10 Tips on

Succeeding with GBS:

from the experts
What makes GBS a success? We surveyed 10 of the most respected GBS leaders in SSON’s global
database to identify how they are making great strides to deliver superior performance through
their operating model. They highlight governance frameworks, talent strategy, leadership style, and
value-add. What emerges is a cheat sheet based on first hand experience on how to outperform in
global service delivery.

The most significant advantage of GBS is the ability to manage global processes and technology in the same
way around the world, via standardized system solutions; global service management standards; global
governance boards; etc. This is becoming only more important, as automation enters the picture, and strong
process ownership becomes much more important in a world where Intelligent Automation trumps moving
transactions to a low cost location.

As with so many things, seeing is believing, so we have brazenly stolen the best and most candid tips
and insights from 10 GBS leaders to help you achieve more.

1.Today’s Imperative: organizational agility

One of the key characteristics of a successful enterprise. Today, the market is forcing change so CEOs need
flexible business services structures that can respond quickly, anywhere in the world, via global operations,
global talent and global technology. Yet, few are currently at the stage of being agile enough to reconsider
their enterprise strategy, structure, processes, people, and technology at the speed required.

Global Business Services can deliver this, however the integrated nature of operations; the ability to tap into
resources wherever this makes most sense; the ability to switch resourcing across regions or indeed, into
automation; and leveraging the unique insights to enterprise data … all of this makes GBS the enabler of digi-
talized, agile, global operations; perhaps even the silver bullet in the face of the shifting business landscape.

Kai-Eberhard Lueg, Head of Business Process Shared Services and Finance Shared Services, Siemens, sees
Shared Services in a triangle relationship, driving digitalization across the enterprise: “With our profound pro-
cess management knowledge (and, at least equally important, our strong innovation culture) we are the link
between corporate IT and our customers,” he explains. “By improving and simplifying processes, we develop
innovative solutions and drive digitalization within Shared Services and beyond.”

Increasing digitalization possibilities now allow for a more individual approach, Kai-Eberhard adds. In some
cases, Shared Services expertise can even support improvement and digitalization of processes on the cus-
tomer’s side first.
2. Leveraging a global footprint in the smartest possible way
As integrated operations are doing away with silos, today’s enterprise can reach across the world to tap into
the services and skills it needs, when it needs them, in order to deliver optimized service. But this does not
mean ‘centralization’ in its strictest definition. Many GBS leaders are successfully combining global and local
[glocal] services via a hub and spoke approach.

Swarovski, for example, is successfully deploying this strategy as Marcel Angst, Executive VP, GBS explains:
“We run our main hub in Poland, set up just a year ago, and two spokes – one in Malaysia launching this
quarter, and one in Costa Rica, launching early next year, for APAC and the Americas respectively. That pres-
ents our global footprint. Our assumption is that we can do anything out of the hub but where we find that
due to language, time zone, or other proximity issues we require a more regional approach, we shift services
to the spokes,” he says.

So, whereas record-to-report or master data management is done at the global, hub level, much of order-to-
cash or procure-to-pay is be done in the spokes, for Asia and the Americas. Swarovski’s business model is
also characterized by more than 1400 ‘own’ stores, which have specific language requirements.

“These are serviced from the spokes, or even from local retained operations,” Marcel explains.

Eltel Networks also operates a global transactional hub in Poland, while each country has a retained country
office. “Given our broad functional scope, the country units are very relevant, not just the global hub,” ex-
plains Jan Nikus, Global Shared Services Director.

3. ‘Halfway there’ works, too

You don’t have to implement ‘true’ GBS to benefit from its advantages. Many organizations have evolved to
a halfway house - leveraging some of the characteristics (and harvesting some of the wins) while avoiding
more sensitive issues associated with GBS implementation. Less than half of the current roughly 200 GBS
centers are fully implemented – six out of 10 are still in ‘partial implementation’ phase, according to SSON
Analytics.

The truth is, for many businesses GBS is not the right solution, and though enterprises may want to target
‘the best’, ‘just short of the best’ may be absolutely good enough.

“We don’t operate what you might refer to as a ‘traditional GBS structure’ in Shell,” explains George Connell,
VP Finance, Strategy Operations, Royal Dutch Shell. “We operate a functional Shared Services model, where
each function in the Centers reports directly through their functional line [Finance reports to the CFO; IT to
CIO; Customer Services to Commercial Operations; etc.] The locations are named Shell Business Operations
and the team that operates these acts as a ‘landlord’, providing common infrastructure support – offices,
facilities, IT infrastructure, health & safety, HR and communications.”

SBO does not have responsibility for operational performance, George adds. The direct reporting line for
process performance is through the ‘tenants’ – the functional lines.

