According to SSON Research & Analytics, 61% of shared services are committed to GBS – whether transitioning, already adopted, or moving towards digitized delivery. In addition, 19% are planning to move to GBS within the next five years. This leaves just one in five not convinced by GBS.
As more and more organizations begin to implement a GBS model, it becomes more difficult to stay relevant as a GBS leader, especially for smaller or less established organizations. Furthermore, while we work to stay relevant in such a rapidly changing and growing industry, we also must differentiate ourselves and deliver value in a way that stands out among competitors. In the following, I will explain how to do just that while also overcoming the annual cost reduction challenges.
Markets of all sectors are in constant change and evolution while also dealing with risks and battles that have come from the long lasting effects of covid, economic trends, digital transformation, and more. While now is a time like no other to stay at the top of the “next big thing”, it is also a time where it is crucial for organizations to stay smart in their choices due to changes in the economic environment worldwide. These two factors combined are making it even more crucial for organizations to not only be smart, but also be creative and innovative. In today’s world, there is very little room for error when it comes to evolution within companies. Figuring out how to exponentially grow an organization while overcoming business challenges as quickly and efficiently as possible is key to ensuring you have a successful GBS.
How do we do this?
First, you need to make sure that you run your GBS as a business unit and not a function/area. This is the beginning of a wider approach to ensure long term success of your GBS model. Secondly, be sure to have goals that are measurable, specific, and sustainable. This will help you track progress as well as project the value GBS brings to your organization.
Secondly, cost management is also extremely important because it will ensure resource allocation, maximize ROI, and provide a competitive advantage. To do this, it is important to continuously monitor and optimize operations. When it comes to all aspects of integrating a GBS organization, do not be afraid to re-think and evaluate what can be different and constantly review ways to do it. For example, in terms of cost, work to validate not only one goal for cost reduction, but also include your analysis of possible scope increase. With the same cost and bigger scope, this can bring value in some activities. For example, check what the opportunities are for automation, and be sure that all of your services are scalable over time and standardization is implemented.
A Smooth Implementation
Now, I am not going to sit here and say that this is easy to implement. Like most things, simultaneously becoming relevant in GBS while increasing value is much easier said than done. Here are a few tips to help with implementation:
- Establish the proper governance and communication plan about the results: This will ensure that your organization has a well-structured governance framework in place. Be sure to create clear roles and responsibilities and have a solid communication plan to share key results and insights.
- Measure the progress and be ready to adjust your plan to possible changes: As you know, change in GBS is unavoidable. Constantly monitoring your progress and preparing for future changes can help.
- Put proper cost controls in place: Be sure to not only share what is spent, but also how activities and results are bringing value in terms of cost avoidance. Sometimes, the benefits of cost avoidance are underestimated.
- Establish a clear location strategy: A clear location strategy is crucial to optimizing your near and offshore activities. By aligning your location strategy with your overall GBS objectives, you can make informed decisions about where and how to allocate resources effectively.
In conclusion
When you are focusing on improving your GBS in a way that gains relevance, stands out among competitors, and is exponentially increasing in value, remember the importance of effective governance, robust communication, clear targets for cost optimization and scope increase, and always review your processes. It is always beneficial to leverage your structure to do more while even simplifying processes. If you assess your overall structure, you may find there are more opportunities to do this than you think.
Having these clear controls in place can help you to fluently move through challenges throughout your journey. Putting in the extra work to prepare can help speed up the process, limit costs, and even improve buy-in and support from key stakeholders, keeping all layers of the organization stable and successful.