The Signposts to Smarter Operations Point to Global Business Services
By Sue Danino, Partner
Shared services and outsourcing have become such common operating models that the majority of large enterprises use some combination of both, often times with many different internal and external service providers dispersed across business units and individual functions. And, while the increase in adoption rates shows that these operating models continue to prove their cost effectiveness, the lack of coordination and integration across disparate service towers hinders the potential of their transformational value.
In addition, enterprises must figure out how to select, deploy and integrate emerging technologies for the greater good of the business across this increasingly disaggregated sourcing complex. The multi-sourcing environment and the rapid proliferation of technology pose significant impediments to organizations as they strive to reduce costs, improve performance and maintain or create competitive advantage.
Enter Global Business Services (GBS), a model that integrates governance and business practices for shared services and outsourcing activities across an entire enterprise. GBS comprises not only the delivery of services to fulfill demand, but also the operational, tactical and strategic functions that manage the interactions between supply and demand to ensure integration and oversight of all business operations, including IT. Depending on its stage in the transformation journey, a company that implements a GBS model can achieve significant run-rate savings of up to 30-50 percent.
Here are the Top 5 ways to benefit from a GBS strategy:
- Coordinate all of the moving parts. GBS is broader and more comprehensive than the narrower focuses of shared services and outsourcing strategies. GBS creates a common governance framework to manage all internal and external providers and encourages collaboration among internal functions as well as between internal functions and third-party service providers, ultimately aligning all parties to the wider corporate objectives. By design, each function within the GBS model is engaged and accountable to actively contribute to the greater, strategic capabilities that drive desired business outcomes.
- Create end-to-end, harmonized process ownership. In a process-centric, “as a service environment,” the old tower approach to optimization no longer optimizes business demands. When a large enterprise faces the challenge of coordinating and managing a number of autonomous business units and regions with disparate processes and systems, the failures—and even the less-than-perfect successes—can ripple extensively throughout global systems and undermine the business case or important compliance initiatives. GBS integrates functional towers and goals to simplify operations and reduce costs, thereby mitigating the risks associated with a fractured model.
- Focus on delivering tangible business value for internal and external customers. A well-executed GBS model hinges on clear requirements for managing sourcing, performance, quality and cost on a global scale. By aligning the operating model to an organization’s long-term strategy rather than merely striving for cost reduction and transaction processing, GBS provides a transformational approach that ensures all services across the organization are integrated—now and as the organization changes over time. GBS implements a framework wherein structured executive involvement, formal chartering and metrics, and governance support the operational capabilities that deliver distinct marketplace advantages.
- Manage demand to meet business requirements. By providing a structured and integrated portfolio of services, developing demand management processes and defining a clear service delivery strategy, GBS can more effectively manage supply and demand to increase productivity and improve customer satisfaction. The GBS model also provides a model for repeatable and scalable operations.
- Leverage tools and technology to enable the business. While many enterprises are utilizing technology and implementing transactional automation and self-service tools, GBS helps leading organizations weave together the right mix of cloud-based services, robotic process automation (RPA), analytics and knowledge management to efficiently execute against their business goals. GBS integrates business process and IT processes to provide enterprises the structure they need to take full advantage of technology as an enabler of operational excellence.
Getting started with a quick assessment to determine the opportunities and next steps can be very effective as companies think through their future plans and “size the prize.” ISG helps organizations assess their need for Global Business Services and design a framework customized to meet those needs. Please contact me to discuss how we can help your organization.
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