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May 26, 2023
Moderator:
Phil Fersht, CEO and Chief Analyst, HFS
Panelists:
You can listen above or watch this HFS Videocast here:
Session Description:
Ambitious global business services organizations (GBSOs) are becoming transformation hubs, aligning themselves to the principles of the autonomous enterprise. These GBS organizations drive talent, technology infrastructure, automation, and AI to provide rapid data access, support leadership decisions, and minimize manual interventions that impede progress and speed.
The goal of an autonomous enterprise is to enable humans to remove ourselves from some parts of the system so that we can continuously improve the whole ecosystem—and GBS can provide governance capability over key decision touchpoints for organizational leadership.
Rather than sticking to the traditional “finance factory” setup, where GBS and shared services tend to get stuck in the back office, GBS leaders must link the front and back offices, ensuring processes run smoothly across functions to deliver the data and outcomes the business needs. Leaders need to understand the data they require for success and assemble and govern the systems to deliver it.
So, how are current GBSOs moving toward autonomous enterprise? Leaders from inside and outside GBSOs will discuss and debate these questions:
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This transcript was auto-generated from the original recording and lightly edited for readability. We've done our best to catch errors, but names, technical terms, and company references may be misspelled or imperfectly captured. For the definitive version, please refer to the original audio or video. Views expressed are the speakers' own.
So, to get started — I think we know you, Tony, but why don’t we all do a very quick name, rank, serial number, what you’re responsible for in your organizations. And maybe, Liz, you can kick us off.
Yeah, happy to. So nice to see you all. Liz Evans — I’m a partner at PwC, and I’m responsible for leading our support, advice and guidance to organizations as they go through their GBS journey, and I’m the leader for the US group.
Thank you. Quick reminder, Tony.
Yeah — Tony Filippone. I’m a CPO at AXIS Capital. I’ve actually written and done some research for some of the consulting companies and some of the suppliers in the space on GBS too.
Great, great.
And I’m Tony Menezes, the other Tony on the panel. We’ll figure out how Phil decides who answers what questions here, but I’m with IBM and I lead our business process operations for IBM globally.
Hi everyone, I’m Ian Thompson. I head up global business services at S&P Global. That includes order to cash, accounts payable, T&E expense, and procurement operations.
Hello. Jen Wang — I’m with the Johnson & Johnson Consumer Health spinoff, so now known as Kenvue. We IPO’d at about two weeks old, and I lead the strategy and design for our enterprise Business Solutions Group.
Wonderful. So, to start this off — we’ve been talking about global business services, I think, since about 2012. I think, Tony, you and I wrote a piece on this with PwC — yeah, we did, one of the first pieces — and then all the big four consultants jumped on it. So we’ve been expanding on the concept for a long time. But what’s worked with it and what hasn’t, do you feel? Maybe, Liz, you’d like to kick off a bit with your experience.
Yeah, happy to jump in. So there’s been a long history — I’m sure there’ll be a lot of different perspectives around the table. As I look at it — and I’ve been involved in this space for far too long; I had to admit it was like 25 years yesterday on stage with somebody else, which is a long time. As I stand back, there are a couple of things that really stand out to me. One is creating a capability, a delivery hub. GBS organizations that are successful and have been sustainable have really mastered the ability to move work — move work around the world, do it seamlessly, take in more work, transfer work back to the business, to third parties — and that ability to move work and control it and maintain efficiency is a really important part of the value that GBS organizations deliver. I do think we’ve, to some extent, constrained ourselves in transaction, rule-based work, and trying to break out of that mould and that brand has been extremely challenging. Some organizations have succeeded in that space and have navigated a new brand, moving towards capabilities they can offer the organization like change management, program management, continuous improvement — way above and beyond the transactional services, other processing activity, centres of excellence, and so on. But I still think there’s a long way to go in shifting that mindset of what GBS organizations are capable of.
OK. And then maybe, Tony — you’ve been in and around GBS for a long time yourself. What do you think’s worked versus what’s maybe struggling with the concept?
