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Business

Global Business Services (GBS): What are they?

Cassio Sagawa
July 24, 2022
11 minutes to read

As businesses continue to stretch across the planet thanks to rapidly advancing technology solutions, the demand for a new breed of professional services has increased. These “Global Business Services” (GBS) are designed to provide end-to-end support for large organizations that operate in multiple countries.

GBS providers can offer a comprehensive suite of services that helps companies to streamline their operations, improve efficiencies and better serve their customers — regardless of location. In today’s global business environment, this is an invaluable asset.

It can sometimes be difficult to understand the difference between GBS and Shared Services Centers (SSC), or even Business Process Outsourcing (BPO), two related fields. In this article, we will:

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Global Business Services (GBS) definition

Sometimes called the next stage of evolution for the outsourcing model, GBS can be defined as an integrated, end-to-end set of capabilities that are delivered globally to enterprise clients by a service provider.

For a company to be considered a GBS provider, it must have the ability to support multiple countries and multiple languages. They should also offer a comprehensive suite of services that helps companies streamline their operations, improve efficiencies and better serve their customers — regardless of location.

The term “global” is important here — a GBS provider must be able to truly understand the diverse and unique needs of their international clients. This is what sets GBS apart from traditional outsourcing models, which are often location-specific.

What is the Global Business Services operating model?

Rising in popularity as a business model during the late 1990s and early 2000s, GBS can be defined as a cross-functional team of experts organized to provide services that meet or exceed customer expectations in terms of quality, cost, and delivery.

In practical terms, this means creating a dedicated unit within an organization that is responsible for specific functions or processes that support the company’s core business goals.

These teams are typically composed of professionals with expertise in areas such as human resources, finance, accounting, information technology, capacity management, and procurement.

The GBS operating model is built on the premise that by consolidating these support functions into a single team or center, companies can achieve economies of scale and improve operational efficiencies. In theory, this should lead to better quality services at a lower cost.

Each GBS provider includes:

The GBS model is not a one-size-fits-all solution — it can be customized to meet the specific needs of each organization. For example, some companies may choose to outsource their entire IT function to a GBS provider. In contrast, others may only use GBS for specific processes such as payroll or benefits administration.

This is not a limited market. A study from Grand View Research projects the global business software and services market to reach more than $1.1 trillion by 2030!

What are the benefits of GBS?

As a company grows, its need for efficient, streamlined operations becomes more and more important. GBS can provide the following benefits:

Cost savings

Everything in business comes down to the bottom line. With GBS, businesses can enjoy significant cost savings by consolidating and standardizing processes across their entire organization. This is achieved through the economies of scale that GBS providers can offer.

For example, a GBS provider can manage the payroll function for a company with employees in 10 different countries. The provider can use its buying power to get discounts on software licenses, hardware, and other necessary supplies.

The provider can also draw on its team of experts to find process improvements that result in cost savings. All of these efficiencies are passed on to the client in the form of lower costs.

Improved efficiencies

To establish those lower costs, GBS can help by providing a comprehensive review of an organization’s current processes. GBS providers use the latest technology and tools to assess how a company is currently running its operations.

They then work with the company to redesign and optimize those processes. The goal is increased efficiency and effectiveness, which leads to lower costs.

In addition, GBS providers can take on certain non-core functions for their clients so that those companies can focus on their core competencies. This can free up valuable resources that can be better used elsewhere.

Enhanced customer service

No longer does a company have to rely on a local provider for customer service solutions. A GBS provider can offer customer service in multiple languages, using the latest technology solutions.

For example, a GBS provider can help to set up a cloud-based contact center, which gives your customers the ability to reach you by phone, email, or live chat — regardless of where they are in the world.

Increased agility

In a world that sees market shifts daily, the ability to rapidly adapt your business processes is crucial. GBS can provide the necessary agility, due to its focus on process improvement and standardization.

For example, imagine that your company is expanding into a new country. A GBS provider can help to quickly and efficiently set up the necessary infrastructure, as well as put processes in place that will help you to hit the ground running.

Staying agile and taking advantage of opportunities when they present themselves is critical to any international business — and GBS can make that happen.

Lean project management

With consolidated teams, GBS can provide a more coordinated and efficient management style that eliminates duplication of effort, reduces cycle times, and improves quality. Trying to cover these non-core activities with in-house resources can lead to project delays, ballooning budgets, and sub-standard results.

Improved compliance

One of the most difficult things for expanding companies is maintaining compliance with regulations in multiple countries. GBS providers can help by standardizing processes and sharing best practices across borders.

