Category: Shared Services/Global Business Services Centers

Shaping the Future-Ready Workforce in GCCs: A Critical Component of Future-proofing | Blog

Enterprises today must prioritize building and scaling next-generation products, platforms, and services to stay competitive. This blog explores how Global Capability Centers (GCCs) are helping to navigate these challenges by fostering a future-ready workforce through innovative learning strategies, modernized job architectures, and advanced technology solutions.

In today’s rapidly evolving digital landscape, the prioritization of building and scaling next-generation products, platforms, and services has become paramount for enterprises. The imperative for accelerated digital transformation profoundly influences the speed of planning, execution, integration, and outcomes. As technological advancements, including artificial intelligence (now, with in-roads into generative AI), automation, and machine learning, continue to reshape industries, enterprises must adapt swiftly to maintain competitiveness. Amidst this drive to develop specialized capabilities, a critical question persists in boardroom discussions: How can an enterprise ensure its workforce is future-ready?

Over the past decades, GCCs have exhibited remarkable resilience in their operations and delivery, despite facing macroeconomic challenges and business downturns. This resilience is evident in their significant improvements in Net Promoter Score (NPS), spearheading end-to-end process transformations, delivering value beyond cost savings, and achieving a higher degree of integration with enterprises. Additionally, they managed to navigate the era of the Great Resignation with limited operational breakages and are now tackling the complexities in optimizing the cost pressures.

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Why Your Employer Brand Matters: Key Insights from Top GBS and Tech Talent Reports | Blog

Amid economic challenges and a cautious business outlook, maintaining a positive brand image is not just important – it’s vital. Specialized skills are more critical than ever, making the attraction and retention of top talent a key objective for organizations. Exceptional talent is the golden ticket, and GBS and tech employers must revamp their approach to building, maintaining, and strengthening their employer brand in local markets. But let’s face it, it is easier said than done.

What the latest research reveals

In its third iteration, Everest Group Top Employers research dives deep into the employer brand perception of over 380 leading GBS employers across India, the Philippines, and Poland and over 430 leading tech employers across India, the US, and the UK. This study isn’t just about ratings – it’s a mirror showing how prospective employees view you across critical dimensions like compensation, work environment, work-life balance, culture, leadership, career development, and diversity. Both reports reflect employee and candidate sentiment, offering a raw, unfiltered view based on publicly available information. We continue to track this market and refresh this assessment annually.

Want to know how you stack up against the competition? This is your blueprint.

The cold, hard truths

• Brand perception is on a downward spiral: Since 2022, employer brand perception for both GBS and tech employers has plummeted. GBS perception fell by 3% in India and the Philippines. For tech employers, brand perception dropped by 2% in India, 5% in the US, and a staggering 10% in the UK. These figures aren’t just stats—they’re a wake-up call. Brand perception is volatile, and if you’re not constantly investing in your EVP, you’re falling behind
• Volatility is the new norm: Employer brand perception is as stable as a house of cards. Last year’s top employers have faded – 40-45% of top employers have fallen from grace
• Career development is a dealbreaker: A lack of investment in career development and upskilling is a major turn-off for employees. GBS ratings in this area have dropped by 7% YoY in India and the Philippines. For tech employers, the drop is even more pronounced, with ratings falling by 8-12%, especially in the UK. This is a clear signal: employees want growth opportunities, and if you’re not providing them, they’ll look elsewhere

Busting the myths

• Big doesn’t mean better: Think your size will save you? Think again. Some of the largest GBS entities are getting slammed with negative feedback. Size isn’t the silver bullet
• Old isn’t gold: Longevity doesn’t guarantee success. Many companies hit their peak brand perception in the first three years and then decline. Don’t rest on your laurels
• Location, location, location: Headquarters matter. North American-headquartered GBS fare better in India and the Philippines, while European-headquartered GBS do better in Poland

The outside-in advantage

Here’s the kicker – understanding and leveraging outside-in brand perception might just be your secret weapon. This perspective offers invaluable insights into how prospective employees see you.

