What’s your GBS?

“Beauty is in the eyes of the beholder” goes the old saying. And when I look around at the feeding frenzy surrounding GBS (global business service) models as the latest sourcing trend, I’d say that a majority of leaders purport that their models fall into the GBS bucket—whether they consist of one function, one center, a singular outsourcing relationship or something more global and multi-functional . Now I’m not inclined to call everyone’s baby ugly, but what really is a GBS? What caused us to put GBS on the business services agenda?  And where is it going to take our organizations?

Late last year I sat through a session that brought together a group of guys and gals who are holding themselves out as global services leaders. Call it the relative immaturity of the model—or the eagerness of the organizer to assemble a group a level above your garden variety one center/one country/one process shared services or sourcing leader—but, as much as I tried, I didn’t see a standard definition of “global,’ “standardized” and “integrated.” Rather, I was in the presence of an energetic and aspirational bunch of fellow seekers, trying to define a common business platform that moves the dial for their organizations, each with a different business context.

Then it hit me like a ton of bricks; GBS as a model is ethereal, flexible and definitely in the eye of the beholder. There is no finite set of  common denominators, other than a goal to leverage infrastructure, leadership and expertise to the extent permitted by the organization to achieve a common goal—a more efficient platform upon which to improve manage, increase productivity and better control the functions that support all or most of the business. Definitions that include “two or more outsourcing relationships,” “truly global,” “one leader at the C-suite level,” or “a singular governance platform” aren’t box ticks for every GBS leader or aspirant. In short, there’s no one-size-fits-all business model.

So what is GBS? As a keen observer of the evolution of alternative delivery models—shared services, business process outsourcing, and every shade in between–I could argue that GBS is the advisory industry’s attempt to push a new organizational construct out into the market, setting out the “must-haves” in order to line their pockets—a consultant’s conceit . After all, which organization doesn’t want to be seen to be “with it” when it comes to the latest and greatest business services model?  But taking a pragmatic approach, I’d suggest that GBS is conscious intent to do organizationally what you can today with an eye to what you want to do tomorrow, deploying a range of tools: scope, function, technology, capability, location…indeed, whatever the organization has at hand to make it more agile and cost effective.

In short, corporations should ask themselves “What’s my GBS?” And where do I want to take it? 

I’ve noticed that there are a number of  GBS “realities,” ranging from organizations that see it as a repositioning of shared services stroke outsourcing  within the business to a major shift in organizational paradigm—and every shade in between.  Here are the most common pathways to GBS:

The Rebrand Often organizations can’t sell the concept of shared services or outsourcing to the business—due to perceptions, misunderstandings, corporate politics or even a program-gone-wrong. The brand becomes toxic and unsale-able, even if the C-suite enthusiastically endorses (but not mandates) the concept of sharing across business units. Enter the rebrand—calling a fairly standard shared services structure “Global Business Services’ in order to a), make the concept more palatable to the lines of business, or b), message to the organization that the CEO or CFO really mean business by the use of the word global. What the rebrand does is merely reposition the shared services organization to expand scope, scale and geography by ridding it of any old baggage, and putting forth a new brand promise to the business. Fundamentally nothing changes, but the organization may get a shiny new lease on life to evolve into something more significant over time—if it plays its cards right.

Infrastructure call off Smart organizations have realized that dotting the map with delivery centers run by each function—finance, HR or IT– may not be the most cost-effective operating construct. By putting the budget ownership and management of operations—but not the delivery of  processes– under one leader, and even co-locating operations where they make sense, rationalizing infrastructure may be a good structural move to a GBS mode for some organizations. Who’s to say that shared infrastructure isn’t GBS? And why can’t its reach stop at common wires and brick and mortar?

Plumping up the power of the CAO Many organizations are experiencing the return of the Chief Administrative Officer (CAO) at the group level In an ongoing effort to “delayer” the organization. CAOs were commonly found in manufacturing businesses some 20 years ago, and now, as organizations look to consolidate certain functions, the role is seeing a bit of a revival.  But any organizational change must be justified on having the scope and scale to make an impact on the organization, or the title becomes just a reward for loyalty or good behavior .GBS delivery is a natural tuck-in under a CAO, especially if the organization sees this function as a true back office…and needs a justification for changing the org chart.

Sourcing writ large  Suddenly someone realizes that sourcing services is a far cry from buying commodities such as computers or pencils, et voila: outsourcing of IT and services as a category is pulled out of procurement and realigned under the  technology or operations EVP. Many organizations are now finding that the act of sourcing alone is miniscule compared to the effort and investment necessary to manage outsourcing, and are elevating sourcing to a global workforce management strategy as opposed to a merely a buying exercise. This necessitates a consolidation of activity in order to connect the dots across the organization, leveraging best practices, standardizing approaches to sourcing and vendor management, developing a cadre of sophisticated leadership talent. And since all activities are managed by one group, who’s to say it’s not a GBS in form and intent?

Finance shared services on steroids The poster children on the GBS journey are clearly the finance guys. As the most pervasive of all the corporate business process transformation mavens, finance brethren have a leg up when it comes to implementing shared services, generally taking the first step on the road to corporate business service delivery domination. So after a few years of growing scope and scale in the traditional set of finance functions: order to cash, purchase-to-pay, record-to-report, and even a toe hold in FP&A, finance leaders start to look at adjacencies.  The arms race might include nabbing payroll out of human resources, or sourcing out of procurement, corporate real estate, or even the management of the sales back office. Suddenly finance shared services is writ large, encompassing all those formerly peripheral processes under the guise of going GBS.

CIOs know best As their organizational influence changes, either waning as a result of completing years of (painful and often unpopular) ERP implementation, or on the upswing as the corporation goes digital, CIOs start to look outside their traditional technology and infrastructure bailiwicks, edging into business process delivery.  Basing the justification to recreate his or her empire on the trend toward business-process-as-a-service, or BpaaS, or the so-called “roboticization” of business service delivery, the CIO goes for a power grab, waving the banner of GBS as he heads into the political battle.

In short, there’s no standard journey to GBS, or a stringent definition of what’s in and what’s out. Does it really matter what it includes, where it starts, or who owns it if it delivers the business value the organization requires? Corporates should ask “What’s my GBS?”

 

 

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