So I think when GBS first came on the scene, it was very much a discussion around the relevance of back-office functions to the business. You’re talking about a finance operations organization that really had no relevance at all to the business. They were trying to answer, maybe largely at the beginning, just the efficiency question. But they have struggled with the effectiveness question — probably of what is important in the eyes of their stakeholders. So you pick your global business process, whether you’re talking order to cash or procure to pay or any of your more revenue-facing verticals — that’s where they really continue to struggle, because that is not an issue of organization. That’s an issue of how well you know your stakeholders and how well you are actually engaged on a day-to-day basis with them. So it’s not a question of where you subcontract it, because, like you said, they’re very effective at it — there are a number of companies who can do it. It’s how you do it. It’s how you do the work that matters here.
OK, so how we do the work. We look at the way things have shifted through the eras — the onset of outsourcing 20 years ago, digital hitting the streets about 2010, where it’s about how you respond to your customers quickly online. And then GBS, I think, as we’re saying, has really become that: how do we become more participatory about where we’re going as a business, how do we start to think ahead rather than react to change all the time, and get to what we call the digital one office. So this takes us to: what is the purpose of GBS these days? So maybe, Jen — do you want to think about the purpose? Where do you think it is?
Yeah — I love this. Not to tee up your last question, but really, GBS as a transformation engine. When you talk about major business model changes — if you look at spin-offs, divestitures — the ability to integrate and drive and connect all the dots to be able to execute quickly. COVID was a great case for how GBS organizations were really quickly able to set up call centers, central data and repositories. So those are the types of situations that really bring to life the connected capability, the agility to deliver all the services the group here has described.
So we know what it is — but what should be the purpose? And Ian, what do you think should be the purpose of GBS in an ideal world?
Yeah, in an ideal world, I think they’re valued partners in all the operations that occur within the company. They sit on a lot of data. There’s a lot of data to be shared and fed back to their stakeholders — whether it’s from an accounts payable perspective or order to cash. I can speak for S&P Global: we do partner with our stakeholders. Our culture is customer-first, and customer-first means our stakeholders as well as our external customers. We keep that mindset going on a regular basis, and it’s incorporated in everything that we do. So the purpose of GBS should be to obviously get done the work that needs to get done — whether it’s transactional or analytical — but we really need to be transforming the organization as a whole with services related to even automation. So we have things like transformation departments and automation departments sitting in a global business services center, and then we’re teaching — teach a man to fish, if you will — how to use things like Alteryx and other types of tools, Blue Prism robotics. That’s really what I think the GBS organization should be: no longer just a transactional dumping ground, as somebody said, but more of a value-add partner in everything that happens, because we do have so much data related to the organization.
OK, so more of a value-add partner — especially when we’re in what we call the digital dichotomy. We have a sort of economic slowdown and a lot of pressures, headwinds and a talent crunch, but we’re also in a big hurry to innovate, to hit one office, to become more autonomous, that sort of thing. So you’re saying, how can you be more of a business partner — how can we go from someone who can facilitate things to an entity that’s much more of an orchestrator of capabilities? Ian, maybe you can talk a bit more about that. You’ve mentioned automation, taking apps, you mentioned Alteryx, Blue Prism — but in terms of becoming more of an orchestrator, what do you think needs to shift?
Yeah — I think the GBS organization needs to become real partners with their stakeholders. What we need to understand is: what does an end-to-end process look like? What’s the very beginning? What’s the very end? What are all of the things in between that need to occur? And then we pull in the right resources from the organization to make sure it is working as effectively as possible. Sometimes I look at this as policing processes throughout, let’s say, the revenue cycle or the accounts payable cycle — creating more visibility and transparency into what those processes are and how they can work more effectively. I think we do have the ability to do that. We should be a little bit more out front and center within the organization, proposing change and having practical solutions like a lot of the tools we’ve heard mentioned during this time here.