• Validate and identify gaps in your internal pulse surveys by comparing them with your external branding strategy. See what’s working and what isn’t
• Align your internal strategies with these external perceptions, and you’re on your way to attracting and retaining top talent
• Leverage this independent outside-in assessment to supercharge your branding initiatives

Making it actionable

So, what can you do? Here are some actionable insights:

• Invest in EVP: Constantly evolve your Employee Value Proposition. It’s a moving target and requires continuous effort
• Enhance the work environment: Create a workplace that people want to be a part of. Invest in a positive work culture and flexible work policies
• Competitive compensation: Make sure your pay and benefits are at least on par with your competition. Don’t give talent a reason to look elsewhere
• Prioritize career development: Offer clear paths for growth and upskilling opportunities. Show your employees you’re invested in their future
• Embrace diversity and inclusion: Foster an inclusive environment. It’s not just about ticking boxes – it’s about creating a culture where everyone feels valued
• Stay agile: Keep your finger on the pulse of employee sentiment and be ready to adapt quickly. Brand perception is volatile, and complacency is your enemy

Conclusion: embrace outside-in brand perception

As the battle for top talent heats up, the importance of a strong employer brand can’t be overstated. The insights from the “Top GBS Employers” and “Top Employers for Tech Talent” reports highlight the need for a comprehensive, multifaceted approach to building and maintaining a positive brand image. Focus on continuous improvement in key areas, understand and leverage the connection between local and global brand perception, and be ready to adapt. The ability to respond to changing perceptions will be crucial for sustaining a strong employer brand in the dynamic global market.

In the end, the quest for top talent is relentless. But with the right strategies, you can turn the tide in your favor. Are you ready to step up your game?

See the reports

The Top GBS Employers™ in India, The Philippines, and Poland

The Top Employers for Tech Talent™ in India, the US, and the UK

Market Share for Global In-house Centers (GICs) Strategically Shifting | Blog

An increasing number of companies have started their own Global In-house Centers (GICs) (also known as captives), and companies that have existing GICs have been expanding the scope of what those GICs do. This surge in GIC build and expansion is coming at the expense of the third-party services market.

Why Don’t GBS Leaders Last Very Long? | Blog

Earlier this month, I was asked by my friend Niklas Oldiges why GBS leaders seem to be moving jobs at a higher than usual rate. And as a sucker for a good provocation, I took the bait, pondering why some of the industry’s best and brightest don’t seem to be able to hold onto a job. Is it the nature of the beast—does GBS as a model attract more than its share of job hoppers? Is the model so fragile that short tenures are de rigueur (see Another One Bites the Dust: Why GBS Organizations Are Pulled Apart )? So, I sat down to parse out the root cause.

Based on some research, I’ve come up with the observation that any GBS leader who celebrates a four-year anniversary—or more—is indeed a rare bird. While some are turfed out and others decide to leave of their own volition, the fact remains: the majority either get the model up and running then go where they think the grass is greener or fall prey to a business context that doesn’t “get” the model.

Don’t believe me? Well, one day I was surfing LinkedIn and notching the tenure of a sampling of GBS leaders. Seems to me that, based on that sample, only 20% change jobs each year. And other studies—some of my own and those of search consultants—confirm the fact.

Now before you think I am dissing GBS careers, please know that nothing could be further from the truth. I can’t think of too many leadership opportunities with the scope to make an indelible imprint on the enterprise, with so many (solvable) challenges and a myriad of tactics to deploy. Add a global stage and purview across the enterprise, and what’s not to like?! So, consider this in the spirit it was intended—does the beast of running a GBS drive mobility, or do GBS leaders shoot themselves in the proverbial foot?

