GBS Models: Improving Performance and Reducing Costs

Many successful companies gain market advantage, operational efficiencies, and flexibility via a leaner, focused, and more nimble services organization. To achieve the full extent of these benefits, leading companies leverage a Global Business Services (GBS) model.

GBS models differ from traditional shared services models, as the company must consider how support services will be provided to every site in the enterprise regardless of global location or organizational boundaries. Therefore, companies gain even more advantages in end-to-end process efficiency, IT infrastructure, and scale by strategically examining where services can be shared globally, regionally, or country-specific. Most
GBS models leverage shared services and outsourcing to deliver effective and efficient services to internal customers. In addition, the best GBS operations rely on optimized end-to-end processes, technology, performance management, and governance to ensure top performance. GBS models provide numerous benefits, including additional standardization and control, scalability to support acquisitions and additional staff capacity in headcount-constrained organizations.

The critical first step in setting up a successful GBS model is developing and deploying a clear and meaningful global strategy. Our clients, who are most successful at shifting to GBS operations, develop a global strategy even before launching their first regional services and use this strategy to guide their global rollout.

While many USA-based companies choose to launch GBS headquarters initially in the United States, successful organizations ensure that early shared services operations address enterprise requirements. Thus, future expansions can occur without reinventing operations.

A GBS model will most likely require an organization to rethink the locations where it provides support services. Companies are finding that transactional activity can be centralized to extend globally or regionally in low-cost locations. Due to legal, cultural, and language differences, customer-facing interaction is best accomplished regionally or by similar country groupings. Centers of Excellence may evolve anywhere, but the challenge is to connect these to a central GBS organization more efficiently. A Global Business Services example is depicted in the pyramid below.

A GBS model is more than just a shared services model that requires corporations to step outside of normal organizational boundaries to create the most effective model for the enterprise. You must evaluate a GBS strategy across multiple support functions and numerous company sites to unlock maximum value from your GBS platform. By doing so, the GBS model can help you realize savings, optimize your service delivery, and quickly adapt to changing global market conditions.

Contact us and learn more about ScottMadden’s view on GBS Strategy and Modelling.