Taking Global Business Services to the Next Level

For those who have not read my previous post, “Moving from Shared Services to Global Business Services,” let me provide a quick summary. Shared Services (SS) is an operating model that has been around for decades. It enables function-specific resources (i.e., HR, IT, Finance, etc.) to be leveraged across an entire organization, resulting in lower costs with agreed-upon customer-service levels. Around the time of the 2008/2009 recession, greater demands were placed on the SS operating model and what evolved was Global Business Services (GBS). The GBS operating model offers better efficiency, wider geographic reach, and broader scope coverage, to handle greater regulatory scrutiny for the same or even lower costs. However, there are some obstacles to overcome to ensure the full value of the GBS operating model is achieved… which is the focus of this post.

State of GBS

Multiple surveys and commentary have been published indicating the widespread and increasing trend of companies moving from SS to the GBS operating model. An annual survey by the Shared Services and Outsourcing Network (SSON), one of the largest communities of shared services and outsourcing professionals, stated that nearly 70% of the respondents operate as a GBS or multi-function model. Although GBS adoption continues, we have also heard of examples of GBS initiatives not delivering the “promised” return on investment (ROI). In the first year, most initiatives seem to deliver a respectable 7-10% ROI, but what is concerning is that according to Genpact, a global leader in business process management and technology services, “as many as one-third of all such transitions fail to ever achieve anticipated cost savings.” Unfortunately, from my network of peers in this space, I personally know of examples where this has occurred. There are several reasons for this occurrence, so let’s discuss a few of the major ones.

ROI Shortfall

Fundamentally, there are a few main reasons why a GBS transformation may fall short:

1. Aligned Strategy and Governance – Many companies do not take the time to have ALL key stakeholders agree to an overall GBS strategy and governance upfront. Executive commitment is key.

2. Direct Linkage to Desired Business Outcomes – Misalignment between GBS Leaders and Business Clients on priorities, and/or not being able to adjust quickly as market conditions change. Alignment to client priorities is key.

3. End-to-End Scope Coverage – Only portions of an “end to end” process like Order to Cash are moved into GBS, without accountability (or a voice) to influence the balance of the “end to end” process not moved into GBS. “End to End” process accountability is key.

There are a myriad of other operational, process and technological constraints that impact success. Some of those areas include limited technology investment, an unclear talent management and acquisition strategy, under-resourced service and client management capabilities, to name a few.

Improvement Areas

So, what can you do to ensure that your GBS is positioned to get to the next level? As with most any enterprise transformations, it is critical to have executive commitment prior to moving forward. However, for a successful GBS transformation it is even more critical to have the CEO/COO and all the business and functional executives onboard, due to the potential enterprise impact. Obviously, there may be situations where select businesses or functions may be deferred (or even excluded) due to business model conflicts, but these need to be managed carefully so as to not encourage others to “opt-out.” Other improvement areas include:

1. Strategy – Alignment upfront and on an ongoing basis between GBS and Business Clients is critically important to creating value. If that is done, GBS is off to a good start. Some key strategy elements to “hash out” include short/medium term vision, value proposition, roles and responsibilities, decision rights, and governance structure.

2. Governance – Many companies prefer to not have a separate governance structure for GBS, but rather to add the responsibility to an existing structure. I think that is a mistake in the beginning because it is critical to get this right at the outset. Good governance establishes a clear mandate for GBS, removes board members from operational issues, and develops a separate “client voice” when business complexity requires doing so. In addition, as the GBS/Client relationship matures the concept of an enterprise process owners board could be considered, to help drive even larger areas of business value.

3. Scope – The discussion of scope is a topic that is covered upfront as part of the strategy dialogue, and remains an ongoing discussion at the Governance Board. It should be clear what migrates to GBS at the start, over time (as long as ROI and business value commitments are achieved), and what scope still needs further dialogue. There needs to be continual dialogue to ensure alignment, and to minimize any strategy changes especially as executive changes occur.

4. Service Management – Experienced GBS operations (of a decade or more) all seem to have a well-developed service management capability and view it as critical to their success. This team is initially focused on driving a consistent service delivery strategy across GBS, communicating operational performance and business value in a consistent/branded fashion to clients, and coordinating all the behind the scenes KPI measurement activities efficiently. However, as the GBS matures, this team shifts to more of a “services marketing accountability” driving services strategy, design, M&A migration, and new service offerings jointly with operating leaders and business clients.

If the above items are implemented, the chances of a successful GBS transformation are significantly enhanced.