Let’s unpack this, first looking at the model. Does the revolving door result from:

• The nature of the beast? Continual evolution of the model requires different leaders at different stages. Enterprises tend to go to market with an “I want one of those” (rockstars from a company they want to emulate). What they don’t get is the continual evolution of the model means that the right leader persona at the helm at the right time makes all the difference. Some are good fixers, some are good orchestrators, some are experts at driving change. Want to know which persona is right when? Take a gander at (What’s your GBS and Shared Services management persona?).
• Churn, churn, churn? Revolving executive sponsorship strongly impacts the GBS thesis. How many GBS leaders have endured three or more CXOs in a short span of years, being forced to change direction because the next dude at the top of the house has a different view of GBS’s value or is imposing a new mandate? The ultimate in agile models, GBS—and its leader—has to adapt or risk deconstruction. And sometimes it’s nigh on impossible for the incumbent leader to do so, forcing them to exit stage right.
• Knives out? Since GBS represents for many enterprise leaders a loss of control or the building of new empires (because they don’t know how or refuse to work collaboratively or virtually) it can be the focus of high-stakes political games. As a target that’s not hard-wired into the enterprise’s fabric, GBS models and their leaders can become collateral damage.
• GBS positioned as a (not so blunt) instrument? GBS models are imposed to transform the way the business works; therefore, they and their leaders become the symbols of often unwelcome or misunderstood change.
• No way up? Moving to another enterprise leadership role is often not in the cards for GBS leaders. Enterprises often “forget” that a GBS leader has the capability to go into the business or become a COO or similar role. As a result, the only way to advance is to leave.
• Throw-away mentality? Is the GBS model synonymous with fungibility in the enterprise? Some enterprises see the role as temporal—get centers and capabilities up and running, then turn the operations over to their respective client functions or the business.

And how do leaders screw up?

• Tone deafness? Leaders, especially those brought in from the outside, sometimes don’t pace change at a rate that the enterprise can absorb. Rather, they may read the mandate as “make change in a hurry” as opposed to listening intently to their stakeholders and customers and moving accordingly. When tissue rejection occurs, said leaders find themselves escorted out the door.
• Grass is always greener? Some GBS leaders are always on the hunt for new roles, comparing themselves against their peers. And when they see a company where the brand is believed to be better, the scale and scope are larger, and the pay packet is amazing, their heads can be easily turned. But in the search for fame and glory, many candidates are too dazzled to ask the right questions, and do not bother to assess the “fit” with the enterprise’s vision for GBS, its tolerance for change, or its ways of working. It can be a vicious cycle.
• Inability to master the secret handshake? Some leaders, usually those bought in, find it difficult to form critical networks and integrate into the culture quickly enough. By comparison, those brought in from a function or the business have a leg up when it comes to assimilation.
• Boredom? GBS runs in cycles—transform/run/transform/run. Some leaders are good at making change in the business; others run the business. Transformers seem to have shorter attention spans and may not like silent running. So when the change is nearing completion, they move on.
• Perpetual motion? When GBS leaders start to hop from role to role, they tend to keep hopping (trust me, I see it all the time).

So, what does all of this suggest about GBS leader tenure?

• Role mirrors model. GBS models are by their very nature designed for ephemera. They form, they change, they deconstruct, they rise again from the ashes. This puts pressure on the leader’s longevity.
• Lack of enterprise career paths forces folks out. When the leader’s ambition is to master new roles and deal with new challenges, and their enterprise looks at their role as separate and apart, orphaned and not on stated succession plans, it makes it difficult to stay.
• Corporate fortunes have a high impact on the role. Enterprises acquire or spin-off businesses, impacting scale, which in turn drives value creation. GBS requires investment at various stages in its lifecycle, often.
• Enterprises like shiny new toys and don’t always hire the right leader. Brands often play a big role in hiring; it’s easy to look to an admired company and snatch the person at the GBS helm only to find out that the culture and context are so very different, resulting in a mismatch.
• Few GBS leaders are transformers/operators. GBS value creation is a long game, requiring a leader to have both change and run skills. Yet those with both capabilities can be rarer than unicorns, causing high levels of mobility at certain junctures in the GBS lifecycle.
• When the going gets tough, those that are not tough get going. GBS leadership roles are not for the faint of heart. With new formations and short tenures the norm, a flattering call from a headhunter on a bad day can prompt a move.

Now you have it—my take on why new GBS role announcements have become almost a daily occurrence. Some mobility is driven by the enterprise, but just as often, leaders don’t do their homework and end up in the wrong environment, or like to hop, hop, hop. Will we see greater longevity? Don’t count on it.

