Shared Services Evolving Into Global Business Services
The shared services center sector, on a steep uphill climb in Hungary and the region, has seen a new acronym enter the market: GBS (global business services) is seen as the next step of SSC evolution, offering more complex and versatile services, carrying huge potential for transformation.
Today we are witnessing an evolution of shared service centers into global business services that allow a customer experience focus, managing more complex execution and value creation through continuous improvements.
“BSCs provide more complex, end-to-end services across multiple processes and functions or geographies with a higher level of ownership and accountability, and allow the customer to have a different experience,” says Gergely Baksay, employer branding and communications director at Roche Services and Solutions.
SSCs typically provide transactional activities: the relative simplicity of the tasks allows for simple transitions of activities to the center and quick economies of scale. The responsibilities for a GBS are more complex and challenging and can be used as an engine to transform the business.
“On the one hand, this change creates growth opportunities for SSC professionals, by presenting new challenges and development opportunities for the employees of a company; on the other hand, it may also promote more movement between companies for the same reason,” Baksay says.
“The competition in the SSC/BSC [business services center] market is stronger than ever. While it makes it harder for the companies to recruit, it is an opportunity for employees and also an opportunity for employers to differentiate and build eye catching employee value propositions that may result in a better match for both parties,” he adds.
The GBS model clearly opens up the possibility for more interesting career challenges, Réka Komáromi, associate partner of advisory services at EY Hungary tells the Budapest Business Journal.
“The GBS model is multi-functional and focuses on optimization around processes. GBS organizations have reached lean, cost-efficient operations and have established an agile operating platform. Going forward, this enables them to drive digitalization and enable a superior customer journey,” she adds.
GBSs are seen to carry the potential to be the transformation engine for the wider organization, and with good reason: a GBS tends to know more about the processes, owns more data and can leverage more technology than any single function.
“It’s a pioneer of cross-functional working. Depending on the maturity and remit of an organization’s GBS, there are some necessary steps to realize that potential. GBS focuses on creating customer-centric, digitized process flows across functions and geographies,” Komáromi says.
“Innovation is in the DNA of the modern GBS, and emerging technologies managed by GBS can support exceptional performance across the organization. But at the same time GBS units will remain lean, cost competitive and efficient,” she explains.
SSC, BSC and GBS sounds like a recipe for alphabet soup. What is the difference? “In my terminology, BSC is a Global Business Services Center (GBS),” Balázs Horváth, director of shared services and outsourcing advisory at KPMG Hungary, tells the BBJ.
“The key differentiator is that GBS is global, manages third party service providers and generates value to end customers. All SSCs in Hungary tends to differentiate themselves to be a CoE [center of excellence] or GBS these days, but only a few are really able to step up,” he adds.
The real difference between an SSC and GBS is a question of maturity and complexity, he adds. “Pure SSCs will not survive on the market for long. It also has to be said that many of today’s SSC are not able to operate [global] shared services due to process, IT or other weaknesses,” Horváth says.
Whether we talk about SSCs or BSCs or GBSs, the biggest challenge in Hungary today is to create a mid-term vision where these centers can introduce the right automation tools, have robust scope, be an automation engine for the entire parent company and serve their end customers by being relevant to the overall business, according to Horváth.
Emerging technologies, to no surprise, are changing the GBS market, too. “Blockchain, AI, digital finance, and other emerging technologies will be incorporated in enterprise automation as a lot of processes will be carried out differently,” says Tjeerd de Waar, manager at EY advisory services.
Tjeerd de Waar
“Disruption is the new normal, and it requires transformation. Organizations of all sizes, in all sectors, are experiencing disruptive change caused by exponential advances in technology and volatile, uncertain market conditions,” de Waar adds.
“New business models are being driven by new players that seem to rewrite the rules almost overnight. In other words, disruptive technologies are fundamentally changing markets. Digitalization will mean that companies need to transform their business model in the very near future. It will drive reduction of headcount and changing job profiles to more creative and value-added roles in the GBS centers,” he explains
He believes the GBS model, with time, will evolve into yet another acronym: Intelligent Business Solutions (IBS), where the latest digital technologies will be integrated in the end-to-end global process model. IBS will embrace agile business solutions and redesign the organization for digital capabilities, which will be present across all functions in the organization, he says.
“I expect that every company will start of continue their automation roadmap and create a GBS environment, where they not just service their internal stakeholders but also generate value to the end customer by being an analytics and automation hub,” Horváth of KPMG says.
State-of-the-art technologies will also help amend recruitment. “GBS organizations face a major shift in how they recruit and retain talent,” Rowin Verschoor, manager at EY advisory services, tells BBJ.
“But more importantly, GBS can help drive a completely new data-driven approach to talent management within the retained organization; uniting functions and HR planning with a transparency never seen before. The universal adoption of process automation, intelligent automation and ultimately artificial intelligence within GBS will mean that people will routinely work alongside advanced bots, uniting talent and technology. But technology is supposed to serve humans, so it should be designed as an enjoyable, productive experience from the beginning,” he concludes.
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