Companies to spend $40 billion annually. Analytics, IT, and talent cited as success factors.
Global Business Services (GBS) is a next generation operating model for driving performance, added value, and deeper savings in business services.
Among other benefits, GBS can help organizations to lower costs, get products to market faster by using their process footprint, quickly integrate acquisitions to accelerate growth, and drive growth in emerging markets by seamlessly supporting operations in new geographies.
We’d like to share some highlights about the primary challenges and opportunities of GBS for 2014, based on findings from “The Global Business Services Industry Study,” one of the largest and most comprehensive GBS studies ever conducted. Conducted by KPMG and HfS Research, the study covered the dynamics and intentions of 416 enterprises, with more than $1 billion in revenue, representing various regions and industries.
Key findings from the study
In the study, almost two-thirds of respondents from mature companies said they intend to move to GBS or significantly evolve their GBS within the next two to three years. Even more telling, we found evidence suggesting that —
- Global enterprises plan to spend $40 billion dollars per year on improvements in GBS.
- Back-office centralization is well developed, with the majority of companies (51 percent) already centralized.
- Analytics will provide the value-differentiator for GBS organizations, providing strategic operational analytics to improve services, contain costs, and enhance decision making.
- GBS organizational models fundamentally change the structure of companies by replacing traditional siloes with matrixed processes.
- Limited executive experience in key areas slows progress.
Success with GBS
According to our recent study as well as our experience in the field, the successful development of GBS can include the following initiatives.
Developing an effective, long-term, analytics road map
Accessing meaningful data to support decision-making will provide a crucial value-differentiator for GBS organizations, with three-quarters of enterprises viewing investments in analytics as important for reducing costs, gathering more data on customers, and improving profits. Success will be measured by process improvement, cost control, and the capability of governance executives to produce quality operational data upon which to support management decisions.
Supporting business enablement of IT
Most mature GBS organizations own multifunctional processes, as well as the underlying technology. With today’s technology, they can integrate the back office with the front office, managing cohesive, end-to-end processes that connect disparate systems, owners, and activities. They can also organize skill sets in appropriate groups to drive efficiency and additional controls. Furthermore, they can support multiple services within a diverse commercial enterprise resource planning (ERP) environment, while taking advantage of multi-tenant platforms offered by software-as-a-service (SaaS) providers.
Improving talent management
With new technology, changing markets, and the growing complexity of business requirements, talent shortages–especially in middle- and higher-level roles–remain a top challenge for GBS organizations. GBS organizations can determine the right mix of in-house training, third-party resources, and outside recruitment to gain the skill sets they need. It is important to be seen as an “employer of choice.” Bringing in the right talent will help foster innovation and prepare the organization for the future.
Access “The Global Business Services Industry Study” to learn more about GBS trends and issues. Topics include:
- An exploration of the newest global operating models to enable new technologies, capture the value from data and analytics, empower the business, and simplify the extended enterprise
- Leading practices for planning and implementing global business services
- Process and industry trends
- Progress toward achieving global business services
- Desired business outcomes
- Operating maturity and readiness
- Actions needed to drive success
- The future role of analytics and data governance