Will India’s Permanent Establishment Tax Disrupt the Global Business Service Landscape? | Blog

As India’s prominence in Global Business Service (GBS) grows, staying updated on tax laws and adapting agile strategies is essential for multinational corporations to achieve sustainable growth amid evolving global business dynamics. In this blog, we delve into the impact of the Permanent Establishment (PE) tax within the realm of GBS.

As global corporations continue to increase their reliance on the GBS model, taxation policies will also continue to play a crucial role in shaping the strategies and operations of these corporations. One such policy that holds significant importance, especially in the context of India, is the concept of the permanent establishment tax. As India continues to assert itself as a key player in the global economy, understanding the implications of PE tax becomes imperative for global corporations operating within its jurisdiction.

Understanding permanent establishment tax:

Permanent establishment refers to a fixed place of business through which an enterprise carries out its business activities, either wholly or partially. The concept is pivotal in international taxation as it determines the jurisdiction’s right to tax business profits earned within its territory by foreign enterprises. In India, the concept of PE is governed by both domestic laws and Double Taxation Avoidance Agreements (DTAA) with various countries. For example, if a foreign company expands its operations within India, the income derived from such activities becomes taxable in India.

Article 7 of the UN Model empowers the source state, like India, for instance, to levy taxes on profits linked to a PE within its borders. A PE, as outlined in Article 5(1) and mentioned above, denotes a fixed place of business where the enterprise conducts its activities, either wholly or partially. This principle hinges on some key factors, such as the existence of a physical business location, the right to use it, and the engagement in business activities therein. Each criterion holds its specific benchmarks for validation.

Additionally, supplementary articles clarify concepts like the definition of a “fixed place of business,” the concept of a supervisory PE, and exclusions from the PE definition. When tax authorities evaluate the presence of a PE, they undertake a comprehensive analysis. This analysis involves reviewing actual operations, legal frameworks, and judicial precedents. Various elements undergo scrutiny, including business models, transactions, strategies, human resources, physical offices, and warranties. This exhaustive analysis aims to establish whether the criteria defining a permanent establishment are met, ensuring compliance within the international taxation framework, and avoiding tax evasion or avoidance.

Potential impact on the GBS market:

GBS encompass a wide array of activities, including IT services, back-office operations, finance and accounting, HR services, and more. Many multinational corporations leverage India’s skilled workforce and favorable business environment to establish their GBS centers in the country. However, discussions surrounding PE taxation have prompted GBS leaders to assess its potential impact on their operations in India. Here are some key considerations:

• Taxation on business profits: Establishing a PE in India subjects the foreign enterprise to taxation on the profits attributable to the Indian operations. This can significantly impact the overall tax liability of the corporation, requiring meticulous tax planning to optimize the tax structure while ensuring compliance with Indian tax laws
• Transfer pricing regulations: GBS centers often engage in intra-group transactions, such as the provision of services to affiliated entities. Indian transfer pricing regulations mandate that such transactions be conducted at arm’s length prices to prevent profit shifting. Non-compliance can lead to tax disputes and penalties, further underscoring the importance of robust transfer pricing documentation
• Compliance burden: Operating through a PE entails compliance with Indian tax laws, including filing tax returns, maintaining books of accounts, and adhering to reporting requirements. Ensuring compliance can be resource-intensive, necessitating efficient tax management systems and expertise in Indian tax regulations
• Strategic considerations: The implications of PE tax influence strategic decisions regarding the structure and location of GBS. Enterprises must weigh the tax implications against other factors, such as talent availability, cost-effectiveness, and regulatory environment, to optimize their global business operations

Voice of India GBS leaders

Based on our conversation with the India GBS head across different industry verticals, we understand that while PE remains a topic of interest, the issue of PE tax is not a primary concern among GBS leaders presently. Here’s why:

