Building up the Global Business Services Center of Expertise
Global Business Services (GBS) significantly influence operational models and process sourcing across corporate functions. By establishing Centers of Expertise (CoE) and collaborating with global business process outsourcing (BPO) organizations, GBS creates substantial strategic value, fostering efficiency, innovation and digitalization of business processes.
Vision: the Hybrid Operating Model
The envisioned operating model integrates centralized GBS Centers of Expertise, localized expertise of Corporate Functions (e.g. tax, finance, HR, credit management, and project controlling activities) with Global BPO Partner ensuring both efficiency and adherence to local regulations. Figure 1 illustrates the Hybrid Operating Model.
Figure 1 The Hybrid Operating Model
Whereas internal resources focus on standardized data provision, quality control, process ownership, and internal know-how; partnering with BPO providers mitigates risks associated with hybrid operational models, addressing high market complexities strategically. Hybrid solutions foster participatory governance, involving key stakeholders in decision-making processes and promoting a collaborative environment characterized by openness and trust. Open-book BPO engagements enhance operational governance, encouraging the development and implementation of robust partnering relationships throughout the end-to-end process. Hybrid solutions help make correct, balanced decisions in terms of function desirability, economic feasibility, and technical implementation of the targeted operating model.
The Global Business Services Center of Expertise Value Proposition
1. Maximize centralization of core activities, leverage economies of scale and enhance process consistency.
2. Maintain corporate function accountability, ensure alignment with organizational goals and long-term strategies.
3. Engage Global BPO Partner when necessary for local compliance and reporting to ensure accuracy, timeliness and flexibility.
4. Enhance risk management practices, mitigate potential risks and ensure smooth operations.
5. Develop effective and efficient processes; guarantee accurate, timely, and comprehensive compliance and reporting frameworks.
The Fundamental Principles
Figure 2 summarizes the six fundamental principles from above discussion to provide a framework for development and effective implementation of the Global Business Services Center of Expertise and formulation strategic responses to critical uncertainties in delivering expert solutions.
Figure 2 The Fundamental Principles
The Evolution of the Hybrid Operating Model
Figure 3 illustrates the evolution of the operating model, highlighting the relationship between the "level of bundling" and "time." This strategic roadmap guides the development and scaling of the GBS Center of Expertise, emphasizing simplicity and efficiency.
Figure 3 The Evolution of the Hybrid Operating Model
Closing Thoughts
Adopting a holistic approach to building and scaling the Global Business Services Centers of Expertise is crucial for achieving long-term success. The strategic partnering of internal GBS resources with external Global BPO expertise facilitates optimal local reporting solutions, enabling Corporate Functions leaders to address challenges effectively. This comprehensive strategy creates substantial value and delivers enduring benefits, reinforcing the organization's competitive edge and operational resilience.