I was going to add a couple of comments and pick up on this thread. As we work with clients from an IBM point of view — and also looking at IBM as an internal organization that has its own GBS organization — I think GBS organizations have a chance to actually be operating leverage for their companies. How can they drive cost and efficiency, as we talked about? It can also be a platform to provide an enterprise the flexibility to deal with business conditions — mergers and acquisitions, or divestitures as you just talked about, and also organic growth. This is where we’re starting to see GBS organizations go from the traditional back-office work also into some of the front-office work. Sales operations is now becoming part of GBS organizations. COVID helped break that hold that every sales organization had on the support they had. And marketing operations — another one that one would never think about. What’s fueling this is also the significant amount of dependencies on data and technology, which is part of your circle here. But the important part about being viewed as a back office or a cost center and moving up to being a value provider to the enterprise — I pick on the word change management a little bit differently, because change management is important, but in the workforce that we’re supporting inside an enterprise, or your network — whether it’s a supplier, a distribution network or even customers — engagement becomes an important phrase that we need to think through. Because no one wants to have anything done to them, whether it’s from the IT side or the shared services side; they all want to be part of the process. As we engage with our clients, it’s about how do we get folks into a process where they can be part of the input and be part of the change as it evolves. And they all expect the expectations to be well set. What we find when we go through that process — I’ve got a term called the garage that brings these three groups together: the user that’s being affected by the work, the technology teams, and the process domain experts — so they can all ideate around the best ways of reinventing work. I think that’s a big way the GBS organization can step up from the traditional expectations of just the cost center.
Yeah — and I think we talked a bit yesterday about breaking down silos between finance, procurement, customers and employees. So you think GBS is an ideal place where you can start to do that? You can start to look at operational workflows and say, look, we don’t want accountants just behaving like accountants — they need to think a bit more about producing data that’s needed by the business. We also need people in customer experience to have good exposure to the workflows into the back office as well. How does that happen? How do we break down these barriers? What works and what doesn’t work? Jen, you look like you have a view.
Yeah, I think it’s a lot about full-scale solutions and, simply, understanding a problem and then knowing and bringing all the resources to bear to solve it. One of the core competencies of folks in GBS environments is almost — I’ll call it relentless dot-connecting. If you could put that as a competency on LinkedIn, it’s just going and going, connecting all the dots and understanding every piece of a process and what that’s going to touch in terms of a system, a customer — and making sure everybody involved and impacted understands that. That’s some of the skill and the recipe: both having the visibility as well as understanding how to engage and how to communicate all the impacts, end to end. And that’s fundamentally how I’m going to — I’m going to use that instead of police: a dot-connector.
Yeah, I like that — it’s very good.
But I think Tony said it earlier — it’s not just about efficiency, there’s also effectiveness, right? So it’s the insights on the operations. Most GBS organizations actually know more about the business than the business itself — and sometimes more than the business stakeholders. How do you get beyond just processing work to actually giving your client — even if it’s an internal client — insights about how they could do things better? There’s always this talk, whether it’s an internal organization or a service product to some of my clients, as to what is done within the shared service center or the GBS center offshore, versus what’s done within the business units. And there’s always this reluctance to let go. But unless you’re able to drive value and incrementally demonstrate insights, you’re never going to break that barrier. So that’s a key hurdle to get over.
Yeah — Tony Filippone, you’ve seen this whole shift. But how do you get a view of the whole customer-to-employee life cycle in a shared service, in a GBS — where an order is booked from a client, the order is processed, it’s then managed by an account manager, it’s then…?
It starts with the people that you employ in the GBS team first, right? When these teams were all set up, shared service centers trying to become more relevant to the business — it was all about outsourcing, offshoring, doing a lift and shift, generally speaking, and moving processes elsewhere. Now what you’re trying to do is — you may have six-sigma’d yourself to death, you’ve driven out cycle times, you’ve hit your SLAs, you’ve moved everything down, but none of this moves you closer to the intimacy with which you understand the business. In fact, if any of you are on the buy side and have service providers, you’re always wondering what’s the additional value-add you get from your service provider. Well, your stakeholders in the business think the same thing about you. So it’s the people you bring in now — that skill set of offshoring and six-sigma stuff is not what they’re looking for. They’re really looking for people who want to know their businesses, who are like their left arm whenever they’re doing things — whether they’re selling business, or processing stuff, or you’ve got controllers trying to do reporting. They really want you to be part of those problems. And it’s about breaking down that kind of RACI model that you’ve negotiated in order to even get the stuff lifted and moved out — because now you need to work in a collaborative model, and there’s not a lot about RACI which is about collaboration. It was the division of labor. So you need to figure out now how you can work as a team instead of being individual contributors. So I think it’s a lot about the people you hire.
