Changes in the cost-benefit equation—driven by new technology and an evolving labor market—are altering the way clients think about how and where they deliver services. As companies rethink what's core to their businesses, they are focusing more on the changing technology, data and talent landscape. This means automation and upskilling play bigger roles in the modern framework for Global Business Services (GBS) or operating model solutions for non-core and core activities.
As organizations have matured, we have seen a move from siloed functional shared services or outsourcing, to today’s more holistic end-to-end process lifecycle. The rise of digitalization enables GBS to provide value-added benefits that are as important as lower costs. Centers can incorporate automation, visualization, analytics, and other digital tools to develop more effective ways to support the business units. Where technology can automate low-complexity activities, there is an opportunity to retrain and refocus your people on more value added areas. GBS has become a business partner, rather than simply a transactional processing center.
But, if you are to bring your strategy to life and provide a good return on your investment, you’ll need to stay focused on your shared values and purpose, keeping your people and culture at the heart of changes.
“At the end of the day, it comes down to three key concepts: partnering to bring the right value proposition; upskilling to focus on more value-added areas; and flexibility that enhances the employee experience.”
Our team is uniquely positioned to work hand in hand with clients to support their Global Business Services journey by bringing operational, functional and technical expertise to each transformation, from strategy through execution.
The following are key capabilities to accelerate your organization’s service delivery transformation at every phase. Your approach will depend on whether you plan to outsource to an external party or create captive shared services within a lower-cost area. Here’s a closer look:
COVID has shattered antiquated perceptions of what activities need to be performed side by side in an office and what can be performed effectively in a remote or centralized location. GBS organizations emerged from the past year more agile than ever before and a greater partner to the business.
This study is the sixth in a series of publications produced every two years. The survey on which the study is based was conducted from November 2020 to January 2021, and included companies throughout the world and from a wide variety of industries. The results cover more than 300 shared service centers, enabling us to provide a comprehensive overview of the status quo, current developments, existing challenges and upcoming challenges. The study also covers the implications of these issues on strategy and vision, organization and governance, processes, technology and data, and people and culture, as well as providing an outlook on upcoming key trends and further developments in shared service centers.
Here’s where you’ll need to assess the right strategic approach, which will involve collecting and validating current time and cost data to help build your business case and guide your decision-making. Evaluate what operating models work best for your organization, including alternatives, such as automation, captive shared services, outsourcing or a hybrid of these options.
Now that you have defined a strategy, it’s time to construct the structure of your future organization. Regardless of which operating model you chose for the future state, you will need to develop process maps and a detailed organization model. Perform due diligence on the location or outsource provider, and develop an implementation plan that includes a communications strategy to continually engage with key stakeholders through your organization’s transformation.
Once your future state is designed, you will need to operationalize and build out the facilities, IT and other infrastructure. For both outsourcing and shared services, it will also be critical to create a governance and performance strategy to share important details of the project, including severance, retention, relocation and rebadging.
The work you put into your strategy will drive the implementation. Under a shared services model, this will involve executing your transition plan, including standing up the new captive shared service center, onboarding key talent and making sure measures are in place to capture and transfer their knowledge. Not everything about your organization will go away, so it will also be critical to implement the service levels and performance management frameworks that your organization decides to keep. If you’re outsourcing, many of these measures will apply and it will be important as you transition services to the provider(s).
Your approach will be different for phases #3 and #4 if you’re planning to outsource your capabilities: Consider defining the scope, service levels and assets you plan to transfer. Conduct due diligence on service providers/vendors and strategically negotiate the contracts before awarding RFPs to service providers and developing an implementation strategy.
Your journey doesn’t end after implementing. There’s more to learn, and in this phase you should track, monitor and proactively manage GBS performance and resolve issues. This could include reassessing shared services and outsourcing relationships, reviewing service delivery and managing ongoing initiatives to improve your organization. For organizations that are outsourcing, this is where you should plan how you’ll renegotiate contracts, assess renewal options or consider a contract exit.