At a recent HFS digital roundtable in partnership with Tech Mahindra, we discussed the changing nature of global business services (GBS) organizations with 17 GBS leaders from several industries. Enterprise leaders are rethinking the value GBS brings to the organization and setting their sights high. To deliver a broader range of business benefits and value, GBS leaders present in our discussion felt they might need to rebrand the GBS function for themselves and the rest of the organization.
Can GBS become an engine of growth?
Enterprises face turmoil attributable to macroeconomic factors such as inflation, supply chain disruption, the impact of war, cybersecurity threats, and a looming fear of recession. These factors drive organizations to cope by reducing operational budgets. Additionally, the talent crunch continues to be a concern.
Simultaneously, organizations are increasingly focused on innovation and digital transformation to stay relevant and competitive. Combined, these forces drive the top-of-mind enterprise priorities: the Slowdown and Big Hurry, resulting in the digital dichotomy (see Exhibit 1).
Source: HFS Research, 2023
In our view, global business services and shared services organizations are well placed to help enterprises drive savings through operations efficiencies and effectiveness initiatives and evolve as the strategic advisor, driving innovation and profitable growth.
Traditionally, GBS helped organizations consolidate processes, primarily to drive cost savings. Many enterprise leaders at the helm of GBS organizations are setting their sights on a much broader scope of strategic value GBS could bring. They are exploring the possibility that GBS could become a profit center, working much closer with business stakeholders to drive greater internal and external collaboration.
The Venn diagram resonates well for me. The GBS model is well positioned to navigate the future direction of the enterprise. We established an automation program with digital champions embedded during the pandemic. From this, we were able to assess the outcomes, and we have doubled our investments in certain areas to take advantage and drive the culture of innovation.
– SVP & Global Head, pharma industry
Sample: 17 GBS DRT Delegates
Source: HFS Research, 2023
A delegate poll (see Exhibit 2) showed that more than half of the GBS leaders attending prioritize innovation to drive value by building a collaborative ecosystem. The remainder were evenly split between those building and strengthening their capability around cross-silo processes to improve CX and EX in the HFS OneOffice model and those focusing on functional digital transformation.
The purpose of GBS is clearly driving business value. For faster adoption, businesses should look to collaborate and invest beyond the four walls of the organization. An ecosystem approach is clearly what is going to benefit every GBS across industries going forward.
– Bharath Vasudevan, Chief Capability Officer, Tech Mahindra
Our delegates echo that the GBS role has significantly evolved, and the value that GBS attributes cannot be measured against traditionally defined SLAs focused on transaction processing. A roundtable delegate shared that their organization is moving from measuring and reporting KPIs to focusing on business outcomes, helping trigger new conversations with the business. By providing more insights with data, the delegate’s GBS organization has helped the business discover and repair issues. GBS leaders can influence the C-suite’s decision making about end-to-end enterprise functions. GBS can drive new values and deliver insights instrumental in achieving organizational objectives.
As the Vice President, GBS of a health insurance company shared,
No single organization on its own will be able to create the future. Organizations need to come together to share resources, knowledge, and capabilities to build a future ecosystem. A strong foundation can fully automate and digitize functions, not for cost reduction but to create greater value.
We found resounding agreement with the idea that the GBS function’s branding is of utmost importance and needs a rethink to have any chance of successfully driving new value. GBS should aim to change the narrative from being a service provider to a strategic partner to help businesses deliver on their strategy. It would need to establish a culture to drive brand value through everyday interactions, behaviors, engagements, capabilities, and the ability to share success stories and failures. Rebranding efforts would influence the broader enterprise to view GBS differently. It also would help GBS think differently about the value it brings, the talent and skillsets it is free to cultivate, and the wider impact of technology transformation it can drive for the organization. For effective and impactful rebranding, GBS
Effective branding is the key, and how the story is being formed is important. One can leverage and adapt what everyone else is doing and make it work for the organization, but it may not always work. Success can be achieved when customers start to see the value and what the function stands for. This is only possible through a cultural shift projected by the people of the organization in the way they act, speak, and interact.
– SVP & Global Head, pharma industry
As our discussions with the industry have revealed, GBS needs to have a game plan to bring value beyond just being a service provider to drive customer and employee experience. Alignment of operational and strategic functions is important to drive business outcomes. Net-net, GBS is strategically positioned to drive enterprise-wide growth, but will need to make investments to execute on these aspirations.
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