then came the global customer, corporate governance and need for compliance: Customers demanded the same experience, irrespective of region or function. So, companies turned to standardisation. For the longest time, this meant ERP and little else.
Somewhere along the way, the business environment changed rapidly as well–the priority shifted from pure growth to efficiency, effectiveness and profitability. Supply chain heads wanted product visibility, HR heads wanted accurate region-wise headcount and compliance officers got more demanding with each quarter. Sarbanes-Oxley and Dodd-Frank did not make it any easier.
Consequently shared services organisations started focusing on optimising their processes. This included implementing lean practices and Six Sigma with better tracking of metrics and SLAs.
Finally, the last step in the journey to further reduce costs and adopt a global delivery model was the use of outsourcing. As companies charted their course from centralisation to global delivery, they saw the potential to take shared services and outsourcing to the next level by blending them to create a truly transformational entity–global business services.
Which brings us to the heart of what global business services actually is–a source of simplicity, agility, innovation and scalability that companies need, so they can differentiate their services and create competitive advantage that companies need in today’s hypercompetitive business environment. Simply put, a GBS must deliver:
• Responsiveness to business needs across the globe, for each business unit and not just corporate functions
• Business innovation and transformation without losing sight of cost efficiencies
• Seamless operations across an ecosystem of vendor partners, captive centres, employees and other stakeholders
But how exactly should GBS organisations go about fulfilling the above mandates? Drawing from my experience of working with many Global 2000 enterprises to chart and implement their GBS vision, here are 10 secrets for a successful GBS organisation.
1. Instill a powerful leader at the helm. This person needs to be a catalyst of change. In many companies, we’re seeing CIOs take on this responsibility–since they can link technology and business while managing varied expectations. As we see the permeation of platforms, it requires the GBS leader to work very closely with business, IT and operations teams to manage large structural changes. Imagine a move to a platform-based service for HR on a hosted Oracle platform.
2. Have a strong governance model and invest in talent management.
3. Have a structure that allows evangelisation of service lines to individual lines of business.
4. Have a pricing model that is not difficult to implement. This requires deep understanding of global delivery models, including onshore, near-shore and offshore delivery.
5. Have a clear services portfolio with a lucid value proposition. Start by considering that GBS organisations should work closely with outsourcing and technology partners and not compete with them.
6. Embrace benchmarking, and understand what leading organisations are doing where it relates to efficiency or effectiveness. To do so, GBS leaders need to leverage analytics. They also need to continuously improve their operations and metrics, and at the same time, evaluate technology opportunities that eliminate work altogether. Robotic automation may be the flavour of the month, but the reality is that overall process automation and interconnectivity (the Internet of Things) will have a much greater impact on how companies perform core activities.
7. Manage SLAs, metrics, and business outcomes internally and with partners. It is also important to understand what metrics should be tracked as KPIs and as SLAs.
8. Redefine cost structures. Companies today are partnering with service providers to co-create solutions for that industry vertical or geography. Whether it is a niche distribution solution for a consumer goods company in the emerging market or a platform for managing the supply chain for an agri-business.
9. Have a strong transition team, along with a core team to manage organisational change. It is also important to have strong partnerships with legal, finance and tax. For example, a solution for Brazil delivered from Philippines might seem very compelling until one finds out about tax implications/liability.
10. Be open to change. Priorities change, whether triggered by a change in leadership or new strategies to manage cost, compliance or talent. But with an appetite for new ideas and processes that are flexible enough, change doesn’t need to be unwelcome.
- By Aniket Maindarkar, Head – Americas Operations, Infosys BPO