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GBS Change Management Strategies: Lessons Learned from 60 Leading GBS Organizations | Blog

January 5, 2023

Change management is viewed as critical by 75% of GBS organizations, but only 16% manage change as an essential component of GBS initiatives, a new Everest Group study found. Read on to learn best practices and key findings from this first-of-its-kind change management research.

Insights can also be found in our webinar, Why GBS Change Management is the Key to Added Value and ROI, as Everest Group experts discuss effective change management practices gathered from the research.

Change management is essential for any Global Business Services (GBS) organization, yet it is also one of the more challenging feats to grasp and implement. Change for GBS is a constant occurrence, whether it’s new technology adoption, stakeholder gains and losses, or evolving roles within the enterprise.

Strategic and systematic change management gives GBS organizations more control over transformation projects of all sizes. It allows for adaptation and the opportunity to discover where more value and return on investment can be found.

In this first-of-its-kind research, Everest Group surveyed 60 leading GBS organizations across the globe and conducted in-depth interviews to better understand change management strategies within GBS organizations. The results of this study are in our report, State of Play in GBS Change Management, which provides an analysis on what GBS organizations across the globe are doing today and the steps to achieve an end-to-end change management model.

How do GBS organizations carry out change management strategies today?

From the study, we discovered that one-third of the respondents don’t have a change management model in place; however, 75% of GBS organizations see change management as critical. Watch our latest LinkedIn Live Conversations with Leaders series based on this research where GBS experts from various organizations joined our analysts to define effective change management.

Currently, change management is not part of the strategic GBS design. GBS organizations typically wait for a transition or change that needs to be communicated, and then react and invest in change management at some level rather than proactively setting up processes.

In many cases, change management is deployed within transformation projects, with roles often divvied up between a mix of sourced and in-house staff rather than being adopted from the top and then applied throughout the organization. Organizations need a thorough method to test change management from project to project, and then alter or build on it to make the model more efficient.

Where does change management show up the most?

The research showed that larger, older GBS organizations tend to invest more substantially and systematically in change management. Mature global organizations with greater scope and evolved delivery operations are more likely to prioritize change management, include it in planning stages, and have more dedicated responsibilities and capabilities.

The study revealed that most change management is embedded in projects that revolve around digital transformation efforts, such as transitioning to a new delivery model or moving to end-to-end processes. GBS organizations that embrace digitization at greater rates tend to realize the importance of change management. Seventy percent of organizations that are moving to digital are also advancing their change management approaches.

Geographically, 40% of GBS organizations in Europe view change management as having more of a strategic role in transformation, compared to 30% in North America. By segment, banking financial services (BFS) and life sciences GBS organizations incorporate change management in business transformation. However, consumer packaged goods (CPG) and 75% of manufacturing GBS organizations still consider it a communications function.

How can GBS organizations address change management?

Moving to a GBS platform creates substantial change and can impact processes, policies, technology, and even relationships. Based on our research, we recommend the following five best practices for GBS organizations to map and evolve their change management models:

Embed it from the start: One of the most significant takeaways for successful change management implementation is adding it into processes from the start and making it part of everything a GBS organization does. This helps to define roles, structure the roadmap, and determine how to measure project outcomes.

It doesn’t stop: Change management is not a one-time instance. For a strategy to garner real value and incorporate lessons learned, change management should be considered an ongoing journey for the organization and its employees. A change management framework must be consistent and tailored to the enterprise.

All hands on deck: When managed at or near the top of the organization, change management becomes a higher priority that is consistent across all change management projects. A top-down management strategy with buy-in from internal GBS teams helps to embed change management into the entire organization and negate any resistance from teams. Almost 50% of respondents said getting the internal team on board was a critical success factor.

Invest in roles and careers: GBS organizations must consider whether involving contractors or those in outsourcing roles will ultimately help or hurt the process. Cross-training and rotating team members through a change process is a very effective way to get the right team in place and break down internal resistance. To instill a regular change management model, GBS can set up a fixed set of roles that serve as pillars and variable roles for when the function has shifted. Further, to attract and retain these talent resources, establishing career paths so talent will see a future in the role and stay with the organization is essential.

Change is more than communication: GBS organizations also should understand that the buck doesn’t stop at communicating change to the enterprise. Communication is a necessary and important step, but it’s just a piece of a comprehensive change management strategy.

Where is your GBS organization on its change management journey?

To begin the change management journey, it’s important for organizations to know their starting point. From the interview responses, we identified the following four personas to set GBS organizations on the right path as they structure their change management strategy:

Headshakers are yet to establish any change management competency
Crawlers are slowly moving in the right direction
Game changers view change management as a necessity and are aggressively pursuing it
Institutionalists firmly believe in and have invested in a GBS change management program

What’s the impact of change management?

GBS organizations that don’t have a change management model, or are reactively deploying change management, could ultimately lose money and incur costs when projects are delayed or benefits are realized slower.

GBS organizations must go beyond merely communicating change to developing a managed program that considers stakeholders, capabilities, and the full impact from strategy to execution. Change management should be regarded as an investment with a clear ROI.

GBS organizations are successful based on how they respond to their stakeholders, and effective change management allows GBS to meet the enterprise at any turn.

To view our change management persona diagram and determine where you are on the change management journey, and learn the 12 steps to develop a dedicated program, download the full report: State of Play in GBS Change Management.

To discuss change management strategies further or ask questions, reach out to Rohitashwa Aggarwal at [email protected]. And don’t miss our upcoming webinar, Why GBS Change Management is the Key to Added Value and ROI, for direct insights from this study into change management strategies from GBS practitioners.

Unlock a New Source of Value Creation – Integrate Sustainability into the GBS Charter to Help BFS Firms Realize Their ESG Goals | Blog

November 16, 2022

Global Business Services (GBS) organizations have a big opportunity to champion Environment, Social, and Governance (ESG) in banking and financial services (BFS) institutions. To learn about six ways GBS organizations can help enterprises reach their ESG goals and unlock greater value, read on.

ESG is creating new opportunities for BFS Global Business Services organizations. Fast-evolving consumer awareness about social, political, and environmental values, emerging regulations, and increased demand for sustainable financial products are pressuring BFS firms to prioritize ESG goals in operations and employment.

Let’s explore the significant role GBS units can play in enabling ESG for enterprises.

