According to SSON’s Analytics data [2022 industry survey] three-quarters of shared services are already committed to the global business services (GBS) model… if not already adopted, then they are on the way to getting there.
 
So what defines GBS? And how do you know whether your global network of “shared services centers” amounts to a GBS organization? Indeed, many shared services organizations slap a “global” sign above their desks and consider themselves done. That’s not quite enough, as it turns out. This article briefly describes some of the differentiating factors.
 
The GBS Certification Program brought to you by SSON outlines the GBS model across five main pillars: Foundation, Service Management, Operations Management, Transformation/Change Management, and Leadership. 
 
“If you’re just looking at cost you’ll tend towards commoditizing services,” explains Tony Saldanha, one of the course’s leaders. “And commoditization is the enemy of GBS.”
 
“There will always be somewhere cheaper to source services,” explains Saldanha. “Africa is currently up and coming in this regard. But, as opposed to simply centralized or standardized shared services, which prioritize cost reduction, the GBS model can do so much more.”
 
A commodity, he reminds us, can always be outsourced – look at how corporate email services have evolved. Nobody has their own email shared services center anymore; they source email as a service from Microsoft or Google. What distinguishes global business services is that its inherent value is entirely wrapped up in the enterprise and cannot – should not – be separated from it. On the contrary, it should be integrated even further.

1. GBS as a business unit – not a function

A key differentiator is that GBS should be operated by using the practices of running as a business, not as a function. The skills and capabilities that are honed in a GBS reach across the organization and impact output at every level. So, far from being seen as a low-cost transactional function, GBS ought to be seen as an enabling component of modern enterprise. GBS is so much more than what we think of as low-cost back-office transactional accounts payable or payroll or data entry services, for example.
 
This also means that GBS roles are aligned with business roles. Managing global business services is like running a production line – and managing GBS operations is like managing a production plant.
 
In a similar vein, managing a GBS service is just like managing a brand.
 
“A service manager,” explains Saldanha, “ is effectively a brand manager – concerned with cost, price, innovation, and market share, which equate to adoption or consumption; sales, financials, and operating metrics – which equate to consumers’ opinion; and acting as a single decision maker end-to-end, empowered through a governance system.”

2. Recognize four stages of GBS evolution

How do you get started with GBS? And what are the various stages you evolve through? The chart below, taken from the GBS Certification Program, highlights the four stages of the model. Most GBS find themselves in stage one or stage two – either in piecemeal offshore/outsource mode, or operating as a global GBS but falling short of optimizing processes and not yet at the “next generation” stage.

3. Understand the power of the operating model

What does a GBS model look like? First, you need to understand the difference between the business model and the operating model. The business model covers customers, suppliers, and cost, for example; versus the operating model, which translates all that into work processes – but not in terms of the usual work processes like procure-to-pay or hire-to-retire, rather, in terms of the processes that run GBS – connecting with internal clients, or benchmarking, etc. Taking an automobile as a metaphor, the business model is the engine and the operating model is the transmission that transfers power to the wheels and gets the car going. It’s the operating model that drives value out of the business model in other words.

4. Start with service management role

Given the unique and differentiating attributes of GBS, it calls for a unique role, namely that of GBS service manager. This role reflects the capabilities of a GBS, and is what takes it from cost reduction, where all shared services start, into an innovative operating model.

 
 
If you’re interested in learning more about GBS
and taking part in the GBS Certification Program,
please contact Naomi Secor.