Now I love a buzz term as much as anyone (no surprise as I work in Marketing) but the latest term on the rise is the acronym for Global Business Services – “GBS.” I know you are thinking… not another one! The fact is it’s much quicker to write brochures, respond to RFPs and keep a blog short using these acronyms and this is why we see them become mainstream. What is really maddening however is they never seem to really be an exact fit for anyone. They do not convey a concise meaning that is so obvious you feel annoyed you didn’t think of it.
So, what is GBS? Well I think it is a clear evolution path for those organizations that have made it through the emergence of shared services as a transactional cost saving model and have now moved some financial processes to BPOs, changed to a hybrid operating model and then brought other business functions into the SSC to allow them to add new services into their portfolio. There was no way an acronym from multi-functional shared services would catch on so GBS emerged.
However, if you are not an organization with global businesses don’t worry GREAT BUSINESS SERVICES is even better in my book! In fact it should be the desired outcome. You know it makes Good Business Sense to provide services, particularly process driven services through a centralized function, and in reality any finance department in any organization, small to large has been delivering a good business service since the invention of double entry bookkeeping.
Hackett’s annual book of numbers for GBS highlights the cost advantages, the growing gap between the leaders and average performers and how moving up the maturity curve requires strategic top down thinking as well as bottom up action.
A new research report from PwC states that “A well-executed global business services strategy is distinctly different from the narrower focuses of shared services and outsourcing strategies. It identifies corporate objectives and encourages internal functions to collaborate with each other and third-party service providers to create breakthrough, strategic operational capabilities that drive business outcomes that can result in real marketplace differentiation and competitive advantage.”
There is evidence that some very large & very global organizations are seeing significant impact to the bottom line due to the ability of the GBS model to provide real-time information. As these leaders continue to prove the business case for investing in global services more of the large enterprise SSCs will get the investment required to develop talented people, standardize and automate processes and move them along the maturity curve. Of course we will need to coin a new acronym for the next phase of development, and there will be one!