How GBS serves the global business

GBS is a term of art. It can mean different things to different companies. But when it’s truly evolved, it runs end to end, it encompasses multiple processes, it is automated, and it’s one organization. It can be an operational construct, like I just described it, or more often it is an organizational construct. That basically entails taking on the back-office operations of every function and putting it under one leader, but without ever breaking down the silos—a lift and shift. Today, most GBS organizations today are organizational constructs, not operational constructs.

You could put almost any process in a GBS. There’s a large drinks company that makes tequila, but there aren’t enough agave farmers, so they have someone traveling around Mexico to sign up new producers, and the GBS organization now runs a unit to figure out how to pay them in cash. I have a client who’s got an ambition to put 61% of all the corporate processes the company runs into the GBS.

Not often, because most companies are still focused on the organizational rather than the operational GBS construct. The kind of operational transformation that’s necessary takes investment. And remember, the initial impetus behind the GBS model, although we’re moving away from this, was labor arbitrage. Let’s move jobs from Des Moines to Delhi. Then the focus shifted from moving where the work was done to improving how it was done, harnessing Six Sigma, continuous improvement, and similar tools. Next it was about getting more insights out of the work, and later, how can we automate the work. Today, the buzz is about end to end.

As ESG regulations take effect, companies are going to be obliged to report. GBS organizations will have to look at not only their own ESG impact, but how they manage reporting for the corporation. There are GBS organizations that are starting on that journey now.

I think GBS organizations have an opportunity to help recession-proof their companies. They can support customer retention, which is probably going to be an issue in some sectors during a downturn. They can help reduce the churn of talent and the costs associated with it. GBS is well-positioned to help companies figure out how to navigate a recession.