ESG products and services emerge

To meet new customer and investor expectations along with regulatory mandates, BFS organizations are building ESG products and services – such as green loans, sustainability-linked loans, and carbon-neutral banking – to make their operations sustainable.

Capital market firms are embracing green underwriting, while asset and wealth managers are steadily moving toward ESG investing. These organizations are also focusing on workplace diversity, pay equity, and good governance structure to meet their ESG aspirations.

This has created a big opportunity for GBS organizations to move from being measured for their labor arbitrage and cost efficiency to the value they can deliver to enterprises. These units can become vital to the enterprise’s ESG agenda by expanding their sustainable service offerings and conducting ESG-specific due diligence and risk assessment. GBS centers’ strong visibility across the enterprise’s functions, operations, and capabilities to support their ESG initiatives will drive this new focus.

Six ways GBS organizations can support enterprise ESG goals and commitments

As BFS organizations increasingly look for ways to support and grow their businesses with an impact-driven mindset, GBS organizations should be at the forefront of defining and internalizing ESG goals.

The new environment has opened up many avenues for GBS organizations to maximize the value they can deliver and become ESG enablers for their enterprises. For a deep dive into the opportunities summarized below, please read our newly released research.

See how GBS organizations can promote ESG initiatives within the enterprise in the image below.

GBS organizations can enable the following key opportunities for BFS firms:

Enhance sustainable investing practices – Support enterprise banks by running/enhancing sustainable investment initiatives, such as portfolio optimization and expansion, and positive and negative screening of these portfolios
Develop new sustainable products – Identify feasible opportunities to expand the green product portfolio for their respective enterprises following the regulatory and competitive landscape
Proactive ESG risk monitoring – Build on their roles in supporting enterprises in managing various risk types such as liquidity, credit, and operational so GBS can be leveraged as specialist ESG risk management centers by enterprises
ESG performance tracking and reporting – Set up dedicated ESG performance reporting teams at GBS centers, which, in turn, will own the management and execution of ESG performance tracking and reporting tasks
ESG compliance reporting – Track ESG-specific regulatory developments across different countries where the enterprise has an operational footprint. Accordingly, it can assess the impact of newly introduced mandates or disclosures requirements on the enterprise’s existing compliance processes
Implement ESG commitments of the enterprise – Undertake sustainability initiatives to integrate the ESG goals of the enterprise across its own operations, people, and functions. For example, a leading US investment bank committed to incorporating sustainability-focused features such as energy-efficient lighting and minimized water consumption policies in its new technology base in Poland. Similarly, a major European bank’s GBS center has been working since 2009 on a Train Green Program aimed at creating sustainability awareness among school children

Call to action for BFS GBS leaders

As GBS organizations take on more strategic roles, it becomes imperative for them to step up and become ESG enablers for their enterprises. To do this, GBS leadership must champion the development of ESG-specific capabilities and prioritize initiatives to drive enterprises’ ESG agendas, while embedding ESG and sustainability practices into their service delivery and operations.

To discuss how we can assist your enterprise with achieving your ESG goals, reach out to Sakshi Garg [email protected], Piyush Dubey [email protected], and Mohini Jindal [email protected].

Discover more about how to integrate sustainability and ESG initiatives into your organization in our upcoming webinar, Driving Larger-scale Adoption of Impact Sourcing from the Inside Out.

Landlord’s Not a Dirty Word: Why It’s Time to Embrace a Hybrid Ownership GBS Model | Blog

October 31, 2022

Deborah Kops
Managing Principal, Sourcing Change
Executive Advisor, Everest Group

I’m a bit tired of hearing the GBS glitterati bash any model that isn’t 1) end-to-end, 2) integrated, 3) fully digital, or 4) delivers every applicable scope under the sun. This correlates with what folks think is “best” or “most mature,” forgetting that a good model for an enterprise may be whatever is possible to achieve at any point in time. And given unsettling economic and geopolitical considerations, it may be time to dust off that model we derisively call “landlord.”

It’s no time for orthodoxy, folks. As an architect, I was trained to think “less is more.” We may very well be at the juncture where cajoling other parts of the business into a lighter touch or “landlord” GBS operating model is the prudent thing to do for the enterprise, the business, and for the GBS operation.

So, we are all on the same page here. I looked up GBS landlord model. The normative definition for the GBS model is the central provision of facilities management, administrative services, HR services, metrics reporting, infrastructure, and often capabilities such as cross-functional collaboration, continuous improvement, program and change management in an offshore location while the business takes the delivery risk. All of the above are components of a multi-functional or integrated GBS model—sans the ownership of people, process, and sometimes technology.

Now I am not advocating that we discard years of hard graft after having moved mountains to give legitimacy to global process owners, arguing successfully for investment in digital, creating a single source of enterprise data, and—finally—delivering end-to-end. But I ask, does an enterprise business services platform only create value when it’s soup to nuts? Is eschewing a landlord model a mark of best practice and maturity? Why can’t a business tenant reap some of the value without ceding all control?

We think hybrid when it comes to effectively combining in-house and third-party delivery. Why not extend the definition of best practices to encompass more than actual process ownership—we deliver business outcomes, and we also help other parts of the enterprise become more efficient by leveraging the delivery model.

Why should you consider embracing a hybrid ownership GBS model?

