In this new era, shared services are taking a leap towards a hybrid model called global business services. Organizations are skipping the single-function concept and pursuing multi-function SSCs at the start of their shared services journey. The potential benefits of moving straight to a GBS model include shared methods and tools, lower costs through optimized labor pools, a shared governance structure and improved controls. The hybrid or the GBS model certainly calls for an increased number of functions or processes being managed at the multifunction SSC.
Single mass transactional processes like Accounts Payable, Accounts Receivable and Travel Expenses are still in focus. Nevertheless, more complex processes like controlling, intercompany accounting, taxes and customer services are becoming more important in SSC portfolios with the advent of GBS model. Though most of the SSC’s have already achieved very high levels of standardization and automation however, with the GBS model & increase in the number of functions there is a room for automation & optimization in their electronic workflow systems. This trend is intertwined with operational excellence optimization. Apart from this to counter industry challenges like labor arbitrage SSC’s should look out for ways to go beyond their status quo & shall observe potential for the overall IT governance.
The main attraction of GBS is the benefits it generates beyond cost savings, including agility, flexibility, and the ability to anticipate and quickly respond to internal/external changes. A couple of key components make GBS different from traditional sourcing models:
- Delivery scope is not limited to transactional, non-core functions, but strives for a multi-function strategy that includes business-crucial functions
- The GBS model embraces innovation, end-to-end integration, and a truly global perspective made possible through the engagement of C-level executives
Establishing strong foundation for a GBS include:-
- Strategy: Virtually all successful GBS organizations are built to support a business strategy. Ultimately, of course, the cost concerns dominate, although many organizations implement GBS strategies to support efficient global expansion and create process consistency. The success of a GBS initiative is highly correlated to a solutions focus. The goal should never be to “build a data warehouse,” for example, but to more broadly improve management decision-making.
- Think “Global”: Implement a standard global common approach, but make appropriate localizations
- Leverage Partnerships for Best IT intervention: Deploy specific IT tools for process optimization. One might be an e-invoicing solution to eliminate paper invoices and manual data entry and optimally capture discount opportunities. You might also need a workflow suite for real-time work tracking and allocation of activities across finance functions. Another possibility is a Web-based technology to automate the invoice to collect business process (unclear) using self-service. This reduces time, labor hours, and money spent on the entire order-to-cash process. Possible bolt-ons include a reconciliation tool for escalations and resolution; a close tracker to monitor the progress of different activities during close; a productivity tool with realtime dashboards and reports for transaction performance and capacity utilization; a duplicate audit tool to identify duplicate payments before payment runs, and a tool to detect errors. These identify opportunities to digitize, automate, and improve process performance through IT intervention.
- Define an effective leadership structure: If GBS is seen by top management as a bold, strategic move to change the status quo, the first names on the list will be executives who already have the trust of the C-suite. A significant component of successful GBS planning and execution is based on selecting the most advantageous leader for this all-touching, far-reaching function. The definition of GBS varies in the marketplace, organizations are moving toward GBS and adopting models that incorporate a mix of multifunction, multi-location, multi-region, multi-business, and multi-sourced. The GBS leader is becoming a confirmed and recognized role in organizations, with significant responsibility across multiple functions including continuous improvement and global process ownership.
The Global Business Services model leads to focused cost processes effectiveness, increased service focus & innovation & is not the same as shared services or outsourcing. GBS acts more as a strategic partner with the business as more mission critical processes are managed by GBS. While the framework calls for evaluation of shared services and outsourcing solutions, the difference lies in an entire organization collectively leveraging global business services to propel attainment of corporate strategies. As many shared services and outsourcing strategies remain in silo and poorly integrated into corporate strategies, leading to functional operating efficiencies with little alignment within the organization. A global business services strategy unites functional strategies into a collective plan to achieve enterprise objectives.