Developments driving the Global Business Services market

Over the past years, many corporates have been professionalising their BPO and SSC environments through the establishment of Global Business Services. Marja van den Tweel, partner at Quintop and expert on the matter, outlines some of the main factors driving the growing popularity of Global Business Services.

Global Business Services (GBS) is the evolution of Shared Services Centers (SSC) and Business Process Outsourcing (BPO) into a more holistic, and cross-functional setup that focuses on process efficiency improvement, service quality and cost reduction.

While Global Business Services come in many shapes, sizes, and flavours (global versus regional; onshore, nearshore, and offshore services; in-house and outsourced), they typically bring together multiple support functions such as finance, procurement, technology, human resources and facilities under one streamlined roof.

Facing an ever-growing need to operate agile and efficiently, corporates are increasingly turning to Global Business Services as a means to improve employee or user experience, enhance productivity or to accelerate business insights.

An industry worth according to one estimate around $620 billion, the market Global Business Services is growing fast. In the coming years, double-digit growth is expected for the sector, driven by trends and developments including:

1) Cross-functional optimisation

In a support function, it is tempting to only optimise within the silo and stop at the points where a process is handed over to another department. The focus of that function is then on its own added value and its own operational improvements.

However, because GBS works across functions, a structural shift can take place towards end-to-end processes and journeys. As a result, organisations are cashing in on opportunities that were previously missed.

For example, where an HR SSC was successful in reducing costs for the HR administration and payroll input only, in a GBS environment there is room to build a broader business case with IT and Finance to improve the processes end-to-end for the benefit of the company as a whole.

By agreeing on a joint GBS roadmap across functions, plans and investments are made based on wider business objectives. This is an accelerator for the company’s supporting functions. True end-to-end process improvements require a broader view on developing ideas and implementing solutions rather than just looking within a silo. And that is precisely what GBS is about: spotting, analysing, and exploiting these collective opportunities for the organisation.

2) Deploying intelligent automation

Cloud solutions have brought a lot to the world of shared services and business process automation. However, organisations find that the many tools available make it more difficult to keep things simple and make processes transparent.

GBS gives direction and accelerates automation by integrally designing smart processes. Under central governance, strategic priorities are translated into an automation roadmap. This prevents an organisation from having increasingly fragmented processes and tools.

The most commonly deployed automation technologies are system integrations, workflows, digital forms and approvals/e-signatures, robotic process automation (for repetitive tasks) and digital document management (including storage and retention).

GBS is also committed to developing a digital corporate culture, as well as how employees collaborate within the organisation. Based on the broader organisational strategy, GBS is able to make better long-term investment decisions. This means that the chosen technology or automation solutions can yield a higher ‘return on investment’ and achieve greater organisational buy-in.

3) Higher productivity and lower costs

In the past decade, companies improved productivity by centralising services into an SSC or outsourcing to a BPO partner. In parallel, work was transferred to low-cost countries in Eastern Europe or Asia. Savings were achieved because of centralisation and lower labour costs.

Organisations moving from an SSC or BPO model to a GBS model find that, even before making this transition, their costs are already low.

Yet the added value of having an organisational GBS strategy goes beyond centralisation and labour arbitrage. With a focus on the broader business objectives, GBS is able to contribute to the organisation’s productivity and cost savings at another level – bringing the already-present drive for efficiency of SSC and BPO models to the level of company added value.

A key reason for this is the broader perspective of GBS – by looking across the supporting functions, it helps uncover sources of inefficiency that were previously hidden. As a result, process improvements done within a GBS organisation have the potential to achieve even higher productivity and lower costs.

4) Virtual teams ‘in the mix’

The Covid-19 pandemic has demonstrated that working in virtual teams can be an excellent alternative to working physically in one location. With the accelerated development of online collaboration tools, virtual collaboration is here to stay.

For the development of GBS, this is a huge opportunity. In the perfect mix of onshore, nearshore, and offshore services, virtual teams are going to contribute to the expansion of capabilities and the continuity of service delivery. But above all, it means that location no longer needs to be a limiting factor in recruiting the best talent for GBS.

5) Data insights

Another great part of the added value GBS provides is owed to the collection and analysis of digital data. GBS is strengthening the organisation’s access to digital data, because the GBS data team collects data needed by the company. The speed of almost real-time insights, reports, and dashboards from raw data offers great business value for the company, enabling leadership to make more accurate and proactive business decisions.

Furthermore, by bringing together the competence of the different supporting functions comprised under GBS, digital capabilities are jointly developed. As such, the development of data tools and analytics skills is gaining increasingly more power in the GBS setting.

6) Professionalised governance

With a GBS model, organisations are building a true governance organisation in which analysis, partner selection and service delivery decisions are brought together. In a developed GBS organisation, the GBS governance team is of a senior level so that influence can be exercised to all stakeholders. This means an immense strengthening of internal competence with respect to alignment on business needs, the building of sourcing strategies and executing these strategies.

In addition, methodologies for transitions, change and communication across the organisation are standardised and professionalised.

GBS ensures better decision-making and service delivery management for supporting functions such as Finance, IT and HR, through the continuous alignment of initiatives with the strategic objectives of the organisation. An improvement especially when compared to a situation in which each function was doing their own thing.