What the business may need now: If you are not sleepless about the challenges your enterprise—and by extension, your GBS—will face in 2023, you ought to be. Propping up margins through cost reduction will likely be the enterprise’s major obsession. Smart GBS leaders pivot away from a “my way or the highway” stance to give the business any relief possible and facilitate the offshoring of processes that provide near-term business benefit
Easier to implement; a quick win: Landlording as part of a hybrid GBS operating model may give new meaning to the concept of lift and shift. The tenant business will take care of restructuring, process documentation, knowledge capture, and resource design. All GBS has to do is play the role of good partner…and host
Leverages GBS infrastructure and capability: COVID sharply reduced facilities demand in service delivery locations. Why not leverage both assets– empty desks– and embedded capability—such as HR, IT, and others—to get a higher return and increase the utilization of a GBS hub?
Sets GBS up for additional scope: Think of a hybrid model as a less aggressive approach to expanding scope. Once GBS provides housing and services to a business function, the next logical step, assuming good performance—is a turnkey operation
Reduces risk: Often, in the play for scope, GBS organizations cast risk to the four winds. On paper, it’s conceptually great to extend the model to encompass the processes that underpin highly technical research and development, or critical engineering documentation, but if certain conditions are not in place, such as the right talent, controls/governance, process understanding, and business sponsorship, GBS can be looking in the face of potential failure. Unfortunately, failures have a knock-on effect, breaking trust and creating a situation where GBS scope unnecessarily contracts, setting the model back years
Absorbs cost: Transfer pricing charges—if it is part of the GBS funding protocol—are not static. Being able to spread the cost over a greater number of stakeholders gives relief, a great message in a recession
Eliminate perception of empire building: Looking around at the deconstruction of GBS models, certain trends repeat each other time after time. One of the most common is “too big, too fast.” When leadership, business conditions, or the enterprise operating model changes, GBS empires that are not hard-wired into the organization design are ripe for decimation. Who is going to argue that the GBS is too big when some of the scope comes from tenants? A hybrid owner/landlord model may be the perfect strategy to ensure GBS survivability and promote growth, and a win-win for the enterprise
Gives the business a try-before-buy: In a landlord model, the business does not have to go all-in immediately, but receives some of the benefit, giving GBS the opportunity to demonstrate the value of an ownership model. Success is a compelling advertisement

What functions are ripe to incorporate into a landlord model?

Deciding what functions suit landlording is critical to GBS success. It is not an excuse for the business to take back functions or processes as part of a power play, or because of a delivery fault. Remember, it is not a reset of the model, but rather an expansion.

Perceived as risky: If processes are perceived as too risky for a GBS to deliver, they probably are. Let the business take the risk
High technical knowledge: Not all delivery location management teams are equipped to recruit and retain the right delivery talent as part of a service level agreement. Landlording ascribes the responsibility to the tenant
Complicated processes: If the processes, including upstream and downstream, are tightly intertwined, stakeholder management attendant to a service delivery model can be a nightmare and a time sink
Overly regulated: GBS operations know their accounting, retention, and privacy requirements, but keeping up with more esoteric requirements may not be a good use of resources. Leave it to the business
Buyer not on board: Why fight a losing battle? Offer the buyer the opportunity to maintain control and reap some of the benefits of offshoring. Over time, when the value proposition is clear and sending it to GBS is a no-brainer, the conversion should be easier

Ensure you know the preconditions for success

Landlording is not a passive throw-it-over-the-fence-activity. While it is not as full-on as the ownership of process delivery, certain management mechanisms must be in place to make it work

Create and communicate business rules: Don’t play landlord if the greater value comes from traditional service delivery. Be clear with the business when the “for rent” sign is out, and when it’s not
Devise the right governance model: Ensure you have the right governance cadence and KPIs in place. Landlording is not a passive pursuit; formality and metrics are critical to success
Take time to sort SLAs: Landlording does not obviate the need for SLAs. There may be fewer of them, but as the saying goes, good fences make good neighbors. Work with your business partner to create an explicit set of agreements
Don’t forget stakeholder management: Managing a tenant can require the same level of stakeholder engagement as a service delivery model
Put model evolution on the table: Define success factors and gates in advance—just like a build-operate-transfer model, prompting the tenant to convert to a GBS ownership model when certain criteria are met

Truth be told, many GBS organizations are hiding the fact that they operate a hybrid ownership model because it’s not seen as evolved, mature, or leading. Leaders, it’s time to stop being sheepish, put your heads above the parapet and proudly proclaim: landlording is valid! We run a hybrid GBS operating model that creates enterprise value.

If you are interested in joining our collaborative virtual roundtable, GBS Leadership Exchange: The Most Effective Strategies to Address the Future of Work, reach out to request to join.

Metaverse Trends that Can Redefine the Hybrid Work Model | Blog

September 13, 2022

The metaverse offers promise to reinvent hybrid models by balancing remote work with social connections formed between avatar versions of employees in a virtual world. This emerging model holds the potential to enhance team collaboration, accelerate learning, and spark creativity. Learn the latest metaverse trends to watch in this blog.

Hybrid work environments – the answer to many of the issues of remote working experienced during the pandemic – have increasingly been adopted by global enterprises in all industries to offer work flexibility along with in-person collaboration employees desire.

Now the metaverse can take hybrid work into its next evolution – bringing together the advantages of the work-from-home environment with the social connections, teamwork, and fun of the virtual world.

In this exciting next phase, employees will work in a persistent immersive mega virtual smart space akin to a universe where people have seamless digital experiences that can extend to the real world.

Employees with 3D avatars of themselves will inhabit virtual office spaces to meet and collaborate with their teams remotely without feeling distant. Many metaverse solutions for the workplace, like Microsoft Mesh, NextMeet, and Meta’s Horizon Workrooms are already gaining popularity for work meetings.

Metaverse advantages in a hybrid work model

When operating in the metaverse, organizations reap all the benefits of remote work, including reduced operational costs for real estate and facility maintenance. Here are some of the other key benefits:

Enhanced learning and development – Through virtual learning, the metaverse can enable better collaboration, enhance learning outcomes, and improve employee training
Improved attrition and talent – The metaverse can reverse the rising attrition rates many companies experience when returning to in-office work by employees who leave because they prefer remote work. With metaverse, companies can differentiate their employee value proposition around collaboration and relaxation activities, resulting in better retention.

Organizations can deploy metaverse applications throughout the employee lifecycle, including attracting talent by distinguishing themselves, developing skills through virtual training, and engaging employees so they stay with the company

Better collaboration across geographies – As metaverse adoption increases, organizations will be able to further distribute employees geographically. Tasks like design work, planning, and strategizing that require teamwork and are difficult to perform in regular virtual modes can be done more effectively with creative virtual tools within the metaverse. This will enable increased talent sourcing for strategic roles from tier-2 and tier-3 cities as the metaverse diminishes the barriers to effective collaboration across geographies
Greater work-life boundaries – Metaverse can overcome remote workers’ top concerns of feeling isolated, having limited social interactions with coworkers, and lacking boundaries between work and personal time.

