At a recent breakfast roundtable I hosted, one of our guests was discussing the transformation her organisation is currently undergoing, moving a significant proportion of its recruitment function into a central office collocated with a number of other back-office activities.
“It’s a shared service,” she said, “and they’re calling it 'Global Business Services' – but we’re not really sure what that’s supposed to mean. We’re not recruiting globally.”
It struck me that I’ve encountered such puzzlement regarding the GBS moniker several times over the last year or so – and that this could stem from the fact that there isn’t one hard-and-fast definition of what qualifies a support services structure as being “global business services” rather than “merely” shared services or some other descriptor of a centralised services entity. Each organisation has its own understanding of what it means by GBS, and no two structures are, of course, the same, each catering to the very specific requirements and forms of their parent businesses.
As most readers will no doubt be aware, Outsource has partnered with KPMG to present a series of conferences under the “GBS Roadmap” umbrella (the next two events are taking place in Zurich and Copenhagen, in October and November this year respectively: for more information see www.gbsroadmap.com) and our partners have hit on the word which for me best sums up the philosophy behind the GBS trend: “holistic.”
“In our increasingly complex world,” according to KPMG, “firms find that taking a holistic view across their internal support functions can yield the greatest return. The driving forces behind global business services include:
- Transforming business functions to align with new and evolving business models
- Improving capabilities to deliver insight and clarity for stronger business strategies and decisions
- Preparing the business for long-term sustained value by developing a holistic strategy across the enterprise.”
The key here is that holistic strategy. It’s not merely about centralising functions and activities geographically, but also conceptually: considering support services as reaching right throughout the organisation and providing for the needs not simply of its various local operations but also and simultaneously for those of the business as a whole.
With that in mind, “global” doesn’t necessarily mean “covering the whole world” – as our roundtable guest stated, her organisation isn’t recruiting globally – it can also be taken to mean “covering the entire organisation.” Of course, in order for the GBS model to be leveraged fully, a certain geographical scale and scope does need to be attained, but that absolutely doesn’t imply that an organisation needs to have a footprint in every country on Earth – or even every continent – before it can consider a transition to GBS.
At our previous GBS Roadmap events (including last year in Stockholm and Amsterdam) the flexible nature of the model has been very apparent, with various different interpretations presented by the events’ speakers and many more emerging through workshops and general discussion. Indeed, our roundtable guest was perhaps approaching the question from the wrong direction when she said “we’re not really sure what that’s supposed to mean.” GBS isn’t supposed to mean anything prescriptive, but is more of an operating philosophy, with specific structures being tailored to each organisation’s own particular situation. As Tone Leivestad, Director, Shared Services & Outsourcing Advisory, KPMG Norway said at last year’s Stockholm event (a great highlights video of which you can watch here): “Most of all it's important to find your way; then you need to make it a journey, you need to mature on each level before you take the next step, and then you'll get the model that best supports your business.”
It may well be that GBS isn’t appropriate for your own organisation, for whatever reason – but that reason shouldn’t be that you aren’t “global” in the sense of operating worldwide; of the many misconceptions currently swirling around the GBS model, that one seems to me to be one of the most basic – and, hopefully, one of the easiest to dispel.
Registration for this year’s GBS Roadmap events in Zurich (October 4-5) and Copenhagen (November 15-16) is now open: see www.gbsroadmap.com for more details. Anyone wishing to discuss these events, or to share their own thoughts on the GBS model generally and/or how it’s being implemented within their own organisations, can write to me at email@example.com; as always, I look forward to hearing from you.