SSON's Beth Hampton digs into "operating models" and their resiliency issues with Chazey Partners' Founder and CEO, Phil Searle.
Beth Hampton: We are seeing global business service delivery models coming under pressure as they seek to maintain services support in the face of COVID19. Do you think the GBS model will emerge stronger or weaker?
Phil Searle: This question does notreally have a simple yes/no answer to it. These days (and indeed, well before the current outbreak) we have been talking more about “operating models” than necessarily talking about “Global Business Services.” Having said that, there are many elements of a proper GBS model (and I emphasize the word “proper”) that are fundamentally important to business resiliency, scalability, continuity and control. These include:
Governance – including (in times of emergency) coordinated leadership, allocation of resources, and prioritization of response.
End-to-end process understanding and approach – without this there are multiple handoffs and potential “break points,” especially along and between functions and business units.
Proper and robust documentation – of processes and controls, as well as technology touchpoints. This is fundamental to enable cross-training, redundancy planning, automation, covering for absent staff, and resource/load planning.
Well defined, operated and reported performance management framework – including input, operational, and output KPIs. This is critical to understanding performance impacts, monitoring progress, and pulling levers; especially in a crisis.
Data management, distribution and analysis – these are significant drivers of high-performing GBS models and will play a critical role in enabling them to manage a crisis and, indeed, come out the other side stronger than the competition.
Use of intelligent automation – IA, and specifically RPA, can be located and managed much closer to the business, indeed, even on individual laptops! This trend towards leveraging IA close to the business will inevitably expand and grow as a direct result of the current crisis. Bots don’t get sick, and “hybrid workforces” are fast becoming a reality. GBS operating models, including IA Centers of Expertise (COEs) are driving RPA adoption in many enterprises. We also see “robotic arbitrage” emerging as a winning strategy, replacing the need – for business processes specifically – for “offshoring” (whether that be through a third-party BPO provider or through a captive (internal) SSC). I have been saying for years that IA and RPA are replacing “traditional” BPO outsourcing, although this trend has not been so prevalent in ITO, Manufacturing and Supply Chain. I think that will change now.
Business continuity planning – this is very important, and includes managing redundancy between centers and across teams; the ability to scale up and down; leverage technology; etc. The best GBS models have integrated BCP, although I am sure many current set-ups will need to re-consider their strategies.
Beth Hampton: Which components of GBS do you think need to be reconsidered in light of what we are experiencing at the moment?
Phil Searle: There are definitely some components that will need to be re-evaluated in terms of their ability to maintain business continuity.
The extent to which outsourcing – and specifically offshoring – forms part of the current service delivery model needs to be re-examined. Similarly, some current models have been exposed as being over-reliant on one global location, so I think regional models will need to be reconsidered, along with redundancy planning linked to BCP.
We have also become more aware of potential “single points of failure” – again, linked to BCP, but in truth these need to be reassessed irrespective to what is going on at the moment. And finally, there is the issue around working remote and leveraging more “virtual” operating models. This will prove fundamental, I believe. Having said that, the best operating models and GBS teams were already looking at this.
Beth Hampton: Does relying on centralized models increase enterprise risk levels given an event such as COVID-19?
Phil Searle: I think that is true – but this is less about over-reliance on “centralization” than it is about having a resilient, scalable and robust operating model in place, supported by an up-to-date BCP and linking to other teams’ BCPs (for example, the BCP plan for IT). I would add that any reference to the risks around centralization (that would need to be addressed by any BCP) should distinguish between risks related to centralized “locations” and those related to centralized “organizational structures,” as they are different.
It is true that if is everything is siloed, then there is less chance of any one event taking the whole company down, but I would also describe that scenario as one of “multiple single points of failure,” without back-up.
As the current crisis has taught, a pandemic isn’t one localized “event,” like an earthquake. This is a global phenomenon which will require a global response.
Phil Searle is the Founder and CEO of Chazey Partners, a global management consulting and advisory services firm specializing in shared services, business transformation, and intelligent automation. He will be presenting a session on “Making your Business Continuity Plan Real: Reacting to Covid-19 and Preparing for the Next Crisis” as part of SSON’s Business Continuity Planning Digital Summit on April 23, 2020.
As part of this session, Dan Russi, Executive Director at UCPath Center – the University of California's transactional hub for centralizing and streamlining critical functions – will present the BCP model he had designed to ensure resiliency, and explain how and where he found himself needing to adapt it to manage the current crisis. This adapted model has just gone live with a remote working approach that has proven very successful.
Join this session. Register now.