A fully immersive metaverse environment functions exactly like an office space where employees can have the impromptu interactions needed to build a shared organizational culture. When working in the metaverse, employees work in different environments than their homes, providing a barrier between jobs and leisure

Challenges to the metaverse in hybrid work

The metaverse will have some challenges to overcome and these include:

Higher initial investment – Operating within the metaverse requires a high initial investment for developing metaverse platforms and procuring hardware. The low maturity of technology and hardware required is an obstacle to large-scale commercial adoption
Employee stress – Working in the metaverse for long hours is strenuous for employees who can feel fatigued and lose their sense of reality. Another employee concern is digital privacy and security
Graphic limitations – The metaverse technology available today only supports cartoonish avatars that do not look realistic or show human emotions, significantly limiting the effective expression of thoughts and non-verbal cues

Metaverse outlook

Most organizations are following a wait-and-watch approach when formulating internal and external metaverse strategies as most metaverse solutions offered today are in their initial development stages.

Widespread metaverse platform adoption is likely to take a few years because the infrastructure, applications, and computing power requirements for a very immersive metaverse experience are not yet available on a deployable scale. However, the metaverse offers an enticing value proposition that should be closely watched.

To discuss metaverse trends and their impact on the hybrid work model, contact [email protected], [email protected], and [email protected].

You can also view our LinkedIn Live event, Trust and Safety (T&S) in the Metaverse | With Great Power Comes Great Responsibility.

The Top GBS Employers™ in India, The Philippines, and Poland – Discover Why They Are the Top Global Business Services Companies for Talent | Blog

August 30, 2022

Everest Group’s Top GBS Employers™ across India, Poland, and the Philippines report illustrates the top global business services companies selected for best work environment and job satisfaction rating by employees. Read on to discover what the workforce looks for when choosing an employer and view the complete list.

See the Report

As the battle to find the right talent and skillsets resumes, GBS employers must build an exemplary brand to stand out among their peers to attract and retain top talent. The talent shortage worldwide is here for the foreseeable future and is a constraint against growth goals. Developing and implementing a talent strategy should be at the top of any employer’s priority list. One tactic that many are turning to is closely tracking and honing their brand, or how talent perceives them in their local market.

Developing a solid brand perception will not only address the talent shortage challenge but also help draw in a strong and resilient workforce, so organizations will survive uncertainty and thrive in intensely competitive environments. The top global business services companies are incorporating the key components and top requirements that talent are gravitating towards – work environment, compensation, career development, and diversity – and are critical in building employer brand perceptions and meeting evolving workforce expectations.

The top global business services companies selected across India, The Philippines, and Poland

Everest Group analyzed the employer brand perceptions of 200+ leading GBS organizations across India, Poland, and the Philippines to discover what a top employer brand perception encompasses, view the full report. The study examined multiple dimensions, including compensation, career progression, senior management, work-life balance, culture and values, and diversity.

This first-of-its-kind study also analyzes the performance of each of the top global business services companies in the local talent markets based on attrition rates, joiner-exit ratio, and overall employee satisfaction ratings.

Finally, we assessed what top global business services companies are doing to differentiate themselves in talent markets, targeting the most desired themes from talent: work environment, compensation, career development, and diversity.

Why GBS organizations need this information today

Workforce expectations have transformed dramatically over the past few years, and organizations have to evolve their employer brands to meet those expectations. The pandemic brought about the work-from-home (WFH) era, dispelling many negative notions around WFH, and set a standard of work-life balance, flexibility, and autonomy that employers must deliver. Our research shows that over half of today’s organizations expect over 40% of their employees to continue working from home or in a hybrid style over the next two years or so.

More and more employees today are also choosing to work for companies that not only have sustainability goals and strong culture and values but adhere to diversity, equity, inclusion, and belonging (DEIB) practices, which ensures employees have equal opportunities and ultimately feel more valued.

And at the top of the list, employees want to work for organizations that offer career paths, opportunities for upskilling, and fair compensation.

The Top GBS Employers™ rankings provide an outside-in proxy on how prospective candidates pursuing tech and ops careers perceive employer companies – helping firms baseline their employee value propositions (EVP) effectiveness vs. their immediate peers.

How are the top global business services companies being ranked?

Recent employer perception studies have been too broad, with no specific view capturing tech talent’s concerns. This analysis is based on publicly available information, including Glassdoor, Indeed, and LinkedIn, and the latest feedback capturing prospective employees’ perceptions about top GBS organizations. The rankings from the report provide a comparative snapshot of leading firms’ market perceptions among the tech and ops workforce. We ranked each GBS employer on employee satisfaction grade, compensation and benefits, work environment, career opportunities, and diversity and inclusion focus and investment.

The top ten across India, the Philippines, and Poland

By assessing the ratings and feedback from popular public sites and critical sources for employees conducting employer research, we narrowed down the top ten in India, the Philippines, and Poland:

Across India, the overall top GBS employers are Google, Mondelez, Microsoft, Bank of America, SAP, JPMC, P&G, Target, American Express, and Novartis
In the Philippines, the overall top GBS employers are Henkel, SAP, JPMC, Telstra, P&G, SunLife, Wells Fargo, American Express, Chevron, and 3M
And in Poland, we saw Mondelez, Microsoft, SAP, Standard Chartered, Google, Cisco, Bayer, AstraZeneca, ING Group, and P&G come through as the top GBS employers

See the full report for a complete view into the rankings in the different regions.

Key takeaways from the research

Throughout every market assessed, it’s clear that compensation, work environment, and career development are among the top sought-after aspects when choosing a new employer and have the most impact on employer brand perception.

Employers with the highest rankings offer relatively high entry-level compensations and robust training, set benchmarks to allow for pay increases, perform salary corrections, and have opportunities for fast-track promotions, especially at lower experience levels. High-ranking companies also offer flexibility and options for remote work and the chance to work across teams for cross-functional exposure. Other perks among the highest ranked employers are opportunities to work on the latest tech stacks and develop techno-functional and behavioral skills, along with good 401K matching and health insurance options, market-competitive benefits, and decent paid time off.

Employers that incorporate these practices will significantly increase their overall employer brand perception and discover more success in finding and retaining talent.

Top global business services companies can also leverage Everest Group’s Talent Performance Framework to optimize their talent management strategies and build future-proof talent models.

Exhibit one: Everest Group’s Talent Performance Framework

To learn more about Everest Group’s Top GBS Employers or to discuss the Talent Performance Framework, reach out to [email protected] or Contact us.

