Global Business Services (GBS) Challenges & Opportunities.
Having spent an intense 36 hours at the Shared Services & Outsourcing Week (SSOW) conference in Lisbon last week, it seems only reasonable that my thoughts turned to the progress, successes and challenges of that unique organizational beast, Global Business Services (GBS).
The conference was a gathering of GBS peers across industries and geographies, largely facing the same challenge, that of how best to maximize the business value created by GBS for the host/parent company.
There was a broad set of discussions, workshops and presentations covering;
- “Value Creation” and cost efficiencies
- What “transformation” actually means
- The role of the “customer” and other stakeholders
- “End-to-end” integration
- Process excellence
- The role of the Global Process “Owner” (GPO)
- Talent & skills
- Location strategies
- Finance & HR evolution
- Operating models
. . . . and yes, of course, AI in all its forms (Generative, Analytical, Causal, Agentic . . ) and its relationship to, the often ignored, HI (Human Intelligence). 😉
For my sins, together with Steve Fox, I ran a surprisingly well attended and interactive (it started at 8am!) workshop on “Delivering Business Value through End-to-End Processes and the GPO”.
The venerable Tom Bangemann, regarded as the “founding father” of Shared Services and GBS (he even wrote the first book on the topic, before I was born . . ), delivered a much-awaited talk on the “Shared Services & GBS State of the Industry” based on the SSON Research & Analytics surveys that Tom curates so effectively.
Tom is Head of Data, Development & Research SSON Research & Analytics and covered some important topics in his usual light-touch manner.
- The survey of self-declared levels of automation maturity in GBS, which remain surprisingly low given this has always been one of the stated drivers of GBS productivity and top of the priority stack.
- The business processes served and services delivered by GBS, two themes we tend to confuse and conflate. A service to provide collections / accounts receivable is not the same thing as the “customer to cash” process or the revenue cycle as a whole. Of course, there is a natural tension between the two. This plays into the struggles that organizations are having with “Global Process Owners” and the whole “end to end” model and the concept of “ownership”.
- Reporting Lines for GBS have evolved, with many more GBS leaders reporting to the CEO or directly to a CxO (usually CFO or Transformation).
- The GBS “branding” discussion is interesting, and one which polarizes opinion. Some feel a GBS brand is a powerful talent magnet and motivator whilst others believe it shows a lack of sensitivity to the broader organization and its corporate brand. GBS is as often an acronym for “global business solutions” as it is for “services” and the “G” seems to be trending as a floating letter to be replaced by that which represents the name of the company at large. How much does this really change perception is open to question. And of course, we have CoEs, SSCs, GCCs et al to add to the GBS alphabet soup . . . .
- The “Business Value” debate and survey results are always fascinating. Whilst we cannot cost reduce our way to success forever, cost reduction remains far and away the top reported component of business value delivered. Until this dichotomy is resolved, you can see why there is a danger period in the GBS organization life cycle, after the euphoria of the initial labour arbitrage benefits of centralization and location diminish, when the spotlight returns to “what else are we getting?”.
- Location strategies as a driver for success both in terms of service availability and labour costs remain topical.
Coincidentally (or not), the Deloitte 2025 GBS survey was also released recently, covering some similar topics.
- Locations, functional scope of GBS, global and regional “Process Owners”, talent & skills . . .
- Interestingly, it is reported that “digital capabilities” may have a higher priority over the next 3 years than cost efficiency. I would test that assumption carefully!
- Approximately 50% of GBS organizations report an expected 20% per annum improvement in productivity. That is a bold promise, when many leaders commit to a 5-10% productivity improvement per annum.
From all of these reports, discussions, workshops and presentations, there is a common desire to “prioritize next gen capability development” (in which GenAI and Agentic AI are featured) in the belief that this is where the big wins in productivity and customer experience will emerge.
We may need to challenge our assumptions a little here too. Whilst the new capabilities are amazing, fascinating and powerful, they do not apply to all tasks and sub-process types, maybe to 20-30% of them. Are these tasks the big productivity or customer experience boosters? The jury is out . . .
We cannot ignore the evidence that GenAI has now passed the “peak of inflated expectations” in the Hype Cycle, and we are seeing some resets of expectations. Now we have Agentic AI to take up the baton in this race . . . I shall be discussing these very topics with an esteemed guest in June, details here . . .
A lot to digest in the GBS orbit for sure . . . .
A synopsis of the 2025 SSOW conference in Lisbon can be found here . . . . including a great summary of Michele Rochefort, CEO of AXA Global Business Services, challenging colleagues to think bigger, bolder and beyond the traditional remit of GBS here . . . and the “Dragons Den” of BPO providers challenged by Deborah Kops, Sandy Khanna and Aneta van den Kieboom here . . .
You can download Deloitte’s 2025 Global Business Services Survey here . . .
Thanks for reading . . .
As an aside, fortunately our workshop “Delivering Business Value through End-to-End Processes and the GPO” ended up less like the first picture and more like the second, below . . . 😉
An example of probabilistic AI models . . . .
Global Business Services (GBS) Challenges & Opportunities.