Moving from cost to value: The agile framework for Global Business Services
Changes in the cost-benefit equation—driven by new technology and a changing, unpredictable labor market—are altering the way companies think about how and where they deliver services. As companies evaluate what's core to their businesses, they are focusing more on the changing technology, data and talent landscape. This means automation and upskilling play bigger roles in the modern framework for Global Business Services (GBS) to solve not only for cost, but quality and innovation.
What is Global Business Services (GBS)?
Global Business Services describes the different types of organization models a business can use to deliver enabling services, including shared services (business-owned and operated), outsourcing (3rd party owned and operated), Centers of Excellence, Hybrid and automation. Services can include both back office support functions (finance, HR, IT, procurement, legal, tax) and front office, customer facing functions (customer service, call center, engineering, R&D).
There is no one size fits all approach- GBS can employ a number of levers depending on the company’s culture, industry, and business dynamics.
The GBS Journey
As organizations have matured, we have seen a move from siloed functional shared services or outsourcing, to today’s more holistic end-to-end process lifecycle. The rise of digitalization enables GBS to provide value-added benefits that are as important as lower costs. Centers can incorporate automation, visualization, analytics, and other digital tools to develop more effective ways to support the business. Where technology can automate low-complexity activities, there is an opportunity to retrain and refocus your people on more value added areas. GBS has become a valuable partner and capability, rather than simply a transactional processing center.
“At the end of the day, it comes down to three key concepts: partnering to bring the right value proposition; upskilling to focus on more value-added areas; and flexibility that enhances the employee experience.”
PwC is here to work with YOU
Our PwC team is uniquely positioned to work hand in hand with clients to support their Global Business Services journey by bringing 1,500+ professionals in over 30 countries with operational, functional and technical expertise to each transformation, from strategy through execution.
The following are key capabilities to accelerate your organisation’s service delivery transformation at every phase. Your approach will depend on whether you plan to outsource to an external party or create captive shared services within a lower-cost area. Here’s a closer look:
PwC's Global Business Services 2023 Study: Catalysts of value
Trust in GBS organizations is growing. Parent companies are increasingly entrusting GBS with more complex tasks, which is why transactional service centers are often supplemented by specialized centers of excellence (CoEs). Originally established as competence centers to improve processes and consolidate process knowledge, we are now seeing companies using CoEs as a driving force for the introduction of new business models, the initiation and development of new products and service offerings and as a spearhead for general innovation.
This study is the seventh in a series of publications produced every two years. The survey on which the study is based was conducted from March to August 2023, and included companies throughout the world and from a wide variety of industries. The results cover more than 300 shared service centers, enabling us to provide a comprehensive overview of the status quo, current developments, existing challenges and upcoming challenges. The study also covers relevant topics like further development regarding location strategies, GBS as digital pioneers, how outsourcing remains rare and the search for qualified staff.
5 Phases driving your service delivery transformation
Phase 1
Assess your strategy
Here’s where you’ll need to assess the right strategic approach, which will involve collecting and validating current time and cost data to help build your business case and guide your decision-making. Evaluate what operating models work best for your organization, including alternatives, such as automation, captive shared services, outsourcing or a hybrid of these options. This strategic phase is not just for organizations brand new to GBS- it’s also for companies evaluating their current operations and seeking to take it to the next level.
Phase 2
Design your process and organization operating model
Now that you have defined a strategy, it’s time to construct the structure of your future organization. Regardless of which operating model you chose for the future state, you will need to develop process maps and a detailed organization model. Perform due diligence on the location or outsource provider, and develop an implementation plan that includes a communications strategy to continually engage with key stakeholders, both internal and external customers, through your organization’s transformation.
Phase 3
Execute your transformation
Once your future state is designed, you will need to operationalize and build out the facilities, IT and other infrastructure. For both outsourcing and shared services, it will also be critical to create a governance and performance strategy to share important details of the project, including severance, retention, relocation and rebadging.
Phase 4
Implement your vision
The work you put into your strategy will drive the implementation. You are executing your transition plan, including standing up the new captive shared service center, onboarding key talent and making sure measures are in place to capture and transfer their knowledge. Not everything about your organization will go away, so it will also be critical to implement the service levels and performance management frameworks that your organization decides to keep. If you’re outsourcing, conduct due diligence on service providers/vendors and strategically negotiate the contracts before awarding RFPs to service providers and developing an implementation strategy.
Phase 5
Continuous improvement model
Your journey doesn’t end after implementing. There’s more to learn, and in this phase you should track, monitor and proactively manage GBS performance and resolve issues. This could include reassessing shared services and outsourcing relationships, reviewing service delivery and managing ongoing initiatives to improve your organization. For organizations that are outsourcing, this is where you should plan how you’ll renegotiate contracts, assess renewal options or consider a contract exit.
The Benefits of Getting it Right
- Increased alignment and collaboration across functions
- Greater consistency of customer, supplier and vendor experience
- Increased productivity and consistency through end-to-end global processes
- More time and resource to focus on running the business
- Improved visibility over cost consumption and behaviors
- Increased compliance, scalability, and flexibility
- Creative and innovative methods of achieving business value
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Finance Transformation Leader, Southeast Asia GBS Leader, PwC South East Asia Consulting, PwC Singapore
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