Also, join us for our Conversations with Leaders LinkedIn Live series, a part of Everest Group’s GBS Leadership Exchange, Episode 3 | Who Are the Top GBS Employers?, featuring GBS executives who have shown significant leadership and innovation in GBS. In this session, Rohitashwa Aggarwal, VP of GBS Research and Advisory at Everest Group, and Shweta Mohanty, VP and Head of HR for SAP, India, will discuss the Top GBS Employers, and what they are doing to set themselves apart.

Six Highlights from the 2022 NASSCOM GCC Conclave to Watch | Blog

July 8, 2022

India’s continued position as a leading destination for Global Capacity Centers (GCCs) was among the key themes emerging from the first hybrid National Association of Software and Service Companies (NASSCOM) GCC Conclave on June 29-30 in Hyderabad. To learn the top priorities among GCC leaders, read on for takeaways from our experts who attended the mega event.

While we had doubts over GCC participation in the first-ever hybrid conclave since 2019, the event was a huge success for GCC leaders who enjoyed making and renewing contacts, exchanging learnings and best practices, and sharing fond memories of past gatherings.

As the strategic partner for NASSCOM, Everest Group is pleased to share these six key takeaways from the GCC Conclave, themed Leaning in for Impact in the Networked World:

Continued endorsement of India as a leading GCC location

India remains at the center of the offshore/nearshore global delivery portfolio across most enterprises. Most GCC leaders expect higher growth from the India centers than other locations. Some have plans to double their India headcount in the next two to four years.

Return to office (location) is a top priority for GCC leaders

Two out of three GCC leaders highlighted their efforts to bring employees back to work locations as part of the hybrid model. With location flexibility emerging as a strong value proposition for employees, balancing employee preferences and organization goals (e.g., building workplace culture) is becoming critical.

Increased endorsement for the GCC model has positively impacted GCCs’ influence across the enterprise; however only in pockets

GCC influence across the organization has increased post-pandemic but only in pockets. Building strong adjacencies with core enterprise priorities goes beyond scaling high-skill capabilities in the GCC. Many GCC leaders still have concerns about managing cost competitiveness with third-party providers, securing buy-in for expanding capabilities, etc. To top this, several enterprises are restructuring, which is also impacting GCC growth.

The next wave of growth is likely to be anchored around centralization (again)

The “scale-optimize-centralize” cycle is not new for GCCs. Across different stages of evolution, GCCs have experienced this cycle and have also come out successfully post internal restructuring initiatives (e.g., banks centralizing third-party risk compliance that supports different businesses).

Over the last two years, many GCCs expanded the breadth and depth of services offered (with insourcing also being a factor). Many leaders are now looking at the next wave of centralizing capabilities. However, this centralization wave will likely be more borderless because the remote model has helped address location dependency constraints. In that context, the role of India-based GCCs as an “orchestrator of services” (see next point) across the global delivery network will likely increase. Click here to check out Everest Group’s thought leadership content around the borderless GCC/GBS model.

Mature GCCs are betting big on services orchestration

As GCCs expand ownership, a wide array of responsibilities exist. Mature GCCs are already orchestrating services – coordinating with in-house teams, third-party vendors, start-ups, etc. – and are owning end-to-end accountability for services in scope. See the exhibit below for an example of GCC ownership, from skills to processes to platforms, with distinct needs from talent and operating model perspectives.

Exhibit 1: The spectrum of GCC ownership (tech example)

The GCC journey is akin to a Snakes and Ladders game!

Factors such as increased sponsorship and niche talent availability can help accelerate the journey towards being recognized as an entity delivering competitive advantage for the global enterprise. At the same time, conditions like macroeconomic impacts (e.g., the Ukraine war) and spinning off divisions at the enterprise level could deter GCC’s progress.

Several leaders enthusiastically played the GBS 2022 Snake and Ladders game, developed by Deborah Kops and Everest Group team, at the 2022 NASSCOM GCC Conclave. The game highlights the perils and opportunities for GBS organizations as they strive to become entities delivering competitive advantage for global enterprises. Learn more about this game in our upcoming LinkedIn Live event. As one GCC leader noted, “Yes, there are several ups and downs. The key is to keep rolling the dice!” And the same can be said about the GCC journey.

Discover more about Everest Group’s research on the GCC evolution.

4Cs to Successfully Attain Business Agility in GBS Organizations | Blog

April 26, 2022

Business agility has emerged among leading Global Business Services trends as a key driver for growth, innovation, and business excellence. Attaining business agility requires new ways of thinking and working. To learn more about the 4Cs (commitment, collaboration, competence, and construct) that can help GBS organizations rapidly respond to market changes and emerging opportunities, read on.

Looking at the latest Global Business Services trends, business agility is a key lever driving cost optimization, improved operational efficiency, accelerated digital transformation, higher revenue impact, improved customer experience, and other positive business impacts. Mature GBS organizations are increasingly reaping the benefits of agility, often reacting, and adapting to changes and challenging situations faster than ever before.

But business agility doesn’t prioritize speed over quality. Being agile doesn’t deteriorate quality, limit documentation, or micromanage. Business agility is an organization’s ability to rapidly adapt to the market and environmental changes productively and efficiently. Organizations who think lean and embrace agility or possess a Lean-Agile mindset are proving they can overcome challenges and seize emerging opportunities quicker than their competitors.

4Cs to successfully attain business agility in GBS organizations

Through our research with mature GBS organizations, Everest Group has identified 4Cs to attain business agility success as shown below:

Exhibit 1: Everest Group

GBS organizations need to possess the following characteristics to reach business agility:

Commitment
- Change the mindset and increase risk tolerance (over 50% of companies believe resistance to change impedes their progress towards achieving complete agility)
- Evolve the organizational culture to scale the agile model
Competence
- Focus on talent management by taking an empathy-based approach to leadership and hiring team players
- Invest in roles for the future and nurture specialist talent
Collaboration
- Leverage internal social tools to drive transparent collaboration across the organization
Construct
Ensure autonomy and evolve the operating model to avoid getting stuck in existing models and being unable to innovate and realize the true potential of agility
Establish open communication channels and/or build a bottom-up communication channel

A shift to agile work

With enterprise expectations evolving and GBS organizations becoming strategic business partners driving higher value and impact, adopting agile work methods has become an urgent need.