1. a) Place of effective management: Currently, the criteria for a foreign company to be deemed a resident in India is if its control and management are wholly situated in India. However, GBS leaders highlight that the control and management of most processes still reside with global process and business owners located in onshore markets, not India. Consequently, the India center cannot be classified as the “place of effective management,” and thus, PE implications should not apply
2. b) Significance of business operations and revenue: While GBS leaders acknowledge the maturity and integral role of India centers in enterprise operations, they emphasize that revenue-generating activities primarily occur within onshore entities. Hence, their argument leans toward the idea that taxation should only be done in onshore markets. However, there is acknowledgment, particularly in the pharmaceutical and life sciences verticals, that India conducts substantial R&D work, which often leads to revenue generation for the enterprise. Consequently, GBS leaders recognize that India centers, especially those engaged in R&D, may potentially be subject to PE taxation

Conclusion

As India continues to bolster its position as a hub for GBS, understanding and effectively managing the implications of permanent establishment tax is paramount for multinational corporations. By adopting proactive tax planning strategies, ensuring compliance with regulatory requirements, and leveraging available tax treaties, businesses can navigate the complexities of PE tax while capitalizing on the vast opportunities offered by the Indian market.

Given the significant role PE plays as a contentious issue in international tax frameworks, it is imperative for foreign enterprises to proactively engage with India’s domestic taxation regulations and seek local expertise for compliance. GBS leaders should collaborate with various stakeholders, such as India and global legal teams, taxation experts, and finance teams, to assess and mitigate the risks associated with PE for their India operations.

In the dynamic landscape of global business, staying abreast of evolving tax regulations and employing agile strategies are essential for sustainable growth and success. As India’s economy integrates further into the global marketplace, the significance of permanent establishment tax in shaping international business dynamics is poised to grow, emphasizing the need for businesses to adapt and thrive in this evolving tax environment.

Watch our Conversations with Leaders sessions to hear from GBS industry leaders. In episode 10, they’ll discuss ways to develop powerful GBS execution strategies to successfully blend GBS and enterprise efforts.

Respect the DNA | Blog

Not too long ago, I was chatting with one of my Global Business Services (GBS) leader friends who was talking about filling a critical GBS vacancy with an internal, non-GBS native. We pondered whether that was a good move. And it came to me—because the skills and capabilities required for the job trumped deep GBS knowledge, he was respecting the DNA of the company by appointing a colleague from another part of the business.

All too often, GBS organizations are seen as a graft onto the enterprise, a unit standing apart, for a range of reasons. Sponsors don’t spend the effort to support the concept that GBS is of the business, not on top of it. Stakeholders position GBS as a scapegoat, not part of workflow. And because leaders often lean toward GBS tribal hiring—often from their former gigs—the concept of GBS as a separate team is amplified. While lack of sponsorship and positioning can be eliminated over time with change management and education, the last—hiring from the outside—is totally in the remit of GBS leadership. Big miss, folks, exclusively hiring GBS natives into the leadership from the outside and not respecting the DNA. Every leader doesn’t have to be able to recite GBS concepts book and verse to deliver tangible value to the enterprise. In the right environment, and often in the right roles, internal hires can not only deliver exemplary performance, but they can also elevate GBS acceptance, value, and sustainability.

Why is respecting the DNA so critical?

Getting down to the heart of the matter, GBS can’t afford to disregard internal talent, both politically or financially. Here are some of the benefits:

• Endorses GBS as part the fabric of the enterprise, not separate and apart. When the GBS team is comprised by outsiders, it can send a message that suggests that those in the business are not capable of transforming or operating, and that institutional knowledge has no value.
• Lends credibility. If internal high performers think GBS stints are worthwhile, GBS’s credibility can advance several notches.
• Messages that a GBS stint is a critical part of corporate career progression. GBS then becomes a vital component of the enterprise’s career path.
• Creates a network of endorsers. When a leader has had a rotation through GBS and they become champions, commonly held myths and beliefs can be debunked.
• Accelerates the productivity curve. Internal hires have established networks. They know where the skeletons are buried and can advise the new kids on the block.
• Expands the talent pipeline. At times, talent pickings in the market are slim. Looking internally can expand the pool exponentially.
• Grounds external hires. “Savior syndrome” is real when an exclusively external team runs the show. A blended organizational DNA keeps the GBS team honest.
• Helps GBS create measured change. Internal hires understand how hard to push, and when to back off.
• Improves sustainability. It may be easy for management to deconstruct a GBS that is primarily comprised of employees that the enterprise considers “outsiders.” It’s another thing entirely to release respected, long-tenured staff.

