Financial constraints, market instability, and interconnected value chains have compelled organizations to professionalize their support functions, giving rise to Global Business Services (GBS). With over 10,000 centers worldwide, particularly concentrated in India, China, Romania, Poland, Hungary, and Brazil, GBS has become a global phenomenon.
During the pandemic, these support functions faced a litmus test, successfully pivoting to remote operations. Their impressive resilience throughout lockdowns and beyond has reinforced their strengths, stability, confidence, and self-perception. The pandemic acted as a catalyst, pushing the market to adopt sustainable trends, especially in technology-driven disruptions, providing reliable solutions during similar crises. As per a recent BCG report, the GBS ecosystem has matured with immense growth potential, projected to reach USD 2.5 trillion by 2025, up from USD 1.8 trillion in 2022.
Thriving Amidst the Ever-Changing Global Business Landscape
To successfully navigate this evolving landscape, GBS organizations and leaders must analyze their strengths and identify areas where their competencies may no longer align with changing trends and demands. It is vital to build a robust digital foundation, prioritize data transparency, advanced services, and establish an agile enterprise setup. By embracing the opportunities presented by GBS and proactively adapting to market dynamics, organizations can thrive in the ever-changing global business environment.
In order to embark on the future roadmap successfully, GBS organizations and leaders need the following strategies to navigate the evolving landscape effectively:
Alter Strategies: GBS organizations need to adapt their strategies to align with the changing market dynamics and evolving customer demands. This may involve reassessing target markets, exploring new service offerings, or adopting innovative business models.
Drive Digitalization: Embracing digital transformation is essential for GBS organizations. They must leverage emerging technologies, such as automation, artificial intelligence, and analytics, to enhance operational efficiency, improve customer experience, and drive innovation.
Strengthen Capabilities: GBS organizations should continually enhance their capabilities to support new advanced scopes of work. This may involve upskilling the workforce, fostering a culture of continuous learning, and investing in emerging skill sets like data analytics, cybersecurity, and process optimization.
Build a Flexible and Resilient Global Network: Establishing a flexible and resilient global network is crucial to mitigate risks and leverage diverse talent pools. GBS organizations should strategically evaluate their location strategy, explore partnerships, and establish centers of excellence in key regions.
Change Management: Successful implementation of GBS initiatives requires effective change management. Organizations must prioritize change communication, engage stakeholders, and provide the necessary training and support to facilitate a smooth transition.
Periodic Governance: Governance remains a prerequisite for GBS organizations. They must establish robust governance frameworks to ensure compliance, risk management, and performance monitoring. Periodic reviews and adjustments will enable continuous improvement and alignment with organizational goals.
By embracing these takeaways, GBS organizations and leaders can proactively shape their future roadmap, capitalize on emerging opportunities, and navigate the dynamic landscape with confidence and success.
Future Trends and Service Models
As Global Business Services (GBS) organizations navigate the future, they must address several challenges and adapt to emerging trends and service models. The following points highlight the key challenges ahead:
Advanced Scope of Work: GBS organizations currently handle transactional and low to medium analytical or conceptual activities. However, in the coming years, there will be a shift towards advanced conceptual tasks, business partnering (e.g., for FP&A), and a focus on advanced insights and analytics. GBS must prepare to provide these top services to meet evolving client demands.
Transformational Approach: Technology disruption will continue to drive end-to-end process transformation in GBS. Leveraging advanced tools and technologies such as machine learning (ML) and artificial intelligence (AI) will be crucial. Data transparency and analytics will become core areas for enterprise governance, with the key challenge being the conversion of data into actionable insights. For example, utilizing ML to improve forecasting accuracy and cycle time, providing faster actionable insights.
Reorienting Workforce: GBS organizations need to reskill their workforce, fostering flexibility and a "self-starter" mindset. This includes augmenting skillsets in analytics and digital technologies. Investing in creating in-house training programs will be essential to upskill employees and adapt to changing demands.
Future-Oriented Operating Model: Instead of providing the entire range of services internally, GBS may adopt a managing agent approach, partnering strategically with delivery functions and other suppliers. This operating model allows GBS to retain responsibility for delivery while integrating competencies from strategic providers where necessary.
Addressing these challenges and embracing future trends and service models will be critical for GBS organizations to stay ahead in an ever-evolving business landscape. By adapting their scope of work, leveraging transformative technologies, reorienting the workforce, and adopting innovative operating models, GBS can position themselves for sustained success in the future.
Recommended Approach: Seamless Transition and Effective Governance for Success
To ensure a successful transition and maximize the benefits of Global Business Services (GBS), organizations must adopt a well-planned approach and implement effective governance. This section outlines key recommendations to achieve a seamless transition and minimize disruptions.
Phase-wise Toll Gated Process Transition: Transitioning processes in phases minimizes disruption to the business. Starting with transactional processes like Accounts Receivables (AR) and Accounts Payable (AP), followed by Record to Report (RTR) and Financial Planning & Analysis (FP&A), ensures a controlled and smooth transition.
Strong and Defined Governance: Establishing a robust governance framework fosters effective communication between the client and service provider's teams. Regular periodic governance meetings enable transparency, alignment of expectations, and proactive issue resolution.
Comprehensive Risk & Mitigation Planning: Conduct thorough risk assessments and develop a comprehensive risk mitigation plan. Identifying potential risks and implementing proactive measures minimizes disruptions during the transition.
Effective Change Management: Implementing an effective change management strategy is crucial for zero disruptions in business operations. Collaborative efforts between the client and service provider teams, leveraging their expertise and experience, ensure a smooth transition.
By adopting this approach, organizations can navigate the transition smoothly, mitigate risks, and ensure a successful transformation through GBS.
Implementation Strategies for Seamless GBS Transition
To ensure a successful transition to Global Business Services (GBS) with minimal disruptions, organizations should implement the following strategies. Firstly, a phased toll-gated process transition approach should be adopted, incorporating essential stages such as Transition Analysis, Knowledge Capture & Documentation, Knowledge Transfer, Ramp-up, and Stabilization to Steady State. Secondly, a strong and defined governance structure should be established to facilitate effective communication and prevent surprises. This includes a three-tier governance model involving Process Subject Matter Experts (SMEs), project owners, and business heads. Additionally, comprehensive risk and mitigation planning should be conducted, addressing potential challenges across transition, governance, process and technology, and people/business domains. Lastly, an effective change management plan should be implemented, encompassing leadership engagement, development, measurement, and cultural and behavioral evolution. These implementation strategies help organizations achieve a seamless transition to GBS, ensuring operational excellence and minimal disruptions.
Embracing the Future: Key Takeaways for GBS Success
In the face of the pandemic crisis, Global Business Services (GBS) have proven to be a vital pillar of organizational resilience. To successfully embark on the future roadmap, GBS organizations and leaders must consider altering strategies, driving digitalization, strengthening capabilities to support advanced scope of work, and continuing to build a flexible and resilient global network. By embracing these principles, GBS can adapt to changing market dynamics, enhance operational efficiencies, and deliver exceptional value to their clients.