Traditional work ways have visibly shifted to an agile mindset. Let’s look at how the 4Cs translate to the new agile approaches as illustrated below:

Exhibit 2: Everest Group

Business agility – the path forward for GBS centers

With enterprises viewing GBS as the hubs for innovation, digital transformation, and change, integrating agile working methods will help GBS centers deliver value-based outcomes productively and efficiently. This also will enable different GBS centers to operate as a cohesive network, benefiting from each other’s best practices. In today’s rapidly changing times, business agility is the path forward for GBS organizations.

To learn about how GBS centers are implementing agility across their operations, read our report 4Cs of Success to Attain Business Agility in GBS Organizations. Please reach out to Aditi Bansal ([email protected]) and/or Meghna Thomas ([email protected]) to share your experiences or discuss Global Business Services trends.

To find out if your GBS is organization evolving to create superior value, take our GBS Evolution Personas Framework assessment.

Will Ukraine’s Invasion Have a Domino Effect on Other Geopolitical Equations? | Blog

March 31, 2022

The Russian military action in Ukraine has already significantly impacted thousands of services jobs in this region, but the potential reverberations to nearshore European countries and the larger global services industry could be far more damaging – making it essential to integrate geopolitical risk management in your decision-making now. Learn the immediate steps to protect against risks during these increasingly unpredictable times as we continue our expert analysis on this critical issue.

In our recent blog, we wrote about service delivery risk in Ukraine. Since Russian forces invaded Ukraine on Feb. 24, almost 150 companies operating out of the region supporting IT, Engineering, and Business Process services have ceased or at least suspended operations in the region, impacting thousands of jobs.

But the crisis is not limited to Ukraine, Russia, or even Belarus. Several Eastern European countries such as Poland, Hungary, Slovakia, and Romania are directly impacted. These neighboring countries are taking in refugees, providing financial aid, declaring states of emergency, preparing for military confrontation, and most importantly, witnessing a significant drop in employee morale as individuals and families experience anxiety over the recent events.

These nearshore European countries – Poland, Hungary, Romania, Slovakia, Czech Republic, Latvia, Lithuania, and Estonia – collectively host nearly ~1.5 million Full-time Equivalents (FTEs) in global services delivery, accounting for 15-18% of the total global services workforce worldwide.

We are advising our clients that significantly rely on Central Eastern Europe to stress test their Business Continuity Planning (BCP) strategies at the same time hoping that the ongoing conflict doesn’t escalate to the neighboring countries.

But while we hope for the best, we must prepare for the worst. One of the lessons from this crisis is to not assume that diplomats have everything under control. The events of the past few weeks are extremely disturbing and could embolden authoritarian leaders in some of the other countries.

Below is our analysis of some of the hostile geopolitical equations globally that could impact the global services industry in the event of a major escalation in the associated countries:

	Risk scenario	Likelihood	Locations impacted	Global services Impact (number of centers and FTEs)	Key players with large footprint
1.	Russia versus NATO	High	Poland, Hungary, Romania, Slovakia, Czech Republic, Latvia, Lithuania, and Estonia	~1,000 centers 1.5 million FTEs	Amazon, Coca-Cola, Deloitte, Dell, Microsoft, E&Y, Nokia, Huawei, IBM, HCL, Cognizant, Accenture
2.	China versus Taiwan Or direct US versus China	Medium-High	Taiwan (directly) China (if US imposes sanctions on China)	~400 centers 320,000 FTEs	Barclays, Citigroup, ExxonMobil, HSBC, Microsoft, Accenture, Capgemini, Tech Mahindra
3.	Gulf tensions – Iran versus US and Israel	Medium	Mainly Iran. Could impact Kuwait, Iraq, and Lebanon in case of escalations in the region	~100 centers	Alibaba, Apple, AT&T, General Motors, Volkswagen, LG Electronics, Accenture, Genpact, IBM, HCL
4.	India versus Pakistan	Medium-low	Locations in Northern and Western parts of India (including capital city); Northwestern region of Pakistan	~2,000 centers 3.1 million FTEs	Amazon, Bank of America, Citigroup, Ford Motors, Dell, Nestle, Microsoft, Accenture, TCS, Wipro, IBM
5.	India versus China	Medium-low	Locations in Northern parts of India; major global services hubs in China are too far out from border regions	~2,500 centers 3.3 million FTEs	Citigroup, ExxonMobil, HSBC, Ford Motors, Nestle, Microsoft, TCS, Wipro, IBM, Capgemini, Tech Mahindra

Risk management actions to take

While we can only hope that none of the above-mentioned scenarios take place, organizations need to be well-prepared to manage the risk impacts. Everest Group advises the following:

Move geopolitical risk management up your enterprise agenda
- New risks require newer risk management systems. While most global companies invoke reactive measures to the changing risk environment, they lack integrated capabilities for managing the cross-enterprise impact of geopolitical risk. Integrate geopolitical risk management into a systematic process and move risk functions beyond the formal views of governance/administration to influence your firm’s core strategy
- Deploy refreshed risk management mechanisms and take a portfolio view of risks to better understand the implications and interdependencies
- Empower risk management teams with access to geopolitical intelligence relevant for not just short-term, but long-term challenges and opportunities. Ensure that updated assessments and implications of geopolitical risks regularly feed into the decision-making machinery across the firm
Anticipate business-risk implications
- Examine and understand potential business consequences of geopolitical risks. More often than not, geopolitical movements lead to regulatory changes (e.g., sanctions), thereby impacting corporate risk exposure, with implications for tax rates, cross-border trade, and exchange-transfer risk
- Scan the horizon for changing sanctions and resultant changes to your third-party ecosystem
Rehearse and stress-test the readiness of contingency plans regularly
- Consistently run tests of work from home and other BCP models to ensure familiarity and effectiveness (in terms of devices, connectivity, collaboration, and project management tools)
Strengthen digital security and ensure tech readiness
- Cyber risks are increasingly associated with political origins, including war and terrorism. Keep a hawk-eye on potential threats related to cybersecurity and invest in strengthening network infrastructures and stronger encryption algorithms to insulate against potential cyberattacks
- Be aware that historical evidence suggests that cyberattacks are not restricted to just the conflicted zones and often spill over, causing collateral damage in neighboring countries and also putting them at risk
Maximize delivery portfolio resiliency
- Diversification is becoming mission-critical. Instead of operating large hubs in one or two locations, look to dip toes in multiple talent pools across locations (while simultaneously assessing fragmentation risks)
- Reassess your Global Business Services (GBS)/shared services and vendor portfolio to ensure enough overlap and redundancy across both operational and management processes
- Invest in process simplification and re-design to reduce hand-offs, decision-points, and dependence on people
Increase BCP-led talent management
- Cross-skill/cross-train the workforce across centers in critical processes to enhance BCP and resilience, and manage workloads in case of a country/center work stoppage scenario
- Maintain select forms of dispersed/distributed workforce (not co-located with delivery centers). Examples include remote working models or “pods,” contingent and gig workforces