I’m just going to add to that — it’s also about how you train and maintain the skills and the curiosity of those people, because we’ve traditionally had folks focused on efficiency and processing, and now we need them to be curious about digital — and about where they can improve, remove work, not just by continuous improvement, but by using technology differently, and how they can incorporate their learnings to get closer and demonstrate value to the business. So it’s a whole level of curiosity that that workforce needs that they hadn’t needed previously. They’ve needed excellence as opposed to curiosity as a driver.
As we’ve been automating work in our business services, we’ve been transitioning those more curious employees — who pick up those skills — into our transition and transformation teams who are using automation. It’s almost like a funnel system between my operators, fingers on keys, and as they gain their skill sets they’re so much more marketable across the entire organization. So we really have a good feeder system to a lot of other groups coming out of GBS. There’s a lot of good, hard work and really good work ethic going on in GBS, and as those skills increase it just makes the company more and more valuable. So, yeah, I agree 100%. Employees are the key — finding those folks that are really interested in growing their skill sets, whatever that might be.
Interesting. And Tony Menezes — you lead BPO for IBM. As you’re going in and supporting massive clients with their own GBS, and your own delivery teams, you probably have to train them in a similar way. You’ve got to get these people thinking cross-process, cross-function: how do they partner with the clients? Is there a way that they educate the clients, or the clients educate them? How do you feel it’s working, particularly when you go into a mature client with mature GBS and they want to add some third-party capability?
Yeah — the crux of that conversation I have with my clients is: where’s the innovation? So what we’re doing now is to actually have the teams bifurcate. There’s one team focused on the operations — make sure we’re doing everything we’re supposed to do from an operational point of view, drive the continuous improvement, the six-sigma stuff. But we have now inserted into our teams a team that’s going to innovate and drive change with the client and with our operations. And look, there’s a natural resistance to this, because they’re keyed on how many people they have, and that in many ways drives the revenue models. But we’ve got to realize that if we don’t do something, we’re going to lose that anyway. So it takes a little bit of faith to say, let’s just get on with the client and help them innovate. And that innovation team that’s now being put into our client engagements is to actually extract the insights we have from the operations and go back to the client and help them see how they can reconnect their business. Realistically speaking, it’s not about saving five or ten people on this side of the house, but how can we actually make the work a lot better on the end-to-end of the client — and that’s where we’re going right now. And our clients are challenging us to step up on that.
It’s interesting, because we did complete a huge study last year of 1,800 service-provider staff — a lot of it at a time when there was a lot of attrition and the great resignation. They all said, yeah, we’ll jump for 30% more money, we’re all bored, we need more. But the one thing they all said was they can see so much more challenging work within their clients that they’d like to do. That was the one thing — OK, they might be fed up with their jobs and want more money, but they would actually be much happier if they were given more challenges to work on with their clients, because they can see ways they can help and improve. So how do you make that happen? Maybe your perspective, and then maybe something from Ian or Liz as well — how do you actually get that magic from a service-provider point of view?
One of the things that we did — we obviously have the full spectrum, from the consultant, the advisory side, to the technology implementations (if it’s in finance, SAP or Oracle; or HR, SuccessFactors, Workday, and the list goes on), and then we have the operate side — and they all operated as silos. About 12 years ago now, we reoriented the way we’re structured, where we’re structured around the buyer. So finance, supply chain as a buyer, and what that client would buy from consult to implement to operate — and that team now works as one team. So we’re bringing folks that have the advisory skills to help transform operations, and we’re actually making a career path for some of our operators to step up. That’s one way we’re infusing this value up and down across finance, supply chain, talent, and customer — and, of course, in the industry vertical as well.
OK. Ian, do you work with one or two major third-party partners?
