Introduction
The Global Business Services (GBS) organization model represents a strategic approach to centralizing, standardizing, and optimizing business processes across an enterprise. As organizations evolve their operational frameworks, the GBS model has emerged as a critical construct for driving efficiency, transformation, and value creation. This article explores the key components, evolution paths, and considerations for implementing an effective GBS organization model that aligns with business objectives and creates sustainable competitive advantage.
Foundation of the GBS Organization Model
Defining the GBS Construct
GBS is not just about process standardization, automation, or offshoring. It is a construct to drive business transformation and improve how companies operate internally. The GBS operating model emphasizes moving work into GBS, stabilizing it, standardizing processes, and scaling operations. The differentiators for high-performing GBS organizations include defining end-to-end metrics, leveraging sourcing effectively, driving innovation, and embedding GBS into the business.
Core Elements of a Professional GBS Model
A professional GBS model enables organizations to transition from being part of the BPO industry to operating as an internal consulting powerhouse, delivering transformative value to the business. The professionalization of GBS involves centralizing processes, eliminating silos, and creating a single accountable organization focused on delivering business value through operational excellence.
A consistent operating model across pillars (e.g., finance, HR) is critical for GBS success. Establishing common capabilities, such as a GBS Academy, and running GBS as a business with unit pricing and value creation goals are essential steps. This model ensures alignment with organizational goals and sustained success.
Organizational Design Evolution
Maturity-Based Organizational Structure
Organizational design in GBS must evolve with the maturity of the organization, transitioning from siloed structures to integrated models that enable horizontal collaboration and innovation. The maturity of a GBS organization significantly influences decision-making around scope and operational dynamics. As organizations mature, they develop the ability to integrate technology, work processes, and change leadership, which positions GBS as a critical enabler of business transformation.
Symptoms of a poorly designed GBS structure include inefficiencies, redundancies, and a lack of accountability. Addressing these issues requires a clear governance structure and a focus on continuous improvement. A strong governance and control system ensures the quality and efficiency of GBS operations.
Dynamic Organizational Renewal
GBS must embrace change as a core principle, regularly revisiting and refining its organizational design to align with evolving business needs and industry trends. Organizational design should be dynamic, evolving every two to three years to reflect the changing scope, skills, and maturity of GBS, ensuring it does not become static or commoditized.
The strategic intent of organizational design in GBS is to establish a structure linked to the right capabilities, aligned with organizational objectives and targets, and adaptable to changing needs and maturity levels.
Horizontal Integration and Functional Alignment
Breaking Down Silos
Organization design in GBS should prioritize horizontal alignment across functions to maximize scale, efficiency, and end-to-end process optimization. This approach ensures better control and value creation. The success of GBS depends on its ability to operate as an open market ecosystem, running as a business and proactively offering solutions that align with organizational priorities.
A key tension in shared service center design is balancing deep functional expertise with the ability to manage end-to-end processes across functions. Mature GBS organizations strive for end-to-end process management to deliver holistic value.
End-to-End Process Focus
GBS leaders must think end-to-end rather than in silos, focusing on general management skills rather than functional or technical expertise. End-to-end service management is critical for addressing inefficiencies between silos, enabling GBS to drive greater value and transformation across the organization.
End-to-end process management is a unique value proposition of GBS, enabling the elimination of unnecessary touchpoints and accelerating cycle times. GBS leaders must focus on end-to-end work processes rather than siloed functional responsibilities. This approach unlocks innovation and value by addressing inefficiencies at the seams between functions.
Client and Service Management Structures
Client-Centric Design
Organization design in GBS must support end-to-end service delivery and enable horizontal integration across functions. It should include supporting structures like GBS finance, HR, and IT. Organizational design in GBS should be client-focused and outcome-driven, ensuring that the structure supports the desired results and aligns with the needs of the business.
Implementing a client management structure involves resourcing appropriately, starting with use cases to demonstrate value, and fostering alignment between GBS and business units through joint business plans. A formal client management structure is essential for effective GBS operations, with roles and responsibilities clearly defined to ensure alignment with organizational needs.
Service Management Framework
Service management in GBS involves understanding the ideal state for clients and users, defining a value proposition, and creating artifacts like service charters and catalogs. These tools help align services with business needs and drive continuous improvement.
Service management should be treated as a product, with clear strategies, cost models, and a focus on continuous improvement. Appointing a dedicated service manager is a foundational step to ensure accountability and innovation. Establishing global service managers ensures accountability and consistency in delivering end-to-end services across locations.