The experience they bring can help to avoid costly mistakes and ensure that a company’s operations are airtight.

In any business continuity plan, there will be contingencies for breaches of regulation but, with GBS in place, these should be minimized.

Difference between GBS and SSC

You might get this far and wonder what the difference is between GBS and shared services centers (SSC). It comes down to the services being offered and how they are delivered.

SSCs tend to focus on back-office or non-customer-facing activities, whereas GBS providers offer a much more comprehensive service that can include both customer-facing and back-office operations.

In addition, SSCs are usually set up as support functions for specific business units within a company (e.g. finance or HR), whereas GBS providers have a more holistic approach that takes a company-wide view.

For example, a GBS provider might offer services such as customer support, order processing, invoicing, and logistics — all from a single platform. This would be very difficult to achieve with an SSC as it would require significant coordination between the different SSCs.

GBS providers can also be more flexible in their approach as they are not tied to any specific business unit. This means that they can offer a tailored solution that is designed specifically for the needs of the client. At times, this is called the next evolutionary stage or a new era of business process outsourcing.

How to find GBS organizations

Before we get into a step-by-step guide to how to find, select, and partner with a successful GBS provider, it is important to note that the GBS market is still in its relative infancy. This means that there are a limited number of firms with significant experience and an impressive track record.

The Big Four accounting firms (Deloitte, EY, KPMG, and PwC) all have GBS practices, as do a handful of other large professional services organizations such as IBM, Accenture, and Capgemini. Many of these companies also have SSCs or BPOs, so it is important to understand the difference between the three before making a decision.

Now, if you feel as though GBS is the way to go, let’s walk through the most important things to remember:

Define the scope of work

Without clearly defining the work that needs to be done, it will be difficult to find an organization that is a good fit. When defining the scope of work, you must consider:

  • The size and complexity of your company
  • The number of countries in which you operate
  • The languages spoken by your employees and customers
  • The type of support needed (e.g., human resources, finance, IT)
  • Any special requirements (e.g., industry-specific regulations)

While you may intrinsically understand these things about your own company, it is important to document them clearly and concisely. This will help you to communicate your needs to potential GBS providers.

Develop criteria for evaluating providers

A decision like this should not be taken lightly. Choosing a GBS partner is a huge step for your business, meaning you must proactively find out several things about anyone you are going to contact. You will want to look for firms that have:

  • A comprehensive understanding of the global business landscape
  • Natural alignment with your core business values
  • Proven success in designing and implementing GBS solutions
  • A strong track record of client satisfaction
  • The ability to scale their services to meet the needs of large organizations
  • A robust network of delivery centers around the world

The best way to find out this information is by speaking with other businesses that have already gone through the process. Ask them about their experiences, what they would do differently, and who they would recommend.

Once you have a shortlist of potential providers, you can then begin to contact them and ask for more specific information.

Evaluate proposals and select a provider

Once you’ve narrowed it down to a handful of potential partners, it’s time to evaluate their proposals. Here are some key factors to consider:

  • Do they have the right mix of global and local resources?
  • Are they committed to continuous improvement?
  • What is their pricing model? Is it flexible enough to meet your needs?
  • What kind of contract are they proposing?

Crafting contracts and agreements for a partnership of this size is no small task, so make sure you have a team of experienced lawyers to help you navigate the process.

Manage the transition

Moving non-core functions from your organization to an external provider can be a daunting task. You must have a clear and concise plan for how the transition will take place.

Your GBS partner should help you map out a timeline and milestones for the project and outline the resources that will be required from your team. This will make it much easier to manage expectations and avoid any surprises along the way.

It is also important to remember that changing business processes can be disruptive for employees, so it is essential to communicate the reasons for the change and how it will benefit the company as a whole.

Proper change management will help to ensure that the implementation of GBS is as smooth as possible and avoid any potential conflicts.

Monitor performance

As with any business relationship, it is important to monitor the performance of your GBS provider on an ongoing basis. This will help you to identify any potential issues early on and make sure that your expectations are being met.

There are several metrics that you can use to measure performance, but some of the most important include:

  • Quality: Are errors being made? Are customers happy?
  • Quantity: Is the provider meeting its targets?
  • Timeliness: Are deadlines being met?
  • Cost: Is the provider staying within its budget?

If you are happy with the answers to these questions, then you can be confident that you have found a successful GBS partner. If not, then it may be time to start looking for someone new.

Now that you properly understand the meaning of Global Business Services, the potential benefits of using them, and how to find the right provider for your company, you can be confident that you will reap the rewards of a successful partnership.