We used to. We were working with a service provider for about 10 years. One of the things we were able to do over those 10 years was several acquisitions of companies that had multiple locations around the globe, and we wound up leaving that third-party provider. But one of the things, when you talk about GBS with a third party, is kind of creating that similar culture of work ethic and other things inside that third party, wherever they may be. I think we did do a good job of that. It started out with six-sigma, and then it was robotics — it was Automation Anywhere being brought into our AP process. So over the years there was a lot of change that we brought to our organization. You heard rumblings about, oh, they weren’t as service-oriented as our internal employees, but I’m going to tell you, I believe that they were, and our metrics got very good over the years. So it was a good engagement, and we just, at a point a little bit later down the road, decided that we would bring those resources back in. We wound up bringing over several folks from that third-party provider. There’s a lot of opportunity there, I think.
Yeah, and I think I can add, certainly from setting up a spin-off and having very lean resources — just recognizing that it’s not just about outsourcing work, but really about building those strategic partners where you have firms and a network and an ecosystem that can really help you accelerate capability build when your internal teams are fairly lean. Being able to have that one-stop shop, and not necessarily a fixed-fee service model.
Yeah — what’s it like having the ability to use a third party versus having people under you to get stuff done? Over the last few years of your career, do you sometimes feel less in control, or more in control, using a partnership?
It’s funny — I think throughout that timeframe we always needed different people working at S&P Global to manage different situations, so you saw the type of employee change over the years. When we wound up bringing that work back in, there was an opportunity to really solidify the S&P Global culture within our teams. Not that we didn’t have great relationships and really good work output from our third-party provider — but it is a different level of engagement, and just culture, and collaboration within the company. It’s better for S&P Global at this point. Our third-party provider provided a very valuable service for us when we first engaged them, throughout their tenure — but from a culture perspective, I like this much better.
So we did some studies — these are 28 GBS leaders, done just recently — on where they felt their challenges were to meet strategic objectives. Lack of centralized data that comes across consistently everywhere, whether it’s GBS or not, to be honest. But hiring quality staff, retaining staff, and getting out of silos seem to be the big challenges still. Maybe, Liz — you’ve been talking to a lot of clients for many years about this — do you feel these are still the biggest challenges, and are they getting any better?
The one thing that really — I suppose surprises me, excites me and disappoints me at the same time — is the silos. You’ve got GBS, and employee experience sitting there. I think we’ve long held the belief that employee experience falls within the parameters of hire-to-retire in the HR world, and we’ve all neatly, in the industry, put it in that bucket. But that only really guides the experience of the employee with you as an employer — it’s not the productivity of the employee and how they get the work done, how they’re excited about work or curious about work or learn in their environment. So I think we need to stretch the definition that we’ve all used, to really ignite and solve some of these problems about attracting the right talent and retaining the right talent. Because I agree with Tony — the talent that we all have in our organizations is key to our ability to deliver. That also hones in on one of the opportunities to break down the silos: if you have talent that’s curious and willing to learn and available to flex — now, not everybody is, and that’s OK, but being able to identify that talent and flex and cross-train, you’re able to break down some of those silos from the bottom up and demonstrate to the organization that you can deliver more. I think that’s a really important part of where organizations go. But we still haven’t — we’ve been talking about experience for a really long time now, and there are very few organizations that have been wildly successful in moving that needle.
Yeah — when you look at the business cases that get developed for this, it’s usually the “I can do this for a lot less.” How many times have you seen the business case include a big fat training budget for leadership development, or anything that isn’t directly connected with that cost takeout? You never see that part of it. No one ever thinks about the real cost of — call it HR — what does it really cost to attract and retain resources when these shared services or GBS centers get set up? They don’t include any of that. They just figure, instead of having vendor X do this for me, I can move it into an internal shared service center, or I can take it from our New York office and move it to Bangalore for a lot less. They never think about the real cost of what it takes to build a quality employee experience.
And not only that — this is the line-level staff, as you were saying, Tony, but it’s also the management staff that gets left out of it all. This is already the place where business processes go to die, anyway, and people say — where do you really develop your career in these areas? Because it’s not been built, and then you don’t fund it.
Yeah, I totally agree with you. It’s the biggest opportunity but the biggest disappointment at the same time, having been in this space for a while. It doesn’t take a lot — it’s a little bit of funding to do.
I think we should take that on the road. But then you see it — how hard is it to get funding, right?
