In today’s digital environment, this is about as fun and interesting as it sounds: a back-office empire fixated on overhead savings and completely separated from where the customer-wowing magic happens.
GBS groups house far too much precious data and far too many vital processes to carry on in this vein. In an age in which the ENTIRETY of a business needs to be data- and customer- driven in order to surpass competition and consumer expectation, GBS models need to transform from a siloed cost-saving operation into a seamlessly integrated value stream into the front office.
Unless they commit to uniting the front- and back-office – and synergising all of their various processes in service of customer experience – Global Business Services will soon be obsolete.
Problem is, the average modern GBS group is still far too...
Internally focused. Jeff Bezos credits “customer-obsession” for Amazon’s success; most GBS organisations have shown more of a mild “customer-indifference”, with their obsession instead directed towards their own internal KPIs.
Non-strategic. Money and resources are being poured into building back-office empires that don’t necessarily serve the customer experience or align with the company’s overall vision and strategy; GBS results aren’t measured against these ‘bigger picture’ objectives.
Siloed. Even today, about 65% of companies still follow a fragmented model, characterised by single-function shared services with sorely lacking integration between business units. Many are encumbered by disconnected IT systems that make it impossible to connect and simplify transactions.
The result? Important, customer-relevant process are being marginalised and – even worse -standardised in the isolated backrooms of the GBS, without any connection to the wider company’s essential goals and values.
So how do we unite the front- and back-office in a way that ensures that each and every process is geared towards finding new value for the business? Somebody hit the lights...
Lights-out automation is a concept born out of manufacturing automation making use of robots that were able to run the factory "with the lights off."
In many ways, this is the natural endgame for Global Business Services but we have serious doubts that they can do it alone. GBS has always been focused on saving cost, re-engineering processes and driving standardisation across global multi-divisional organisations in order to enable the front-office to focus on customers and delivery. Turning the lights off in the back-office in order to bolster the front-office is surely the apotheosis of this mission.
Recently, we’ve seen what could be described as the beginning of lights-out: GBS has started to adopt technologies like Robotic Process Automation (RPA) and other intelligent automation tools. But success has in far too many cases been limited, often because the client organisation (business divisions) they serve are unwilling to fund the investment and often, despite the consolidation of processes in the GBS structures, there is still too much fragmentation of processes to make the investment case for RPA.
However, the ever-increasing digital world requires significantly quicker and closer-linked integration between the front- and back-office - the concept HfS Research describe as Digital OneOffice.
In this ideal scenario there would be such seamless integration between the front- and back-office that the terms “front” and “back” office themselves would be obsolete. Basic transaction processing would be completely automated, customers would enjoy seamless and effortless purchasing experiences, and employees would be entirely focused on customer service with the skills and data at their fingertips at all times to respond to any requests or issues that could arise.
So the move to digital presents a huge threat to the survival of GBS. The mindset, objectives and values of the digital enterprise are truly at odds with the traditional KPI’s and metrics which formed the foundation of the GBS movement. To stay with the times, GBS organisations would need to get out of the hamster wheel and seize upon the ocean of information that flows through their processes and retool it towards optimising the front-end experience of customers and employees.
But for this seamless integration to really set in like superglue, a diverse range of talent and tech expertise would be needed to work alongside the new technologies that are set to disrupt the GBS.
This is where GBS organisations in their current form are truly found wanting.
Firstly, in a world that has successful and rapidly growing tech and digital market segments, it’s really hard to attract the best and brightest to work in the back-office of organisations that are not seen as progressive, innovative, ethical and digital.
In creating careers based principally around task execution in the back-office and devoid of strategic or customer-winning value, GBS has cultivated relatively narrowly-skilled people trained only to drive efficiency, cost-save and focus on internal controls. As a result, many GBS teams struggle with high turnover and talent shortage due to often low-paying or unfulfilling roles. The main exception here are GBS leaders who are as rare as hen’s teeth and - due to the fact that they’ve been willing to invest their careers in the thankless task of driving large teams of back-office staff - are well paid and operate on a kind of circuit like football team coaches.
The second talent challenge that comes with digital is the need to apply a great deal of technology to implement the change get the work done. The requisite tech stack comprises many different technologies, including but not limited to:
Very few IT organisations - let alone GBS organisations - would be capable of hiring and retaining the expertise to implement and manage all of these technologies. On top of that they’re extremely unlikely to have the user-centric design skills to help their client organisations design better, smarter, cheaper client-facing processes focused entirely on creating the very best customer and employee experiences.
The technical complexity of the digital operations landscape is for sure a barrier for the typically non- technical GBS organisation, but that doesn’t mean profound transformation has to be out of reach.
Partnering with the new breed of service providers and consultancies like Emergence Partners can enable the best of both worlds. We possess the design and technical capabilities required for profound transformation whilst remaining completely focused on the customer and employee experience.
At Emergence, for example, we use AI tools to mine for transformation opportunities and build the business cases for change, then implement the best-in-class technology to deliver the optimum solution. This tends to escalate the people in the organisation up the value chain and into far more fulfilling and rewarding knowledge worker roles.
This kind of expert-led transformation project does require investment and does require knowledge and expertise to implement and run. Again, many organisation will struggle to hire and retain the required capabilities and will not be able to build convincing business cases for the change. That’s where the new Process-As-A-Service (PaaS) model is emerging.
Under these new models, clients can effectively pay-as-they-go with the use of the suite of technologies they require. In some cases, the upfront investment can be funded by the provider and spread over the life of the contract in line with the receipt of the benefits, essentially converting Capex into Opex. Companies benefit from immediate reduction in Opex for the technology and can decide whether or not they wish to retain in-house or outsource the staff delivering the newly designed services.
So is it lights out for GBS? I think the answer is that it’s lights out for GBS as we know it. Organisations are unlikely to deliver profound transformation with a GBS model that has a cost reduction first mindset. This limits the enterprise from delivering the fully integrated end-to-end digital transformation HfS describe as Digital One Office to achieve significantly more profound transformation with all the benefits that can deliver in terms of cost and customer experience.
Get in touch to talk to us about Transformation Opportunity Mining, Profound Transformation and our Process-as-a-Service solutions.