How does a GBS leader put “respect” into action? Whether starting a GBS from scratch, rebooting the model, or managing a mature organization, the strategy remains the same:

• Maintain an open mind. Failure of a GBS organization to perform is more often than not down to poor leadership; the root cause of subpar performance is due the quality of the entire team. Take the time to evaluate existing talent and figure out what capabilities GBS needs to thrive.
• Hire talent for sustainability, not roles. When we evaluate talent, we tend to think about the opening at hand. However, when we also put talent through the lens of GBS goals and the capabilities required to achieve them, the criteria may very well change.
• Create job descriptions that align within the enterprise. GBS capabilities are not separate and apart from those that currently fuel operations. Take the time to review functional and operational roles in order to better align them.
• Work with HR to map roles—don’t go rogue. It’s vital to use the same job families, hierarchies, and language. We think GBS is special, but it’s not. The skills and capabilities that fuel performance in other parts of the enterprise are often over 90% similar in GBS; only the model and the language is different for many roles.
• Go shopping. Ask other leaders for recommendations. As you interact with others in the enterprise, take their measure. Can they add value based upon what they do today? Can they move the goalposts because they have capabilities that will challenge GBS thinking or future-proof the organization? Are they a good fit, and will they add stability and sustainability?
• Set up a formal GBS rotation. Too few GBS organizations take advantage of tours of duty. They are a great way to test and try internal talent.

Formalize a “GBS for the uninitiated” program. GBS isn’t rocket science, nor is it mysterious. Supporting internal hires by giving them a bit of education will set them up for success.

Last, you are probably asking whether there’s a cheat sheet to determine which roles are best filled internally, and which require outside expertise. Here’s a simple way to think about it:  the most innovative, evolved, and sustainable GBS organizations blend their DNA—some roles from the outside, some in.

So, the next time you have an open role, don’t run out to hire your tribe. Take the time to think about respecting the DNA of the enterprise you support. You’ll be glad you did.

The Great Debate: Global Business Services Versus Outsourcing | Blog

During Shared Services & Outsourcing Week (SSOW), March 20-23, in Orlando, “The G6 BPO Debate” tackled thought-provoking and challenging questions associated with BPO’s impact on GBS. Keep reading for the perspectives of Everest Group Partner Rohitashwa Aggarwal, who attended the event. Reach out to us to learn more.

Are you entrenched in the ongoing battle between Global Business Services (GBS) and outsourcing? If so, you will relate to this. And if not, maybe it’s time to put down those piña coladas and engage in a discourse that could reshape your perspective.

Before delving further, let’s address a glaring contradiction. GBS encompasses in-house/captive and outsourced models. However, this blog explores the the in-house GBS versus Business Process Outsourcing (BPO) debate. Let’s set aside our perfectionist tendencies momentarily and dive into the fray. While I may not share all the opinions presented here, they contribute to a broader dialog. So, read on, keep note of your reactions, and share your insights at the end.

The G6 BPO debate moderated by Deborah Kops, Founder of Sourcing Change, at SSOW aimed to take global BPO leaders out of their comfort zones and into a “not-so-safe space.” True to its promise, the panelists addressed hard questions and pushed the boundaries on what BPOs mean to Global Business Services.

Discussions covered the following five areas, as recapped below:

Round one: unveiling the top challenges for global business services

From the myriad of discussions, four messages resounded loudly:

1. GBS is not considered the most desirable career path
2. Not all GBS leaders possess the necessary skills to drive change
3. Relying solely on a do-it-yourself approach is insufficient for GBS success
4. GBS often struggles to translate lofty aspirations into tangible achievements

Before raising objections, pause and reflect on how often you’ve encountered these challenges within your teams. It’s food for thought, indeed.

