Global Business Services and small to medium sized enterprises
Global Business Services (GBS) is a business model that consolidates and standardises business processes across an organisation to deliver improved services to internal and external customers. With this model, top performing GBS are integrating process end to end, creating digital centres of excellence and developing their people to take on more analytical work closer to the heart of their organisations. Often Business Process Outsourcers (BPO’s) are used to accelerate the journey and contract based on ‘outcomes’ generated e.g. quality / cost improvements.
The GBS model, once seen as the preserve of only the biggest multinationals, where thousands of roles could be consolidated and taken to remote locations is increasingly opening up to smaller organisations and we are now seeing a definite trend as smaller and medium sized organisations (revenue under £10bn) implement ambitious versions of GBS swiftly; transforming their back office functions and gaining efficiency, effectiveness and greater control over their operations.
Why is this happening?
There are a number of reasons for this trend:
• Experience: There’s lot of expertise to de-risk implementations and deliver early benefits as a greater number of experienced people become available on the market. Also, BPO’s and consultancies are keen to recycle the IP they have invested in with new clients
• End to end processes: The ability to look at end to end processes and improve the quality of services is leading to potentially greater scale being incorporated (e.g. order to cash rather than purely functional scope of receivables).
• Pooling Talent: Increasingly better performers are building expertise in process improvement, becoming centres of excellence for technology enabled improvements and rolling out analytical and other high value services. This makes it a greater priority for organisations to adopt the GBS model and maximise their use of scarce skills.
• Digital Technologies: Applying technology improvements from the GBS can lead to rapid adoption of new technologies across the businesses it serves, promoting standardisation and the adoption of best practice project management for technology roll outs.
• Remote Working: We have now seen how remote working has grown and re-locating services to be more remote may not be seen as such a radical change. Indeed, transitioning to a new location may be done more slowly with reporting lines changing first and natural attrition being used to reduce presence in high cost locations over a longer time.
• External Providers: BPO’s are broadly happier to work with smaller contracts, particularly if an organisations can show growth potential, a desire to transform and can contract quickly and reduce the cost of investment for the BPO
We therefore recommend: