It’s Time To Re-examine The Traditional GBS Model
What Albert Einstein said many years ago that “Not everything that can be counted counts, and not everything that counts can be counted”, is aptly true for the GBS model has been in existence for over two decades.
In this traditional operating model, operational processes are managed by a central team, leaving the business to focus more time to engage with customers, deliver growth and customer satisfaction. Traditionally, GBS teams have been focused on cost drivers, error free SLA delivery, turnaround time and quality of service delivery across multi-functional areas including IT, HR, P2P, O2C processes. However, this model is increasingly coming under the radar. Enterprises are reexamining this model for its relevance as a result of several factors including:
- Increasing stakeholder expectations for unprecedented turnaround, led by changing customer expectations.
- Digital technologies that now allow business units to deliver with efficiency and accuracy, thereby questioning the need to centralize versus keeping processes close to the geographical units.
- Ability of the GBS to attract and retain good quality talent who come with strong process understanding coupled with service delivery skills.
- Complexity of governance leading to slow response to change or ability to support innovations.
As a result, GBS organizations are investing more attention to reexamine and create more relevant value drivers in the form of delivering superior business outcome, process agility and quick decision making. Cost reduction and process standardization is table stakes. What truly counts now for the GBS is its ability to support business to drive enterprise growth with superior experiences that makes it compelling for their stakeholders to engage with this enterprise.
Several GBS organizations are increasingly finding ways to:
- Define and execute a comprehensive procurement strategy that leverages deep insights from their existing vendor relations and ensure that they don’t miss out any new vendors, who may be delivering best in class products and services for their nature of procurement.
- Support their manufacturing team to maintain optimal inventory levels tied into their customer contracts and order pipeline. Create competitive advantage by finding a way to create vendor managed inventory.
- Support superior working capital management by very tightly managing receivables and payables.
- Deliver predictive insights to business in the form of HR attrition, days to close, cost per invoice, outflows due to travel etc.
- Expand their scope to include services such as supporting salesforce with research and customer information, customer referencing programs etc.
They’re looking at delivering all this in the shortest possible time and with the most optimal investment. This is possible by leveraging technologies in a way that supports error free and agile processes.
Several GBS organizations are also looking to increase the scope of their offerings to include several complex functions like strategic planning, treasury, legal and compliance and deliver these functions at superior outcome by leveraging technologies like machine learning, AI etc.
Some key value drivers include:
- Laser focus on service excellence: GBS organizations are re-looking at their customer centricity and service excellence metrices to determine how they could create value by putting together a more innovative and relevant stakeholder satisfaction program in the context of their emerging needs. In this era, where customer stakeholders are used to avail on a self-service, on-demand model, they are increasingly demanding the same experiences from their back office functional units. GBS organizations are increasingly looking at an outside-in perspective as they relook at their operating model, to deliver stakeholder centricity by leveraging technology. Chatbots, AI, RPA and cognitive computing are being leveraged to work with the existing landscape of technologies and deliver superior experiences.
- Continuous improvement mind-set: GBS is no longer working on a ‘fix-it once’ approach. The COE’s within GBS is looking at continuous improvements by constantly reassessing the current state in terms of what is working, by taking continuous feedback from their stakeholders. Even small, but corrective and timely actions could bring about tremendous value realizations in the form of agile business processes and more satisfied customers. Translating these changes to tangible, executed front line actions will include continuous feedback, training, change management and continuous engagement across functional units that the COE team focuses on.
- From transactional to predictive: GBS is moving from a more reactive to a proactive role wherein they’re able to provide predictive insights to their functional stakeholders. GBS organizations are relooking at the success metric to determine the most relevant set of metrices that is reflective of the changing expectations. Metrices that not only reflect their past performance, but also include elements of impact delivered to business as a result of providing predictive insights are being strongly considered. Examples of such metrics include machine learning tools to predict say additional working capital requirements, financial forecasting, talent needs, one-time vendor payments and lost discounts. Clearly no one size fits all can work in determining the success criteria. They’re therefore making this as closely reflective of their industry and business as possible.
- Increasing focus on self-service capabilities: Offering self-service capabilities dramatically improves stakeholder experiences and brings down the cycle time to processes. GBS organizations are putting together tools such as portals, chatbots and information management solutions where requests could be initiated online, status on transactions could be viewed on the go and processes are automated from receiving of requests to its ultimate closure and periodic feedback loop initiated to the requestor from time to time. One of the GBS has for instance put up a natural language processing engine that reads free text and pushes to a cognitive bot to take necessary action.Filling the skill gap: To achieve these new set of objectives, the GBS organization would need to define the skill gap and re-skill its people to focus on delivering outcomes versus focusing on delivering tasks. This requires a cultural reorientation wherein the GBS team must be brought fully on-board to the new thinking and cultural expectations. This is possibly harder done than said as it entails taking ownership by team members rather than just achieving tick marks on activities. Also, the GBS team must evaluate its digital capabilities to determine what additional skills are required and how those could be fulfilled.
GBS organizations must evaluate their relevance in the changing business environment, where digital and expectations of increased agility is forcing them to consider their existing models and make it more relevant to business. Making cosmetic changes is not enough – GBS organizations are questioning status quo to make notable contributions to business.
Cost as a driver is considered table stakes. They are expected to drive business outcomes in terms of quick decision making via tangible insights, improving operational efficiency while getting closer to customers. They must be viewed as a significant value driver for success and it is possible only if the GBSs reexamines and puts in plan a structure that creates significant competitive advantage.
As Japanese businessman, Taiichi Ohno, better known as the father of the Toyota Production System, stated, “All we are doing is looking at the timeline from the moment a customer gives us an order to the point we collect the cash. And we are reducing that timeline in the value stream by removing non value-added wastes.”
There are unprecedented opportunities for GBS to add value to business. Cutting edge GBS teams are in the midst of actively encashing these opportunities.
(The author is Founder, Director – Avaali Solutions Pvt Ltd)