GBS: Tidal Wave Of Change In Non-Core Processes

Bloggers are supposed to be at the leading edge, right? Scanning the horizon, reflecting on what’s coming blah blah. Actually I realised last week how I had completely missed the phenomenal growth of global business services.

‘Global business services’ (sometimes known as ‘core business services’ – let’s call it GBS for this purpose) is where the business combines all of its non-core activities into a single business unit, with the aim of driving down non-core costs, whilst maintaining and improving service levels.

Essentially, GBS is a mash-up of HR, Finance, IT, Procurement, Legal, Facilities and sometimes Supply Chain. The functional silos may still exist but they become porous membranes not concrete walls. What were functional shared services become cross-functional shared services. What were functional outsourcing deals become cross-functional multisourced services.

Until the Shared Services and Outsourcing workshops last week, I had thought that GBS was at the leading edge of innovation, a strategic initiative for a handful of global leaders. But it turns out that between us we knew at least 25 global enterprises – all Fortune 100 – that are actively engaged in the design or implementation of GBS units. [one that had started down this path five years ago]

GBS represents a tidal wave of change as it becomes mainstream. The GBS unit faces the challenges of orchestrating service delivery across organisational silos, and an increasingly multisourced environment. It’s about accelerating the pace of change, driving new efficiencies and creating new opportunities. For many CEOs, it will be about building value in a GBS business that might be spun off in the longer-term.

Whichever way you cut it, end-to-end process is crucial to GBS success. The design, implementation and ongoing optimization of a GBS unit demands an enterprise process framework that enables collaboration by all the stakeholders, within a single governance framework. What else could possibly support sustainable operational excellence?

And this collaborative framework isn’t just for the obvious operational efficiencies either. As the IAOP/Accenture Outsourcing 2010 Survey noted, the growth of outsourcing across the enterprise has made knowledge management far more critical. Maintaining visibility and understanding of the end-to-end processes of the business, no matter from where they may be sourced, is a strategic imperative. How else to manage risks – and to elegantly reverse out of outsourcing deals that don’t work? The strategic risks are potentially enormous.

GBS execs might take a leaf out of the book of the outsourcers. In many ways, GBS business models and operations are going to converge with the outsourcers, who face the same challenges in reverse. So the experience of outsourcers such as Computacenter or Steria, who have publicly shared their experiences in creating a process framework to industrialise service delivery, and to create new environments for closer collaboration with their clients, provide food for thought.

Exciting stuff – much more on GBS to follow, no doubt. If you have a GBS perspective or case study that you’d like to share, please comment here or get in touch…

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Mike Gammage is VP and Principal Consultant at Nimbus Partners. Mike has worked in performance improvement consulting, and more recently the BPM space, for more than two decades. He is particularly interested in the overlap between two very dynamic worlds: BPM and perfomance improvement (the drive across all industries to standardise, improve and automate) and sourcing and the virtualisation of the enterprise (the drive to create more flexible and lower-cost service solutions through outsourcing, offshoring and shared services). In either case, Mike believes the enterprise needs a single source of truth about its end-to-end business processes, as well as a framework for the design and implementation of change. It also needs to connect the end-user and all other stakeholders to ensure the adoption of change. These are the keys to sustainable transformation and continuous improvement.