“This model provides all functional areas with the best support and liberates the tenants to focus on
process performance,” he says.
4. Global Process Ownership drives better E2E performance
Standardized, end-to-end services are, most GBS leaders agree, key to a successful model. Where the entire
end-to-end P2P process is not owned by the GBS – say Procurement is owned by Supply Chain and sits
outside it – there are limits to what you can drive. “To leverage a true GBS model you need to operate in a
post-functional stage of service delivery, with cross-functional integration to optimize service by combining
different functional teams together,” explains Andrew Jackson, Head of Global Shared Services at Anglo
American PLC.

Where GPOs are present, the benefit in terms of continuous improvement and process (re)design are clear.
And whether they sit within the GBS or not, their ownership of the end-to-end process, even that which might
sit outside the remit or scope of GBS, puts them in a potentially highly strategic position. Their ability to col-
laborate with those who sit in the business, means they can impact the front end of a process to identify,
communicate, and enable performance improvements across the entire Sales or Supply chain. The key is to
build their competencies such that they can initiate these strategic conversations.

Probably the most important characteristic in a GPO is strong lateral leadership. “What’s key is to find some-
one who won’t shy away from digging deeper,” says Swarovski’s Marcel Angst. “One could argue that GPOs
are effectively ‘tigers without teeth’ – accountable for the results and continuous improvement but not
directly responsible for delivery. At the same time, they need to represent the corporate side: the strategies,
policies, and controls that corporate expects. We are positioning our GPO roles at a high level, reporting
directly to me, to provide the proper context of their importance within our organization.”

At BAT, the GPO model has helped tremendously in standardizing processes across the enterprise’s 21 mar-
kets, Sanjay Patel, Group Head of Global Business Services, says. “The GPOs operate from the GBS itself as
this offers the advantage of understanding any variations in the processes and fixing them at source.”

Indeed, GPOs are becoming more important, as automation enters the picture:

“Strong process ownership becomes much more important in a world where Intelligent Automation
trumps moving transactions to a low cost location,” explains Jan Nikus of Eltel.

5. GBS rests on integrated technology – but the trend is opposite.

GBS tends to assume a monolithic ERP platform, but that is more often than not a tough hurdle to get over,
says Anglo American’s Andrew Jackson. “Wall-to-wall SAP is probably not the objective of most corporations,
these days, with better and more seamless integration capabilities.”

In addition, he says, IT strategies are evolving in a direction where they are actually becoming more flexible
– which, in some ways, works in the opposite direction.

Anglo American operates with more than 20 ERP systems within Finance and Accounting alone, and two in
HR, “so we are some way from the kind of consolidated systems that are required for aggressive process
standardization,” Andrew concedes.

A key barrier to standardization, in other words, is the underlying systems environment. But one solution
might be to overlay the system with business process management, he suggests, “which means you could
leave the underlying system intact while defining a common way to interact.”

That certainly explains partly the move towards digitization that is driving a lot of GBS leaders to rethink what
they are doing and how they are doing it.
6. Think about Leadership talent when launching your centers
Developing and retaining talent within GBS leadership is a critical objective. Recruiting internally is an advan-
tage, as there is greater awareness of the internal ways of working and it is easier, therefore, to manage both
internal and external stakeholders, explains Bobby Abraham, Managing Director & Chief of Transformation,
Barclays.

“We deploy an intelligent location strategy: all our 7 GBS centers are based in countries where we have a
leadership position in our mainline telecoms business – e.g., Hungary, Romania, Egypt and India. This helps
in attracting senior leaders from the front end of the business, which supports the business understanding
required to operate the GBS effectively.”

BAT’s Sanjay Patel emphasizes the value of functional experience to GBS, and vice versa: “At BAT we actively
move talent between the GBS and the functions, and vice versa. All my leadership team members came from
the functions and we have stated that future leaders of functions need to have done a stint in GBS.”

Right now, the priority for GBS leaders is to refocus staff to remain relevant in an increasingly automated and
digitized work environment. “That opens up a whole new playing field,” says Chris Gunning, Global Shared
Services Finance Operations Lead at VEON. “We now see digital transformation also moving into core areas
of business. What that means is once we build up relevant experience in support services, there’s no reason
we could not apply this to front office functions like Marketing or Sales. It gives us the confidence to play on
the global stage.”

7. Drive a culture that supports higher order thinking capability

GBS leadership has a strong card to play in tapping into global resources and capabilities to deliver optimal
service. It is, however, a not inconsiderable challenge in the face of politics, culture, and external econom-
ics to identify and establish these global centers, says Andrew Jackson. “Culture is key,” he says. “Can you
shift from transactional processing towards new opportunities like data analytics? How quickly can you get
there?”

If you consider the traditional triangular pyramid standing on its base, with leaders at the top, thinkers in
the middle, and a broad base of doers at the bottom, says Andrew – “we now need to transform this into
a diamond standing on its end: the thinkers need to be expanded in both scale and scope by shifting roles
traditionally associated with doers into higher order thinking capability. That’s certainly the way the market is
moving but it’s a tough change to make. And, if you don’t promote the right culture in the organization, it will
be a stretch to get there.”

