How GBS becomes the NextGen driver of digital transformation

5 minute read 13 Nov 2019
Authors
Johan Jacques

EY Belgium Consulting Executive Director

Finance transformation.

Reza Guillaume

EY Belgium Consulting Executive Director

Trusted advisor. Transformation projects.

5 minute read 13 Nov 2019

Global Business Services as a driving force behind innovation, E2E-processes and customer experience.

This is a decisive moment for Shared Service Centers (SSC) and Global Business Services (GBS) to become the key drivers of digital transformation within their own organizations to facilitate end-to-end processes and improve customer experience. Tony Saldanha, former VP Next-Generation Shared Services at Procter & Gamble, and Christian Mertin, EY Global GBS Solution Leader, shared their insights at an inspiring ‘Learn from the best’ session at the EY wavespace in Antwerp.

Good and bad news

Global Business Services organizations accomplish the expected savings in costs, have access to suitable talent for today’s challenges and are a reliable business partner for transactional services. The bad news is that GBS is still not viewed as a driver of transformation and innovation.

Nevertheless, the potential is there – now more than ever – for GBS to evolve into a strategic organization that sets the company’s disruption agenda and brings (measurable) added value to the entire organization via flexible solutions. “The future is complex but within reach and rewarding,” says Christian Mertin. "GBS can be the primary driver of digital transformation."

Four game changers

Mertin sees four game changers that allow GBS to upgrade their current role to that of a technology hub, data owner, change agent, innovation hothouse, IT ecosystem manager and/or an end-to-end process owner.

Thanks to experience with processes, GBS is perfectly positioned to drive transformation and innovation. But there are several conditions. Mertin: "For instance, convincing the C-level of the driving force and having a clear mandate for this are crucial. Furthermore, GBS must, at the very least, work very closely with IT or, even better, include an integrated IT function. Equally, GBS should seek to create an ecosystem of digital partners and should ideally prepare a location strategy to attract new technological skills."

GBS as innovation owner

GBS could bridge the gaps in the functional organization and thus facilitate real E2E-processes. "That requires responsibility for the entire process in which GBS assumes the advanced role of global process owner and global solution owner. For example, placing the focus on the correct KPIs and SLAs is, especially then, important."

GBS could become a true innovation owner for the organization. This requires part of the capacity – say 10% – being aimed at disruptive development in addition to the 70% at business operations and 20% at continuous improvement. Mertin: "Thanks to investments in disruption, GBS will also manage to attract innovation talent and create an ecosystem, which will provide them with an integrated toolbox for true innovation."

In the past, GBS was not very concerned with how internal and external customers perceived solutions. According to Mertin, they should, in their role of transformation drivers, put customers at the center of everything they do in order to ensure a superior customer experience. The headline message here is the joint building of simple and user-friendly solutions and interfaces. Saldanha shares this view: "GBS is a sensitive element in organizations: they take work away from other departments and say they will improve performance. They then have to prove that they actually do make the daily work of the other members of staff easier."

Innovation cannot be outsourced.

Case: removing the travel expense process

Rather than further optimizing the travel expense process at P&G, SSC felt that this process was perhaps unnecessary as all the data on financial transactions is available through credit card companies. As a test, P&G UK's SSC removed their own travel expense process and set a maximum amount per trip without any further checks. The result: fewer resources required for following up, but, more importantly, a 30% reduction in costs for business trips. This made a considerable difference from a total travel budget of USD 400 million. This is just one of the examples that Saldanha used to convince P&G that their GBS could achieve innovative transformation with measurable added value for the entire organization.

Saldanha: "SSC now have the opportunity to not only be a good quality, low-cost service center with lower labor costs, but also to change the way the entire organization thinks. And this is crucial, because continuous improvement alone is no longer enough to compete with their real competitors; technology-driven companies that use resources more efficiently. This requires disruption. Skate to where the puck is going, not where it has been."

Turning transformation targets into business promises

GBS as the driving force behind transformation? Many organizations are not convinced about this. How can you convince them? Saldanha: "Easy, be brave, take risks, get involved in total shareholder return and demonstrate results. Realize your vision by using successful case studies and examples from industry experts."

The role of GBS 2.0 is to build successful organizations in the fourth industrial revolution. Technology is the basic ingredient for this: AI to transform the accounts receivable process or automate employee services such as payroll and security; data automation and predictive analysis to make call centers more customer-friendly; blockchain to optimize shipping and invoicing. These are just a few examples. "Companies often wonder whether the technology is ready for their organization. Well, most of the time this is not the case because it is not scalable or compliant. But, in fact, the question should be turned the other way around: is the organization ready for technology? In other words, set to work with what you have and do not wait for perfection. Ask venture capitalists what tools are readily available and, together with the technology partners in your start-up ecosystem, innovate to deploy this in the organization as quickly as possible. If a company trusts AI technology to schedule the CEO's agenda, why not use this technology in your organization? Just do it!"

A brave GBS vision brings about large, disruptive challenges.
Tony Saldanha
former VP Next-Generation Shared Services at Procter & Gamble

Change management

According to Saldanha, GBS organizations must engage in change management to achieve effective outcomes. He argues in favor of organizing GBS not as a back office, but as a real (consultancy) company: with a place in the company's boardroom, a GBS manager for each business, strict account management and a well-organized PR department. "Furthermore, you need a team that works at the edge of your organization and enjoys a certain amount of freedom in terms of HR, IT and procurement processes. I always put together a team with the type of people who dared to color outside the lines, not with employees who knew the processes through and through. They block you if you want real innovation. Another tip: start with something that is difficult in your organization, not with the cool stuff that other companies do as well. If you can achieve results like this, you have set the tone."

The faster, the better

One final tip from Tony Saldanha: "Do not delay the transformation of your GBS. Martec's law says that organizations change much more slowly (logarithmically) than technology (exponentially). Each year of delay makes it more difficult to convince your company that GBS is the most powerful driver of change. So: start fast, cheap and smart!"

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Summary

The time has come for SSC and GBS to realize the digital transformation within their own organizations. Tony Saldanha and Christian Mertin shared their insights during a ‘Learn from the best’ session. GBS manages to minimize costs, hire suitable talent and carry out reliable transactional services. They could become a true innovation owner, as Mertin identifies four game changers, while SSC changes the way the entire organization thinks. Saldanha knows how to convince organizations in doubt: “Be brave, take risks, get involved in total shareholder return and demonstrate results.”

About this article

Authors
Johan Jacques

EY Belgium Consulting Executive Director

Finance transformation.

Reza Guillaume

EY Belgium Consulting Executive Director

Trusted advisor. Transformation projects.