Yeah, and it’s funny — I look at what we’re doing at my company, and I see there is some maturity there in funding our employees and their development from a leadership perspective. Over the years we’ve been able to create leadership positions in what I’ll call our low-cost locations — but that’s not really what they even are anymore for us; they are our operating centers. I was just in the Philippines, and I was in Malaysia — Malaysia is a recent location for us through an acquisition. We’ve had executives going there to try to instill this culture, and we’ve been investing in leadership training, team building, those types of activities — which they’re not very used to; they’re used to kind of the dumping of work. It’s been very beneficial so far. I think people have really felt the love, if you will, of the visits and the training and the investment we’ve made. It really depends on your culture and what your view is of your GBS organization and how they’re embedded into the larger enterprise. Again, I feel like, as a company, we’re a little bit more mature down the road — our employees touch all aspects of the enterprise. They have a lot of knowledge, but one of the issues is that we still hire at fairly low levels within the company. They’re not accountants necessarily; a lot of them don’t have CPAs. Some of them do come into the company in some of these other countries. And they make themselves very marketable to other departments, organizations and functions within our company, so I do see a fair amount of turnover — despite trying to lock it down. I’m going to get turnover based on where we’re hiring and the levels we’re hiring at.
So it’s almost like — what level do you hire at, and what do you hire them as? One of the things we spoke about a bit yesterday was OpenAI research into what ChatGPT is going to do — that it’s making a lot of university degrees useless. But if you want to bring someone into S&P, or a big life sciences company or wherever, you want them in a broad role where they can touch upon many things, they’re excited about the business, they have basic operational skill sets, they have curiosity. It’s almost like there needs to be a career track, because people have joked many times that GBS or shared services is not a career — it’s something you sort of end up in, versus…
But Phil, I think how organizations value GBS is also about how GBS positions itself — and it takes both sides to make this thing work. Some of the leading companies that are now looking at GBS are not just getting to operating level, but also making them flexible to support the business. So I’ll give you some examples. A finance director who’s moving through the organization is now leading the GBS organization for that entity. He’s going to do two or three years in that, and then he’s going to rotate out to something else. When a business leader is leading the GBS organization, it sends a different signal to his colleagues, because he’s one of them who’s just come through — and then he or she can really bring a lot of value. When we see those types of individuals lead, it just raises the bar of what GBS is expected to do. The second thing — and I’m going to challenge my peers here on the stage — is I think it is time for GBS to step up and say the IT execs support us. Many times they are sitting as peers, where IT’s got their own agenda and GBS is here waiting and hoping for something to come down the line. Instead, inside IBM, inside our GBS organization, we actually call it Transform and Operate. So Joanne Wright, who’s the senior VP for this, actually has both the CIO reporting to her and, separately, a Chief Data Officer, and, separately, a Chief Analytics Officer — before we get to all of the functional roles. And those three execs all support the business functions.
Interesting. And I think that’s how — when we start to see some of the newer organizations forming. At that point, the GBS leader — when we look at an organization, where do they rank? They’re either reporting to the COO, the CFO, and sometimes to the CEO. When an organization makes that level of commitment, they’ve realized what they want to do with a GBS organization. It’s very interesting, talking about the role of tech. I’m not going to snitch on you here, Tony Filippone, but I think you once told me that IT was your biggest roadblock.
There’s no doubt about it. Why do we ever need a CIO to begin with, right? Because we were spending hundreds of millions of dollars — or billions of dollars — in our companies on an IT organization where the costs are out of control, the development life cycles are out of control, the ups and downs. I think you needed one throat to choke for all that type of stuff, and the end result: you ended up distancing your IT from your business, because you pulled it out of all of your business and now it’s in an IT organization. It’s the same thing you do with GBS from an operations perspective — you end up yanking all the intimacy out of it and you stick it in some less expensive place to do work. So I think it’s one of those challenges. Should your IT organization report to your operations? I don’t think there’s a perfect solution about organizational charts, because as soon as you put your IT CIO underneath your COO, then suddenly there’s still some level of operations going on that is not within your GBS organization — you’ve still got controllers out there doing financial stuff, there are still lawyers doing contract negotiations, there are still salespeople doing sales. You didn’t move it all into one team, so you pick your poison. There’s no perfect org chart. Should the CIO be responsible for the operational outcomes and have the same level of intimacy that you want to create as a GBS organization with your customers? Yes, they should — and, in fact, you are one of their key customers.
