Are we at an inflection point?

McKinsey make 6 recommendations for GBS leaders for these changing times.

For businesses around the world, the past two years of turmoil and change have challenged us with some new demands.

GBS has proven itself to be a critical enterprise backbone, delivering a range of support functions, and demonstrated an unexpected level of agility over the past 22 months.

Expectations continue to rise, with stakeholders expecting ever greater efficiency, improvements in service effectiveness, accelerating automation, elimination of unnecessary tasks and creation of more self-service interaction for internal and external customers (and suppliers).

One key challenge is to determine how work will evolve to incorporate more work-from-home arrangements while continuing to deliver value AND driving enhanced collaboration and innovation.

New, distributed ways of working whilst transforming processes end to end will become the norm rather than a one-off response to a crisis.

Digitization is taking center stage as customers express preference for digital-first solutions, requiring us to redesign processes to support that digital-first model and integrate a globally distributed workforce, wherever they may be.

At the same time, end-to-end process optimization is the key strategy to drive speed, efficiency and enhanced customer value. But this requires true collaboration and is a thorny challenge. Many organizations have been disheartened by the early hurdles.

GBS is already facing a flood of data from digital processes. The challenge is how to approach the data opportunity. It is NOT a technical problem.

So, are we at an inflection point?

McKinsey suggest six themes that can help GBS organizations navigate these challenges;

1. Scope: Integrating business, digital, and operations strategies. As global-delivery models and expectations converge, it can be difficult to separate business strategies from digital strategies. Some organizations have found quick work-arounds to digitize operations at times, often using point-automation solutions This type of ad hoc solution tends to generate even more problems over time, impeding scalability.
2. Footprint: Segmenting scale. Economies of scale continue to drive efficiencies, but they aren’t a sufficient solution for all business needs. Segmentation is key. We must adopt newer ways of working, such as agile delivery models and design thinking, based on a much deeper understanding of user needs.
3. Sourcing: Integrating service as a true business partner. GBS leaders may need to rethink traditional patterns and received wisdom. Tech-enabled start-ups, for example, could help introduce new capabilities fast.
4. Target: Customizing solutions for each function. As we continue the drive for standardization and automation, customer needs will become increasingly bespoke, with customization specific to each client function’s requirements. If this sounds like a conflict, think about the automotive industry!
5. Talent: Reorienting talent management. Access to the right talent is undoubtedly critical to transformation. Up-skilling is cheaper than replacing staff and drives higher productivity and throughput from the retained workforce. Improving people’s technical capabilities is just part of the task. Today’s volatility means that organizations also need to focus on humanistic “soft” skills and habits, such as curiosity, critical analysis and “deep communication”.
6. Transformation approach: Leading/executing innovation. Many GBS organizations are beginning to make better use of data and process-mining analytics to drive detailed activity insights. However, the majority we have seen are restricted to basic use cases, such as standardized reports and descriptive analytics that drive information “drill downs,” leaving much of analytics’ value on the table. We need to develop more ambitious solutions that help in assessing root causes.

Rapid digitization and the disruption of the past couple of years have created unique challenges and opportunities. 

GBS organizations must continue to support and be the the catalyst for change, scaling up their transformation agendas for the near future.

You can read the original McKinsey article here . . .

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