Talent and Reward Systems
GBS-Specific Talent Management
The HR needs of GBS differ from those of the parent organization, requiring specialized expertise to address challenges like high attrition rates and the unique dynamics of the BPO and consulting industries. GBS leaders must understand that HR practices for GBS are distinct from those in other functions like finance, HR, or IT. It is essential to coach HR partners to develop competency development plans, career pathing, and reward systems tailored to GBS needs.
Career paths and governance structures should be established to make GBS an attractive and developmental place to work, fostering continuous learning and development. GBS is increasingly seen as a talent development hub for organizations, fostering skills that are in high demand as companies evolve their business and operating models. This dynamic environment makes GBS a breeding ground for future leaders.
Reward Systems Alignment
Reward systems in GBS should drive the right behaviors and culture. They must include GBS specific competencies, such as service management and client engagement, and support career development. Organization design in GBS must support the long-term development of capabilities, including reward systems and career paths that attract and retain talent.
Reward systems in GBS should be intentionally designed to foster a culture of responsiveness, agility, customer centricity, and innovation, aligning employee behavior with organizational goals. Reward systems in GBS should go beyond transactional labor. They must demonstrate upward mobility, career growth, and recognition of employees as high-potential contributors rather than unskilled labor.
Running GBS as a Business
Business-Oriented Operating Model
Running GBS as a business requires a clear operating model. This includes standardizing structures and processes to move beyond legacy systems tied to individual functions. GBS must establish a financial model that mimics open market systems, providing transparency and accountability for costs while enabling benchmarking and continuous improvement.
The concept of running GBS as a business, with a commercial mindset and a focus on delivering value, is a transformative approach that can elevate GBS’s role within the organization. Running GBS as a business involves understanding market share, adoption, and pricing aligned with value. Leaders must continuously evaluate the business model, strategy, and capabilities to ensure alignment with company needs.
Financial Model Integration
Financial management in GBS includes transparent pricing to shape user behavior and align costs with value delivered. Financial management in GBS should focus on value creation rather than just cost reduction. Establishing baseline pricing and demonstrating cost reductions through analysis and procurement strategies are essential steps.
GBS must establish a financial model that incentivizes innovation. Savings from automation and efficiency should be reinvested into new capabilities and services. A strong financial model is a key driver of GBS success. It enables the organization to clearly articulate its value to the business, avoid misalignment, and build credibility with stakeholders.
Transformation and Innovation
GBS as a Transformation Engine
The future of GBS lies in leveraging technology to drive transformative change, positioning the organization as a strategic enabler rather than a cost center. GBS leaders must take ownership of at least one-third of the company’s digital strategy, focusing on smart digital operations to drive transformation.
GBS leaders must position their organizations as transformation engines for the company. This involves combining technology, work process expertise, and change management to deliver breakthrough value. GBS must position itself as a change agent within the organization, role modeling continuous improvement and fostering a culture of innovation and adaptability.
Innovation Ecosystem
Building an ecosystem of innovation involves three components: experienced operations leaders, startups for cutting-edge solutions, and IT/BPO partners for scalability and execution. The 70-20- 10 model, adapted from Google, can guide GBS resource allocation: 70% on operations, 20% on continuous improvement, and 10% on disruptive innovation. The exact percentages may vary but having a structured approach is key.
GBS must adopt a venture capitalist mindset for innovation, focusing on killing non-viable projects quickly and investing in those with high potential. Building an ecosystem of partners, including startups, IT providers, and venture capitalists, is essential for driving disruptive innovation and leveraging external expertise.
Conclusion
The GBS organization model represents a strategic approach to centralizing, standardizing, and optimizing business processes while driving transformation and innovation. An effective GBS model balances horizontal integration with functional expertise, client-centricity with operational excellence, and cost efficiency with value creation. By embracing a business-oriented mindset, evolving the organizational design as maturity increases, and fostering a culture of continuous improvement, GBS organizations can position themselves as strategic partners and transformation engines for the enterprise.
As organizations face increasing pressure to adapt to changing market conditions and technological disruption, a well-designed GBS organization model provides the foundation for agility, efficiency, and sustainable competitive advantage. The journey to a professional GBS organization requires clear leadership vision, commitment to organizational evolution, and a relentless focus on delivering measurable business value through operational excellence and innovation.