Interesting. And then — new research we’ve done has shown that only a third of IT spend, tech spend, is now under the CIO. The shadow spend is incredible now. Because business folks can swipe a credit card and suddenly buy Monday.com or Asana or any of that stuff, and suddenly they have a workflow tool and they didn’t have to hire anyone. That’s a little bit of what’s going on out there. It’s not like the IT organization doesn’t have their own business functions in there — you look at what they’re running, the project servers, doing all their allocation of time, and they have their own IT finance teams and IT procurement teams stuck in their organizations. It’s not a lot different. Where do you want your economies to scale? Where do you want your career development to be for those people? Those are some of the big questions to ask. I’ve seen CTOs sitting in finance now, in other departments outside of IT. It’s incredible how it’s all shifting.
Yeah — a lot of organizations will have a head of finance technology reporting to a CFO. You’ll have a head of sales technology; head of HR IT is a big one that’s out there, because the payroll is so complicated. How far you move your IT operation from your business is a question of the level of intimacy. The more charts, the more tree branches away you are, the further away you are from understanding your business.
OK — so Liz, in your experience, are GBS organizations getting bigger and more empowered across most clients you deal with? Are they getting smaller? Are they being outsourced more? What are you seeing from your perspective?
That’s a great question — it’s all over the board. I’m still helping organizations go to their first generation of GBS, which, honestly, I’m surprised but excited about — that organizations are still seeing it as a viable way to have services delivered. I do think what has changed is there isn’t one end goal. So the principles of intimacy to the business, staying close to the business, staying relevant, delivering value, using data are all pertinent regardless of the organizational construct — whether it’s outsourced, insourced, in low-cost locations or not. But I think we need to, as an industry, stop saying there’s a “level five,” a panacea of what you should look like and how you should be organized, and make sure that the organization — large, small, being put together, being broken apart — aligns with the business objectives, and that you can demonstrate you’re driving value. As an example, I’ve got a number of organizations that are a true hybrid of a landlord-tenant model, where the function has responsibility for the work that’s being done and guides it, sitting alongside a traditional integrated solution where there is fungibility of resources being cross-trained on different types of activities — and those coexisting. That’s nothing that we ever talked about out loud five or ten years ago, but it’s a reality. So rather than saying we should all move to one specific direction, one organizational chart, and have X percent of scope outsourced, we should look at what’s the right construct to demonstrate and stay close to the business and deliver value.
Great. I can’t believe we’re nearly at time — well, we’ve still got about 20 minutes to go, so we’ll keep this conversation going. I think we’ve touched upon most of the stuff, but this is one of the most interesting parts that I do want everyone to have a quick voice on before we end this session. With the big shift towards — sorry, not this one — it was about remote working, so let me just flip this forward a little bit. The shift towards remote working has been a big change, and it’s really impacted GBS, right? Does this mean GBS should really start to become the owner of the employee experience? It’s such an important part of the business, where many of these areas sit. What needs to change here? Maybe, Ian, you could talk a little bit about how remote working has impacted your firm and how you’re dealing with it.
Sure. Obviously, during COVID, we were actually in the middle of insourcing all of our work from our third party — and that’s just when it happened. We managed to get everybody hired. I told my managers at the time, please don’t hire anybody too far away from the office, because they’re going to have to come back at some point. I had a couple of managers who didn’t listen to me. But everyone did a great job — we were very, very productive, we did a lot of work. But there was no team; there were no interactions within team members. Everybody did a lot of good work, but not everybody was really very connected. So where we’re at now, we’re in an anchor-flex model. We have anchor days — Tuesdays, Thursdays, whatever it might be — and we’re flexible the rest. I don’t hold people to specific days. If you’re in an order-management team, is the sales team in that day? I want you to be very flexible in how you’re managing that work, and purposeful — it needs to have purpose when you’re coming into the office. Specifically for GBS, I want my GBS teams in the office on days when their stakeholders are in the office. That’s the direction I’ve been giving my teams no matter where they’re at, and so far it’s been working out pretty well — although I was in Islamabad several months ago, and the team came in and they were starting to introduce themselves to each other, and I’m like, OK, so you guys have never been in the office? Good to know. But we’re reintroducing that culture and the S&P way of doing things to everybody throughout the globe. So it’s been working out really well.
