While the Global Business Services (GBS) ecosystem has matured with more than 10,000 centers around the world, the growth potential is still immense. The projected growth of the industry from USD 1.8 trillion in 2022 to USD 2.5 trillion USD by 2025 is a reminder that GBS remains an important component of the value equation for global enterprises.
The latest report by the Boston Consulting Group (BCG) titled, “GBS: Yielding the Butterfly Effect” talks about the repositioning of GBS centers as global talent hubs leading transformation and business outcomes for the enterprise.
The report findings are based on the GBS Leadership Survey 2022, conducted by BCG with a focus on three key objectives: 1) Identifying the overarching trends in GBS transformation, 2) Analysing the shifting trends for GBS post-pandemic and the roadmap for growth, and 3) Identifying the key challenges faced by GBS leadership. The survey drew participation from GBS senior leadership across the industry supporting organizations based out of North America, Europe & APAC. The white paper presents findings from the survey responses coupled with GBS topic expert interviews, secondary research & internal BCG perspectives gleaned through quantitative research backed by qualitative insights.
Through case studies, insights from GBS leadership & survey data points, the report shows GBS centers can create exponential value for their parent organizations in five key areas:
- Driving customer centricity: The survey indicates that approximately 85% of GBS organizations already believe that their focus on customer orientation has improved, as compared to the earlier focus on just cost efficiency
- Managing business-critical processes: GBS organizations are also taking a leading role in managing end-to-end business critical activities, which involve outsourcing on behalf of the parent company. Today, around 80% of GBS centers outsource standardized services which are not business critical and have no industry or company-specific requirements. Additionally, approximately 85% of GBS companies now follow a predefined and comprehensive partner selection process
- Leading the way in Next Generation Ways of Working (NWOW): Remote & hybrid working models have become a reality in the post COVID world. GBS centers have become essential catalysts in supporting this change by creating the necessary IT infrastructure to run applications, training employees in new ways of working & enabling team collaboration through centralized cloud-based systems. Further, GBS organizations are also helping the enterprise redesign HR policies to ensure efficiency, flexibility and safety in the modern workplace.
- Building capabilities in new age technologies: As new age technologies disrupt traditional business models, enterprises need to be ahead of the curve to identify & build capabilities in technologies that hold future potential for the organization. With the right mix of domain expertise and a workforce with the necessary technology skillset, GBS organizations find themselves in a unique position to drive the transformation agenda for the enterprise. The survey identified artificial intelligence & hyper-automation as two core-capabilities being built by GBS centers.
- Fostering innovation: GBS organizations have become a breeding ground for innovation. Establishing CoEs to focus on key topics aligned with the enterprise’s strategic vision has gained traction as a way to institutionalize innovation. In fact, 75% of GBS centers have established 3 or more new CoEs (size >50) in the past 18 months with AI, climate & sustainability emerging as key focus areas.
The report also identifies critical obstacles faced by GBS leaders. In the unrelenting race to remain relevant, standing still is not an option and the paper discusses various strategies to navigate through this sea of challenges.
Rajiv Gupta, Managing Director and Senior Partner, BCG India, said, “The Global Business Services (GBS) ecosystem presents a multitude of opportunities to grow and create value. In this era of constant change, GBS centers remain an important component of the enterprise value equation – by being customer centric & innovative, yet underpinned by the fundamentals of business critical processes, new age technologies and an ever evolving talent pool shaping the next gen ways of working. Standing still is not an option and this paper provides a roadmap to enterprises & their GBS centers on the five key themes where value can be curated, and the challenges in their way.”
Global Business Services (GBS) can alter the growth trajectory of global organizations, change the principles of ownership, talent, innovation and governance, while still improving efficiencies. They must steer away from the traditional center and FTE counts as a proxy to success, and craft a talent proposition that marries brand, gig friendly talent models, and established career progression approaches to drive innovation and knowledge management. The survey has identified an immense opportunity for the leadership of the parent organization and GBS to collaborate and craft the ‘Next Normal’.
A copy of the report can be downloaded here.