A Global Business Services ('GBS') model incorporates activities that are retained, either as corporate functions or within individual business units, and processes that are handled centrally. Those processes that are centralized are typically delivered from low-cost jurisdictions, whether as Global Capability Centers or through a third-party outsourcing provider. The activities in scope typically include finance, human resources ('HR'), procurement and information technology ('IT'), but can also represent functional activities such as claims handling or mortgage processing. Driving competitive advantage, including incorporating artificial intelligence, requires a holistic approach to the process delivery model. Unfortunately, many companies have focused on only part of the model and omitted to focus on what is retained.
Our view is that best-in-class retained organizations will become the strategic partners of the business on a day-to-day basis, with the centers of expertise driving robust, cost-effective transaction processing with real-time reporting, using the benefits of technology to enable better business decision-making. The design of the retained organization should address key issues such as process design, staffing, technology application and governance of centralized delivery. This is a wide-ranging brief, and securing adoption of this part of the environment is critical to overall success.
Opportunity is available for most companies, and the limiting factor is creating and implementing a bold vision.
Originally Published 4 April 2024
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