There we go. Jen — you’re obviously part of a huge organization with many different subsidiaries. Is there a genuine policy across J&J, or do you work to your own?
The J&J policy is set by country, so there’s flexibility around the days, and a certain remote day. But I’d say we’ve become more effective and more deliberate about peak transactional work — you may be better off at home — more deliberate about the culture, and really thinking through and embracing, and probably becoming even better at building culture and engagement, because we really have to think about it, versus just everyone showing up. And I think that drives a lot too — I think about site engagement, cross-functional location, whether it’s customer or people experience. I do feel GBS is the right group, with the right lens and skill set across change, to really lead a lot of the experience-related thinking at organizations.
Wow. And Tony Menezes — what’s it like managing one of the largest global BPO operations in the world, dealing with your own hybrid strategy and then your clients’ hybrid strategies? Is it getting harder, more complex?
Surprisingly, it’s given us a level of flexibility, to be very candid. There are some clients that want all their staff back in the office, especially the financial institutions, so we’ve obviously obliged them. But for those that have not set a policy, we’re giving our employees a level of flexibility. We are insisting on the teams coming together on the same day, because that does drive collaboration, teamwork and actually creativity that we want to get out of it. We still run agile at home — don’t ask me exactly how all the moving parts work when people are working from home, but we do still do that, all through COVID and all. I think this is something we have come to accept — it’s just going to be part of the dynamics of this workforce. We’re going to have to be very upfront with the folks we’re hiring that, career-wise, you’re going to be spending more time in the office and working from home, just in the way you’re going to be interacting with clients — and especially if you’re leading teams, you have to demonstrate that. But for the folks doing the transactional work, we’re going to let that have some flexibility based on the type of work and the type of sensitivity that clients have. We actually have a very open mind on how this will evolve over time.
And I think, Liz — final word on this. How do you advise your clients, based on everything you’re seeing, in terms of remote, hybrid, back in the office? What do you think is working more than not?
So what I’ve seen working — and it’s what we’ve adopted as well — within PwC, we’ve been asked to be in the office 50% of your time over a year. But I’m a consultant, so last week I was on the road in three different cities — that’s just the way you roll — and I’m obviously here today. Generally speaking, for our back office as well, our own GBS function, it’s the same guidance: we’ve asked for flexibility. I totally concur with the advice that’s been given. I have very few organizations that have said, yes, come in whenever you want to. For the vast majority, there have been some guidelines put in place — either X percentage of time, measured over whatever. I’ve got some organizations that have declared, you know, Tuesday, Wednesday, Friday everybody’s in the office, and we’re going to have specific collaboration sessions to achieve A, B, C goals or projects, and we’re going to focus on those days so that there can be intent and meaningful interaction in the office. What I have seen folks peel back from is encouraging folks, when they are in the office, not to spend the entire time on conference calls, because that kind of defeats the object of being there face to face. So folks are still trying to find the way — but I don’t have any clients in my portfolio that have said you will be back in the office five days a week. I think the flexibility is there and we’re still kind of figuring it out. I guess we’ll settle on it sometime in the next nine to twelve months, once we’ve been through a number of business cycles and worked out what makes sense for the organization.
I know — and, to your point, we also reconfigured the offices to be more team-collaboration space, versus just “go and sit at your desk again.” That’s a key part of actually encouraging people to come in.
Yeah — I mean, we used to go to the office; it was your social life. You met your other half, your partners, you’d go out — I used to go out drinking with the IT guys on the payroll. You went to work, and that was it. That’s what I think is missing: the actual work culture. We’re trying to keep the task culture going a bit more, but the actual work culture was something different. Now all these 20-year-olds are on dating apps and things, because that’s the only way of meeting people. Anyway, on that note — before we go off the deep end — really great conversation. It went in a very different direction than I thought it would, but I enjoyed it very much. So, Liz Evans, Tony Filippone, Tony Menezes, Ian Thompson and Jen Wang — brilliant, really enjoyed this. Thank you.
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