I looked up the question “how to measure GBS performance?” in Google and was surprised to find thousands of results on this topic. At the same time, I understand why there are so many articles and studies on this area. Operational excellence is the backbone of a GBS organization, and measuring operational performance is the way to ensure you maintain high excellence levels.
So, you have migrated processes into GBS and you have the right resources to do the work, but how to ensure the services are being performed as expected? And how much rigor do you need to have to maintain those service levels? Finally, you may be wondering how to move up from the current performance?
Consider the following three steps to measure the operation results so you can continue to offer value to your customers:
1. Identify the right measures
Start by answering these questions: what services do you offer, and what are the standard measures in the industry for those services? There are many benchmark studies that offer good guidance on the types of metrics you could have for your typical GBS service lines. For example, you can consult the SSON Metrics & Benchmarking reports.
Ensure to add internal processing metrics (in-process) that measure the effectiveness and efficiency of the work directly performed and controlled by GBS. Make sure to measure not only compliance with timelines, but also quality, compliance with policies, value-added, etc. The main customer of these detailed metrics would be the internal GBS organization but some of them are also required by the Global Process Owners.
In addition to this, you should also include business outcome metrics that provide a view of the status of the business after the processes were performed by GBS. Some of these metrics are the most useful for the Senior Customers of GBS.
It is very important to add end-to-end metrics, to measure how the overall process is performing including the activities of the process that are done by GBS as well as by other parts of the business.
Remember to review your metrics at least once a year. As the business evolves, the metrics and their formulas might need to be adjusted.
2. Set up the correct targets and act upon the data you are getting from the metrics
Initially, your targets will be based on demonstrated performance, meaning, you need to measure the current performance levels. The target could be a percentage, a number of days, or an amount, depending on the type of metric. If the measure is completely new, it is recommended to estimate the targets based on twelve months of performance, to ensure your target considers seasonality and most of the recurrent ups and downs that are part of the process.
Based on the metrics results, you will learn a lot about your business. What type of impact does the business seasonality have on your metrics? Are the processes you control within GBS at their maximum performance? Are there recurrent issues that cause your metrics to miss the targets?
Once you reach stability in your processes and metrics, the next question from the GBS Clients is, what are you going to do to increase your performance?
3. Select a strategy to reach stretch goals in your targets
While it is ideal to have perfect scores in the GBS metrics, this is not always the reality across all the processes you run within GBS. This is especially true when dealing with end-to-end metrics. Here are a couple of options to work towards improved targets:
Set aspirational targets
This is a common approach where GBS or their Stakeholders, set a target above the current performance levels. A couple of drawbacks are that the team will likely achieve first some easy wins without doing a deep analysis and, due to the pressure, they might also achieve inconsistent results related to no systemic fixes.
This approach will help you increase results for some time, but you will only get what you measure. If the targets set are moderate, you would not achieve the optimal outcomes.
Perform a reverse analysis
This approach focuses on analyzing what it would take to reach the maximum target possible for a metric. One watch-out on this approach is that 100% might not be a feasible target as it might be too expensive to be at that level.
A common error when discussing metrics results is to focus on explaining the exceptions, instead, you should build a plan to influence changes upstream and downstream to remove the exceptions.
With this method, you develop an understanding of the different building blocks that impact a metric and of those obstacles that prevent you today from reaching the maximum results. This deeper analysis helps you to have a clearer picture of not only the easy wins but the hard choices or changes that you must make.
For example, many times, changes must be made not at GBS but at the market or sending business organization, where you need to redesign a process end to end to be able to achieve, in a systemic way, the target you are looking for.
Based on experience, I highly recommend you the approach for critical metrics where your performance has not made significant progress for a long time.
Which method do you use? Please reach out to share by emailing info@ssonetwork.com!
Remember:
1. Always focus on business outcome metrics, in addition to in-process metrics.
2. Look at end-to-end process metrics, not just siloed processes.
3. Be very deliberate on who is the target audience when communicating each metric: Senior customers should mainly see a few outcome metrics; Global Process Owners will need a few in process metrics; and most detailed metrics should only be for the internal GBS organization.