A recent BCG study showed that only 41% of companies believe that Global Business Services (GBS) creates value. Traditional GBS models, once celebrated for their operational efficiency and cost savings, are now being put to test. In today's dynamic, AI-accelerated business environment, GBS functions are called upon not only to maintain their foundational roles but also to evolve into strategic partners that deliver business growth, resilience, flexibility, scalability, and continuous value. This evolution requires GBS organizations to broaden their scope, incorporating value-added activities like collections, payments, customer management, and even direct contributions to sales functions.
In this transformative era, with its deep insight into the best practices across the corporate world, GBS is perfectly positioned to lead the charge in fostering seamless collaboration across different company functions. It's time for a bold pivot in strategy and to step up as the driving force behind widespread innovation within enterprises. Traditionally, the industry's go-to move was to apply a tech band-aid to inefficient processes. The AI-driven future calls for a more visionary approach: rethinking processes from the ground up and then harnessing the power of cutting-edge technology to bring these fresh, transformative ideas to life. Moreover, the old playbook of mapping out transformations over 15 to 24 months is becoming obsolete. The fast-paced business environment of today demands agility over adherence to a fixed, long-term plan.
In this progressive journey of GBS, a new breed of leaders is emerging, setting the pace for what's possible in the world of strategic business support. These leaders are not content with the status quo; instead, they are redefining the boundaries of GBS by embracing change, innovation, and a forward-thinking approach to business challenges.
Spotting the Leaders in GBS
Some visionary GBS leaders are already advancing beyond the sector’s conventional boundaries. They're not just following the playbook; they're rewriting it to better serve the evolving needs of businesses. By innovatively crafting strategies that go beyond the initial business case, these leaders are proving the power of questioning the status quo.
This evolution represents an exciting opportunity. It has led to the creation of a flexible and forward-looking charter that spans business-as-usual (BAU), transformation, and innovation. This charter isn't static; it's a living document, constantly refined to anticipate and adapt to future shifts in the business landscape. These leaders are always at the forefront of leveraging the latest technologies — be it digital workflow enhancements, cloud-based solutions, or AI-driven tools. This not only speeds up GBS transformation, but also significantly boosts ability to scale effectively.
These pioneering GBS leaders are characterized by their willingness to experiment and innovate. They understand that the traditional models of operation, while effective in the past, need to evolve to meet the demands of today's dynamic business environment. Here's how they are making a difference:
- Embracing New Work Models and Pricing Strategies: Leading GBS teams are exploring novel ways of working and experimenting with innovative pricing models. Their focus is on leveraging technology not just to enhance efficiency but to fundamentally transform how work is done, making operations smarter and more adaptable to change.
- Fostering Close Collaboration Across the Company: These leaders ensure that GBS functions do not operate in isolation. By working closely with other parts of the organization, they facilitate smooth and seamless transformations, minimizing disruptions and aligning GBS initiatives with broader business goals.
- Adopting a Holistic Approach: Instead of focusing on isolated improvements, these GBS teams are looking at the big picture. They are driving changes that benefit the entire organization, ensuring that GBS initiatives contribute to overall corporate success and strategic objectives.
- Prioritizing Long-term System and Data Upgrades: Recognizing the limitations of outdated systems and data structures, these leaders are committed to long-term improvements. They are updating and modernizing the technological backbone of GBS functions to future-proof their operations and enhance their strategic value.
- Streamlining Technology Use: In an era where technology proliferation can lead to complexity and inefficiency, these GBS teams are careful to avoid using too many overlapping tech tools. They focus on streamlining their technology stack to ensure simplicity, cost-effectiveness, and operational excellence.
- Taking Control of Data and Technology: Even when external partners are involved, leading GBS functions maintain tight control over their data and technology assets. This ensures that GBS can effectively leverage these critical resources to drive innovation and strategic outcomes.
Generative AI, the Game Changer
Generative AI is transforming GBS, promising to elevate its value significantly. An Everest report highlights that out of over 1,200 AI proof of concepts (POCs) by leading providers, 27% have transitioned to production, signalling a major boost for GBS's role in enterprises. [ST1] By integrating data from various technologies and functions, GenAI facilitates enhanced collaboration, offering new insights, hyper-personalization, and improved experiences.
This technology is rapidly becoming integral to GBS operations. It's being deployed for risk assessment during vendor onboarding, powering chatbots for more natural and engaging customer and supplier interactions, and streamlining recruitment processes, from resume screening to conducting initial interviews. These advancements not only enhance various functions but also position GBS as a strategic business partner.
Generative AI is also paving the way for new roles in core engineering, security, model training, and audit, among others, offering GBS a chance to expand its capabilities. Particularly in compliance management, it simplifies handling complex regulations across industries, enhancing accuracy while reducing costs.
The importance of GenAI has sparked a push for better governance and program management, necessitating a talent pool that can both complement and leverage AI to scale its application. This evolution suggests a shift in GBS from focusing on cost reduction to driving value creation and transformation.
GBS Leaders Leverage GenAI to Create Value
As GBS leaders embrace GenAI, they are transitioning the industry from a focus on cost reduction to a paradigm of value creation and transformative growth. This shift is inaugurating a future where GBS's offerings are increasingly defined by data and technology, alongside its human and process capabilities. As business models evolve to prioritize technological solutions, GBS leaders must be inspired to adopt a more flexible approach to talent management, akin to the gig economy, in specific domains.
This moment invites the GBS industry to reimagine its operational and governance models. The GBS leaders that embrace this challenge will provide a strategic foundation for driving business growth, welcoming a future where innovation, efficiency, and opportunity converge.