External Perspective

A few years ago, I attended a conference made up of Fortune 500 companies interested in trends and best practices for functions and SS organizations. A large Fortune 50 company who implemented GBS over 10 years ago delivered the keynote presentation. I was “blown away” by how GBS had transformed their company, and how its scope had grown from Finance and IT to non-traditional areas such as Logistics and Joint Venture support, as well as delivering tremendous business value along the way. When you see the potential of GBS in action, it can be a tremendous motivator! Please take advantage of the learnings from others to help accelerate your ROI. For me personally, I did leverage the learnings from select conferences but, I also proceeded to do plenty of targeted benchmarking. We engaged more than 25 companies, with many outside our home industry. The primary focus was to share best practices, but also to get a deeper understanding of GBS optimization methods, and exchange learnings on similar “pain points”. If you are trying to improve your GBS, in addition to the above recommendations, I wholeheartedly suggest utilizing the concept of benchmarking to get some “fresh” ideas.

Next Step

In this article, I have only “skimmed the surface” in how you can take your company’s GBS to the next level. So, in my next post (3rd in the series), I will focus on one of the key improvement areas and do a deep dive on the “Importance of Strategy and Governance.”

5 Tips for Success in a Service Industry Job

As more and more manufacturing jobs leave the United States in this era of global economics, we are becoming more focused on service-oriented industries. And as you would expect, the keys to success in service industry jobs differ slightly from jobs in a factory. Here are five things you need to remember to thrive:

The Customer is Always Right: When it comes to service, the customer is always right. The business you’re employed at is there for the customer and he or she sets the terms. If their request is within the realm of the services your business offers, it’s up to you to ensure they’re satisfied.

Stay Positive: No matter how bad of a day you’re having, it’s your job to initiate a positive interaction and create and uplifting atmosphere for the customer. Stay confident and cordial while putting all personal problems out of your mind. This is easier said than done, but it’s essential to generate revenue.

Know Your Services: It doesn’t get much more embarrassing when you’re asked a question and you either freeze or utter those dreaded words, “I don’t know.” You are the resource for the customer or client: know both the essentials and the information that gets asked about most frequently. And most importantly for maintaining good appearance, never say “I don’t know.” Always say something like, “Let me check on that really quickly,” or, “That’s something I’ll have to look up. Just a moment please.”

Look Good for the Boss: I have a friend that worked in the tourism industry for an Alaska summer job a few years back. One of his most embarrassing moments was when he coordinated a ride for a couple to get to their hotel only to find out afterwards that he had just called a taxi car for the CEO. He should have gotten some special treatment and, at the very least, gotten a company car to drive him and his wife. It might sound unfair, but going the extra mile for the owner or CEO of your business is certainly good practice to earn a promotion, a raise, or at the very least positive feedback.

Be Yourself: You might have a dress code, but don’t let that stop you from letting the positive parts of your personality shine while you work. If you have the emotions of a machine while you’re on the clock, customers will notice. Put your personal spin on your job and run with it.

Attorneys and Business Services

An amazing trend over the course of the past few years – which is starting to accelerate even further – is the number of people who are going into business for themselves. This includes people who are involved in small businesses, Internet based businesses and home based businesses. If you are involved in a business of your own of one kind or another, or if you are interested in starting such a business enterprise, you will want to connect with an attorney that can provide for you appropriate business services.

Through this article you are provided an overview of what you will want to keep in mind when it comes to finding an attorney that can provide you the legal services that you will require in relation to your own business enterprise. Armed with this information you will be in the best possible position to make wise, informed and educated decisions in regard to your business venture and the legal needs of that business.

Initially, when it comes to selecting an attorney that can provide you with the legal services that you will require for your business you definitely will want to get an expert and specialist in the field. In the final analysis you cannot afford to put your business and the services that you will require in the hands of a lawyer who does not have the specific expertise that you will require.

You will also want to bear in mind that when it comes to attorneys that can provide legal services to you that there are lawyers who have now become specialists. By this it is meant there are lawyers who specialize in providing legal services to businesses in a particular industry. The fact is that the legal needs of businesses in different industries can be varied -indeed, in some instances, extremely different. Therefore, if you are in need of legal assistance relating to your business operations you would be best served by working to see if there is an attorney available who can provide you legal assistance specific to the industry in which your business is a part.

Another issue that you will want to keep in mind is that many people who are involved in owning or operating business with engage a lawyer for an extended period of time to care for all of their business related legal needs. The fact is that when running a business a person continually will find his or her self dealing or confronting legal matters and issues of different types. Therefore, having a regular attorney that can be turned to as needed can be extremely helpful.

Finally, if you are only now in the process of working to organize a business you will want to seriously consider getting an attorney involved in the process sooner rather than later… By getting an attorney involved in the organizational process when it comes to your own business venture you will be able to avoid mistakes and complications that can arise in the absence of legal direction, advice and assistance.