The nature of geopolitical risk is changing and becoming increasingly unpredictable. It is now imperative for organizations to integrate geopolitical risk management in decision-making processes across the organization.

If you have questions or would like to discuss this topic, please feel free to reach out to us at [email protected], [email protected], or [email protected].

As we continue to watch the events in Ukraine, you can access our resource center where you’ll find our consolidated coverage of this evolving situation, or watch our LinkedIn Live event, “How to Manage the Ukraine-Russia Impact on Service Delivery.“

Five Actions GBS Organizations Must Take to Address the Global Business Services Trends and Challenges of 2022 | Blog

March 23, 2022

2021 was a milestone year for Global Business Services (GBS) with most enterprises reporting the model exceeded expectations for global business services solutions and delivery. GBS provided the needed strength and agility to seamlessly supply value without disruption from the pandemic. GBS organizations also saw higher Net Promoter Scores (NPS), a metric showing customer satisfaction and loyalty, with an increase of 10-25% in 2020 and 2021, and established higher stakeholder engagement and service delivery expansion.

With this steady stride set in motion, GBS organizations are now looking to approach 2022 with a renewed focus on increasing the value of delivering global business service solutions. They are striving to boost proficiency, digitalization, and customer-centricity while taking steps to adapt to current challenges like inflation, a talent deficit, higher costs, and the ripples set in motion from the pandemic.

So, what should GBS organizations focus on now to establish and meet expectations for 2022 and beyond?

Challenges Abound – A Global Talent Shortage Compounded by Rising Costs

Based on our report, It’s Not a Talent War; It’s a New Reality – 2022 Key Issues in Global Sourcing, GBS headcount growth is expected to be steady, with average growth moving from 4-5% in 2020 to 8-10% in 2021. However, with the current global talent shortage and inflation rates reaching as high as about 15% for some roles in 2021, expectations for salary will increase by about 8.1% in 2022.

The talent shortage will not be a brief bump in the road and will require short- and long-term strategies. We’re seeing declining population pyramids across North America and Europe, which means fewer new working-age people in the coming years. Specifically, 2.4 million fewer new workers are coming into the market than in the past five to ten years. India will bring 1.8 million more people into the workforce in the next few years but is showing an impending decline about ten years out.

Top Priorities for GBS Leaders in 2022

GBS leaders should act swiftly in 2022 to make addressing these challenges a priority. Our Key Issues study reports that GBS organizations plan to make cost improvement their number one priority. With the current talent shortage, GBS organizations must also focus on shaping the workforce they have today, including better integrating a future hybrid working model and reskilling and upskilling their workforce to meet evolving needs, among other strategies. Finally, even though GBS organizations thrived during the pandemic, many are getting back on the innovation and growth path and picking up projects that were sidelined during 2020.

Five Actions GBS Leaders Should Take to Address 2022’s Challenges

As GBS leaders rethink cost and talent strategies in 2022, what actions should they consider today and in the coming months to continue delivering value?

Action #1 – Advance Efforts to Shift to Hybrid – If You Fail to Plan, You Should Plan to Fail

In 2022, GBS leaders will look at adjusting their leadership, governance, operating, and talent models to ensure career growth and preserve productivity.

As workers moved to a work from home (WFH) model during the pandemic, most were surprised to discover how well employees and organizations adapted. The GBS industry learned ways to manage remote teams very quickly, and many workers today prefer to continue working from home. The hybrid model is emerging as the preferred working model to reach a balance and retain the benefits of working from home and the office. Our research shows that 70% of teams are likely to operate in hybrid models moving forward. However, many have reservations about maintaining performance benchmarks and ensuring data security, among other concerns. But with the pressure to meet the needs of their employees, many are bending to incorporate the hybrid model to avoid risking losing talent to other more flexible organizations.

Action #2 – Reset Expectations on Cost Arbitrage from the GBS Model

We saw wages increase significantly in 2021, many by 10% and more. This increase is more apparent for IT and engineering skills; however, we’re seeing increases across various roles and skills, including finance, supervisory, managerial, senior executives, business operations, and others. We expect an average wage increase of 8.1% in 2022.

GBS leaders will need to rethink how best to control operating costs. This could be done by assessing the scale of real estate needed or managing talent to retain value without overspending. Leaders will also need to reset expectations in light of the current changes and challenges and focus more on business impact than historical expectations.

Action #3 – Pivot GBS to Support the CEO Agenda Through Innovation, Transformation, and Operation Resilience

GBS organizations will want to pivot this year to focus on supporting the CEO agenda. With the current challenges top of mind, CEOs are looking for innovation transformation and operational resilience. Mature GBS organizations that aim to deliver an increased services evolution beyond arbitrage can deliver twice as much total business impact, whether through enhanced end-customer experience, accelerated digital transformation, increased productivity, or other methods. To do this, we’re seeing many GBS organizations develop multiple types of Centers of Excellence (CoEs), either within or outside of the GBS, to alleviate cost pressure, an absence of existing capabilities or innovation, or an urgent need for business model or digital transformation. The CoEs might target core operations, IT, talent, automation, or sourcing and vendor management, to name a few, and focus on optimizing and innovating various aspects of people, processes, and technology.

Action #4 – Execute Battle Plans to Navigate the Talent Wars – Understand the Talent Shortage Poses Serious Risks to GBS Model Success

A multi-pronged strategy with various tactics is needed to address short- and long-term talent challenges. These approaches could range from making the best of existing talent through engagement, reskilling/upskilling, and evolving the delivery model to rethink talent acquisition altogether. For example, GBS leaders could consider ways to stand out during college recruiting, find new methods to retain talent, or even look into different locations through options like impact sourcing. Finally, many are considering if now is the time to partner with universities to improve education and training programs and develop more project-ready talent.