Round two: global business services against business process outsourcing – survival of the fittest

In a world where Darwinian principles hold sway, who emerges victorious in the battle for supremacy? The panelists extensively discussed the advantages of scale, speed, and financial prowess. However, the potential of GBS/SSC collaborating with outsourced entities in a combined “AND” model was surprisingly absent in the conversations. The true value of GBS/SSC lies in their ability to align with organizational objectives, and it is worth examining how leading providers cultivate this trust.

Everest Group research shows that GBS is increasingly embracing hybrid models. They prefer to move select work to vendors, use build, operate, transfer (BOT) setups more frequently, and directly engage vendors/outsourcing providers for various transformation, consulting, and staff augmentation needs.

Our research also counters a comment made during the discussion that insourcing is not increasing. Over the past 15 years, in-house delivery models have grown from 20% to 30% of the mix, although outsourcing remains prevalent. We have seen a consistent insourcing trend among leading global banks, insurers, consumer packaged goods firms, healthcare and life-sciences companies, and manufacturers.

Increasingly, mid-cap companies and others are setting up in-house centers, with more than 2,000 new in-house centers established in the past decade. However, this should not be misinterpreted as the death of outsourcing.

To share three data points:

1. The outsourcing market has grown by 25% over the five years
2. The number of GBS/SSCs using a hybrid model (versus a pure captive model) has increased to almost 1.5X in the last five to seven years. This is expected to grow further
3. In the last five years, 40-50 in-house centers or entire GBS organizations have been dismantled partially or completely. This number could be even higher. Remember, not everybody survives in this industry

To conclude this point, an “AND” model must be used. Anybody who maintains a myopic view of GBS versus BPO misses the opportunity.

Read Deborah Kops’s recent article for more insights on why GBS get deconstructed and why they shouldn’t.

Round three: gen AI – gamechanger or dodo?

The debate surrounding generative AI (gen AI) was spirited but lacked definitive answers. While its transformative potential is undeniable, realization at scale remains elusive. Integration across organizational functions is imperative for maximizing gen AI’s impact.

Gen AI will undoubtedly impact the services industry over the next few years. It is important to remember:

• The full stack of automation and AI capabilities will drive this change
• To reach its full potential, AI solutions must be integrated end-to-end across the retained organization, GBS/SSC, and outsourced teams

GBS leaders should focus on implementing AI or other solutions in the right areas quickly and efficiently rather than building them from scratch. Vendor expertise should be leveraged to develop gen AI solutions (remember the “AND” model). With their vested interest and greater resources, providers will ensure expedited implementation and scalability.

Round four: decoding the success formula for GBS leaders

As expected, the panelists emphasized the importance of stakeholder management, change management, and adaptability. However, the crux lies in GBS leaders’ ability to earn the coveted status of “trusted advisor” to business counterparts. This requires a deep alignment with organizational goals that transcend the traditional service provider-client dynamic. Few GBS leaders can claim to have achieved this position. Link this to my point on the number one value proposition for GBS, and this becomes an imperative, not just an aspiration.

In an era marked by upheaval and turmoil (the pandemic, recession/slowdown, talent and trade wars, real wars, geopolitical tensions, increasing environmental concerns, and so on), GBS leaders’ ability to “meet business leaders where they are” will be a crucial success factor. And please don’t make this a turf war; an “us versus them” mentality is a recipe for disaster.

Round five: preparing for the future – a call to action

To sum up the points made during the debate, Global Business Services leaders must heed the following six imperatives:

1. Enhance their business knowledge and understanding
2. Communicate GBS value based on tangible outcomes
3. Prioritize stakeholder experience
4. Reengineer processes for efficiency
5. Invest in talent upskilling. Remember, “AI won’t take your jobs; somebody who knows how to use AI will.”
6. Embrace collaboration with vendors for mutual value creation

Now is the moment of truth for GBS leaders: Seize the opportunity to drive value or risk being sidelined. As Yoda sagely proclaimed, “Do or do not. There is no try.”

Do these insights resonate with you? Share your thoughts by contacting [email protected].

Hear more from Everest Group Partner, Rohit Aggarwal, in the LinkedIn Live series, Conversations with Leaders, Episode 9.