Indeed, there is a lot more around Analytics, Corporate Tax, and Treasury that would make sense to service
from within a GBS, adds Chris Gunning. “We have already moved up the value chain and are currently pro-
viding these services out of our Pakistan Centre. It certainly makes sense to consider some of the retained
services further down the line, as well as looking for examples to build capabilities for Centers of Expertise
for Robotics, RPA and Analytics,” – but none of this will take hold if you have not set the groundwork in terms
of an enabling culture that is open to change.
8. Faced with RPA don’t discard offshoring yet – but do rethink it
The emergence of digitalization, and specifically RPA, has fired up a discussion around the continuing rel-
evance of offshoring and outsourcing. “The emergence of digitalization really changed the equation for us,”
explains Andrew Jackson, “as I could see that what service providers are doing with RPA and automation to
a certain extent mirrors what happened 15 years ago, with offshoring.” The question is, he continues, how are
service providers passing on efficiency benefits to the client?

“We decided that we were probably better off doing that automation work ourselves and reducing the cost
of change but retaining the full value of automation,” he explains. “South Africa certainly offers the labor
arbitrage that drives Shared Services, so the model still works for us, but if I were in the US or the UK, I think
I would certainly be reconsidering offshoring’s significance. It’s not the end of offshoring [or outsourcing] by
any means, but the business model will need to evolve to drive more benefits to the end-user.”

Steve Rudderham, VP GBS, Kellogg Company, agrees: “It’s now all about how to leverage global talent,
regardless of onshore, nearshore or offshore, and automation and intelligent automation will be key enablers
to allow this talent to focus on the value add work to an organization.”

In fact, Robotic Automation should reduce the need to offshore for cost or even global talent leverage, as
more roles become automated. Offshore still has significant role to play, but more for the value-add – which
will pressure BPOs to move to outcomes-based contracts, instead of FTE/volume-based contracts, “which
are very old school” as Sanjay Patel says. “RPA is proving to be a big game changer.”

However, it’s not the end of offshoring, Kai-Eberhard Lueg reminds us: “As long as activities are performed
manually, offshoring will remain important. Not only from a location cost perspective, but also with regard to
bundling effects, transparency, and because Shared Services typically have invested many years in a culture
of change and innovation, a great basis for further improvements.”

9. Is your reporting line too risk-averse?

The reporting structure can make the difference between a successful transition or a bumpy failure to launch.

Most of the GBS leaders we spoke to report to a Global Head of Finance, or the CFO, but one individual
stood out for a truly unique reporting line which is certainly worth considering:

“I must have one of the most unusual reporting structures in GBS in that I report directly to the Head of M&A,
who is also the Corporate Development Officer,” he explains. “I think our CEO was a genius in setting it up
this way – because the Head of Corporate Development is basically a business deal maker. His number one
concern is to enhance the value of the company in the eyes of the shareholder.

“This requires being financially astute, i.e. understanding the numbers, but it also means that you have to
inherently be prepared to take a risk for a return. A lot of GBS positions report to the CFO who is inherently
risk-averse. I also know some GBS heads that report straight to the CEO, though I would question whether
that is the right line. CEOs are concerned with revenue streams – and GBS is a cost.”
10. Make clear that ‘value add’ is not just measured in money
GBS derive their basic value proposition from labor arbitrage, just as Shared Services do, but beyond this is
where the GBS model flexes its muscle to deliver exponential value. What GBS offers is the ability to target
bigger prizes where the value derives from delivering on the commercial side, rather than ‘fixing’ a process
or saving money. Key to this are process experts, combined with Lean or Six Sigma thinking.

For example, in the Source-to-Pay process, a GPO’s ability to look beyond Procurement’s focus on improving
supplier deals, and instead look at how contracting could be improved, or how pushing out terms could drive
positive cash flow, is the differentiator. Another important driver of value is discipline. Basic Shared Services
models don’t filter up to operations as readily as GBS do, not can they enforce discipline across global op-
erations, and thereby prevent individual regions from pushing ahead with duplicate processing activities.

In addition, improved decision-making, the ability to enable and drive transformation, and the global distribu-
tion of best practices all roll up into value created by GBS. In fact, it is the ability of GBS to integrate and glob-
ally deploy additional capabilities, like Sales & Marketing, that highlights the power of this model. Through its
global, integrated scope, GBS is able to drive transformational initiatives and own strategic projects. Given
the infrastructure, deep process understanding, quality of talent, cross-business relationships, and project
management expertise that characterize GBS, it is a most powerfUL enabler and driver of change.

LEARN HOW TO LEAD YOUR TEAM TO EXCELLENCE AT :

14-17 MAY 2018

LISBON, PORTUGAL

European Shared Services and Outsourcing Week (SSOW) is back for it’s 18th year!

For 2018 we’re coming to Lisbon to help you fast-track your service strategy and achieve
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