Action #5 – Obsess Over Employee Experience

For our final action, GBS organizations should consider how to drive GBS employee experience at the enterprise level. It’s no surprise that enhanced employee experience results in improved productivity, efficiency, and innovation, better retention rates, and, ultimately, increased customer satisfaction. If GBS employees have thriving employee experiences, they will better serve the enterprise functions, business units, and internal and external stakeholders. Further, GBS organizations that focus on improving the employee experience and offer hire-to-retire services will maximize their capabilities and help deliver a better overall customer experience.

To learn more, watch the webinar, “5 Success-driving Actions GBS Organizations Need in 2022,” for expert insights from our analysts and the complete, in-depth breakdown of these five strategy actions. You will also hear from leaders from Cargill and Novartis on their employee value proposition and plans for future working models.

How Banking GBS Organizations Have Evolved to Drive Enterprise Data Transformation | Blog

February 21, 2022

With their growing maturity, Global Business Services (GBS) organizations in Banking and Financial Services (BFS) have taken on critical roles in the data value chain. To learn how banking GBS organizations have evolved to become best-in-class partners supporting enterprise data transformation and the key attributes they now possess, read on.

Data is a powerful force. Our recent study on data and analytics maturity in GBS revealed that best-in-class GBS organizations that leverage data deliver more than one and a half times the strategic impact in such key areas as improved employee and customer satisfaction, revenue growth, and reduced fraud risk compared to their peers.

Unlocking greater value from existing data is critical in driving transformation for BFS enterprises who are looking to make data available for use at scale, apply Artificial Intelligence and Machine Learning (AI/ML) to business cases, use big data to monitor and improve customer journeys and retention scores, detect and mitigate fraud and risks in real-time, and improve Return on Investment (ROI) according to our studies.

What’s the role of GBS organizations in the data lifecycle?

Until a few years ago, most banking GBS organizations played discrete roles across the data value chain. But this has vastly changed. Today, more banking GBS organizations are well-entrenched across the data value chain and have the skills and leadership required to drive the data transformation journey for BFS enterprises, as the illustration below demonstrates.

Skills Data-centric Teams Seek in Banking GBS Organizations

What key factors have contributed to this trend?

Here are some of the reasons we see for this growth:

Post-pandemic demand: Explosive growth in digital transactions has resulted in a vast trove of data that can be analyzed to better understand customer needs
Critical role of data: Data now underpins the success of the subsequent transformation phase for many enterprises that envision bringing together the other critical components of digital transformation such as cloud, AI/ML, front-to-back execution, self-service, resiliency, and mitigating cyber threats
Greater GBS maturity: Global enterprises recognize the leadership potential in GBS centers needed to drive enterprise transformation now exists. This is further accentuated by GBS’ ability to adapt to new agile ways of working and, in the process, demonstrate an appreciation of customer-centricity via cutting-edge product and platform development work. All of this is critical in driving the broader enterprise-level vision

What maturity attributes do GBS organizations exhibit in supporting enterprises’ data transformation initiatives?

As GBS juggle varied responsibilities, many demonstrate attributes of an ideal strategic partner, including:

Owning end-to-end functions: Many GBS organizations now own complete data transformation responsibilities. For example, a leading US bank GBS hosts a Finance and Accounts (F&A) Data Management team that supports finance business users’ data needs. This team is involved in various activities across data management, data sourcing and provisioning, data governance, data lineage, production data validation, and metadata management. Similarly, other examples exist where the GBS leads the enterprise data capabilities and delivery function across multiple corporate functions, such as legal
Driving the future data organization through external collaboration: Many leading GBS organizations are ramping up teams of data specialists and collaborating with the external innovation ecosystem. They are working together to design, administer, and govern data-first setups comprising common data tools, techniques, processes, and data assets explicitly aimed at making data available for use at scale (e.g., accelerate self-service), apply AI/ML to business use cases (e.g., enterprise-wide bots to access knowledge residing across business divisions), and scale-up automation (e.g., 100 percent straight-through processing across front-to-back and reduce risk). For instance, a GBS of a leading US investment bank hosts a Data R&D team in India that collaborates with renowned academic institutions towards developing a scalable, computational system that can extract knowledge from millions of source documents and efficiently structure and represent them for business insights
Applying an engineering mindset to business challenges: As technology solution partners for enterprises, banking GBS organizations are solving business-critical problems by applying an engineering lens to them. For example, a leading European bank applies engineering and data sciences principles (e.g., data discovery) to prepare solution and technical designs from the GBS to meet regulatory commitments around data leakage prevention
Leveraging internal innovation to provide ‘in-demand’ data skills: In meeting critical challenges like the ongoing talent scramble, GBS organizations are picking up cues from global best practices and implementing them. In one case, a leading insurer moved its actuaries into broader data science positions and upskilled them with predictive analytics capabilities to fill the shortage of internal data scientists needed to extract usable customer insights from its newly formed data lake
Solving business challenges and providing critical insights: GBS organizations play an innovative role in delivering impactful data-led solutions that help enterprises solve many business challenges like the following:
- Opportunity sizing and providing customer insights such as revenue and profitability analysis, user journey analytics, and customer service workload predictions
- Designing and creating business-critical dashboards to review business performance
- Assessing campaign impacts such as leveraging predictive analytics-based models to calculate ROI for planned marketing campaigns
- Improving process efficacy by reviewing and streamlining process

Moving forward, GBS organizations need to bring together their leadership and prowess in technology, domain and organizational context, customer-centric approaches, and change management to become true strategic partners in data transformation journeys. Their continued ability to evolve is the quintessential juggernaut that will drive successful data transformation for enterprises.

To share your thoughts on the role of GBS in enterprise data transformation, reach out to [email protected].

You can also learn about how GBS organizations are developing and preparing for 2022 and beyond in our webinar, 5 Success-driving Actions GBS Organizations Need in 2022.

Announcing our inaugural conference: Everest Group Engage, The Pragmatic Edge: Designing Your Future. Learn more.

Category: Shared Services/Global Business Services Centers