If you have found yourself on SSON’s website before you likely have a solid understanding of the shared services space and its “best-in-class" model that is global business services (GBS). However, with so many different definitions and standards for shared services models in the industry, it can become difficult to determine what a universally acceptable GBS model looks like.

This is why the SSON Digital team has set out to create this beginner’s guide to the GBS model. In this guide, you will find a definition of GBS, how GBS is different than the typical shared services model, and the pros and cons of a GBS model. 

Global Business Services: A Summary

According to the SSON Glossary, global business services (GBS) is a more mature and integrated version of the shared services model. GBS controls the delivery of business support functions to the core business through multiple service delivery models on a global basis, and it has become one of the most popular areas in corporate development for driving optimized performance across multiple business support services. While shared services has traditionally been viewed as a support function to the broader business, the GBS model positions itself as a business partner that can help the organization meet strategic objectives. 

Over the past decade, there has been an increased shift towards the GBS model. According to SSON Research & Analytics “GBS and Shared Services State of Industry Report 2022”, three-fourths of respondents said their organization is committed to GBS, whether by already having transitioned to the model or planning to this year. Similarly, a third of respondents said their GBS is already serving multiple countries, meaning they have established a model that can adapt to the needs of each region and function.

There is not a one-size-fits-all GBS model for each organization. Multiple variations of GBS currently exist along the spectrum of scope, delivery, and governance models, and each business must determine where their GBS should fall on each spectrum depending on their long-term goals. 

How is GBS different from the shared services model? 

SSON Columnist Bob Cecil along with Jeff Goldstein, a business service expert with 30+ years experience, explain the history of shared services in their 2021 column titled “The GBS Paradox: Single vs. Multi-Functional ‘Global’ Business Services”. In the column, Cecil and Goldstein explain functional shared services began as a trend in the 1980s. The early focus was on delivering finance transaction processes with the goal of centralizing scale and efficiency while decentralizing service and innovation orientations.

Shared service organizations (SSOs) were run like a business through commercial, service, and operations management. In the 2000s the rise of outsourcing elevated shared services to manage other functions such as HR. In the past several years, the GBS model has elevated shared services even further by becoming an enterprise-wide model that is flexible enough to serve multiple business functions. 

One of the core differences for GBS is that, instead of operating multiple shared services centers and managing outsourcing vendors independently, GBS provides integration of governance, locations, and business practices for all shared services and outsourcing activities in a business. This integration is valuable for establishing KPI’s that are relevant to each function, creating sustainable workflows, and fostering communication that can reduce business silos. 

As mentioned above, the main purpose of GBS is to serve as a support function to the business as a whole. GBS provides that support in ways the shared services does not by being more consultative with functions, establishing itself as a business partner to the teams it serves, and offering a broader scope of services than standard shared services. 

Opportunities and Challenges of the GBS model

GBS Model Opportunities

Barbara Hodge, Editor-in-Chief of SSON Digital, explained in a 2019 article titled “Can YOU Define GBS?” that the GBS model can be advantageous for businesses in more ways than one.

At its root level, GBS is capable of sourcing multiple functions across multiple business lines, regions, and jurisdictions. This full understanding of these business functions and the regions they operate in allows GBS to determine the best uses of offshoring, and how to mix it with outsourcing opportunities.

Another advantage of operating a GBS model is the agility it provides compared to standard shared services.

GBS organizations have the flexibility to respond to any situation in any region by leveraging global operations, technology, and talent to determine the best solution. This ability to respond quickly to any problem is why the GBS model is so important for allowing a business to stay ahead of its competition. 

The GBS model is also valuable for organizations taking on an intelligent automation journey. GBS establishes a global delivery framework that every function can utilize as they look to improve their process efficiency, and eventually reach end-to-end process excellence. 

GBS Model Challenges

Although GBS is considered the best-in-class model for shared services, it is not always the best fit for an organization.  

One con of the GBS model is the high level of stakeholder investment it requires. Without buy-in from each function, GBS will struggle to fully understand the processes those functions are responsible for, which, in turn makes it more difficult for GBS to serve the business as a whole. 

Amidst a constantly shifting global landscape, another challenge for GBS is continuing to deliver value while navigating new office space settings. Working with change management teams can be overwhelming when each region is working with a different set of rules and regulations, and GBS is typically at the forefront of organizing those efforts. Similarly, it can be difficult for GBS to create standardization of practices when each location is working under different circumstances.

If you’re interested in learning more about the GBS Model here are a couple of resources you can take advantage of: 

• “Predicting the Future of Global Business Services” by Barbara Hodge
• “Reducing Costs and Delivering Value” by David McFarland
• “How the Impending Recession Will Impact Shared Services’ Decision-making" by SSON Network