The New Powerhouse: From Global Business Services To The Center Office

The traditional value proposition for Global Business Services (GBS), i.e., cost reduction and scalability, has evolved to a customer service-related orientation through a “center office model.” The delivery of superior customer experience can yield significant benefits for GBS as well as for the overall organization by lowering costs through self-service, higher employee engagement and retention.

The center office model acknowledges the significance of cultivating a well-thought-out corporate customer orientation, which seamlessly interfaces with the traditional GBS structure. Consequently, the shared services organization gains transformative capabilities that can significantly enhance processes and be extended to benefit the entire company.

GBS, with a renewed emphasis on increased scale and efficiency, has logically progressed from functional shared services by implementing shared management, governance, and, wherever feasible, integrated systems across multiple value streams. As per the Deloitte’s 2023 Global Shared Services and Outsourcing Survey, while cost reduction/scalability is still a fundamental prerequisite, the cumulative importance of customer service-related characteristics now outweighs cost. Moreover, more than half of stakeholders are now fully expecting material transformation of the processes performed by shared services.

The center office model brings GBS to the forefront of innovation and establishes it as the early adopter and champion of technology and insights within the organization. Per Deloitte’s survey and analysis, over 50 percent of GBS organizations have leveraged automation, reporting and analytics, process excellence, end-to-end process ownership and business continuity planning to enhance their customer and user experience significantly. While cloud capability has become commonplace, GBS are increasingly leveraging cloud as an enabler for their tools and capabilities, such as, but not limited to, automation, ERP, workflow tool and analytics.

GBS organizations are increasingly shifting away from the traditional roles associated with shared services centers (SSCs), embracing a broader portfolio of functions, dismantling silos and positioning GBS as a growth partner within organizations. In a survey analysis, Deloitte found that 53 percent of organizations have already implemented end-to-end processes, and 32 percent are planning to implement in the next three years

The next generation of SSCs is expected to drive improved customer service interactions, increase end-to-end collaboration and processing and utilize new capabilities to transform the organization. To serve this demand requires the old GBS model to be subsumed as part of a more comprehensive model. 

With a focus on structure and technology, it is equally important to focus on the type of talent being brought into the GBS. As GBS faces the future, the ability to adapt and nurture talent will be paramount. Per Deloitte’s survey and analysis, 64 percent of organizations indicated that “talent availability” is the top factor impacting their GBS footprint strategy. By investing in a skilled, agile workforce, CEOs can create a GBS that can thrive in the changing landscape and materially participate in the strategic conversations, no longer anchoring on just efficiency and hyper-focused on customer and user experience. The next generation of GBS is expected to drive better customer service interactions, increase end-to-end collaboration and processing, and utilize new capabilities to transform the organization. In competing for talent, GBS can provide a strong capability in accessing large and diverse talent pools for the organizations. But to retain and strategically leverage this talent, organizations need to take a renewed look at their workforce and hiring structure, upskilling opportunities and talent experience.

According to Deloitte’s survey, with the organizations’ move from the GBS model to the center office model, there is a deployment of newer, interaction-heavy functions, such as engineering and R&D, indicating that GBS is transitioning from “labor arbitrage back-office center” to a “strategic partner and central business organization.” The natural progression in the marketplace is to rebrand and empower the center office, making it a driver of growth and value creation in the organization.