Shared Services/Global Business Services Centers Archives - Page 5 Of 11

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.

Building Global Centers of Excellence (CoEs) in GBS Organizations to Drive the CEO Agenda

January 3, 2022

The Global Business Services (GBS) market has witnessed improvement in performance, enhancements in role, and growth across verticals and functions over the years. In fact, the pandemic served as a catalyst for GBS organizations to step up and deliver higher value-add services, becoming a pillar for enterprises to evolve at a much faster rate. However, as the world evolves, GBS organizations need to remain agile to keep up with advancing technologies, navigate the recent talent shortage, and maintain cost competitiveness and accelerate innovation to help drive the CEO agenda.

To achieve these multiple priorities, many GBS organizations are building Centers of Excellence (CoEs), which further facilitate collaboration and speed-up transformation and delivery for the enterprise. CoEs are entities that work across business (BU)s units, or product lines within a BU, and provide leading-edge knowledge and capabilities in targeted areas. CoEs have proven instrumental for GBS organizations to drive initiatives and deliver access to high-demand skills and competencies, accelerating improvements and pushing efforts forward for faster execution.

The five types of CoEs that drive the CEO agenda

The role of the GBS organization needs to pivot toward creating strategic impact for the CEO. CoEs and competency centers within GBS organizations are designed to streamline and set actionable steps for the CEO’s agenda and critical priorities. The following five types of CoEs help enterprises to drive stronger business performance.

Core operations and corporate services CoE: This CoE focuses on developing expertise for multiple departments within the enterprise, including reporting, finance, marketing, customer onboarding, and core operations

Next-generation IT and digital technologies CoE: This CoE targets the development and management of new skills and technologies, such as AI, analytics, cybersecurity, blockchain, and testing

Talent CoE: The talent CoE develops the strategic services, capabilities, and best practices for staffing, e-learning, and employee onboarding

Automation and/or innovation CoE: Today’s strategic CEOs are looking to quickly advance their organizations’ automation and innovation maturity. This CoE is dedicated to cultivating these initiatives within the enterprise and deploying and scaling technologies like robotic process automation (RPA) and intelligent automation (IA)

Global sourcing and vendor management CoE: The goals of global sourcing and vendor management within organizations are often changing to keep up with market trends. This CoE provides CEOs with needed processes, insight, and agility to manage their sourcing and vendor models as market trends fluctuate

Going into 2022, these five types of CoEs, built within GBS organizations, can advance and strengthen enterprises and push strategies toward next-generation digital technologies, automation, and innovation. We covered this in more detail in our webinar, 5 Success-driving Actions GBS Organizations Need in 2022.

Watch On-demand

Why GBS organizations are the right candidates for building CoEs

Multiple factors play into why GBS organizations are good candidates for building CoEs and ultimately offer significant benefits to enterprises and the CEO agenda. These include:

Deep process, domain, and technology expertise, providing a superior overall experience for the enterprise
Access to next-generation and niche skills at competitive costs, which accelerate enterprises’ digital transformations
Through a microcosm effect, offering high cross-functional and regional impact, the GBS-built CoE improves new product and services development
The ability to drive fast-paced, low-cost innovation enables top-line growth throughout the enterprise
Alignment with organizational culture and business goals improve overall productivity

How to develop an effective CoE

The various aspects of developing an effective CoE should be charted out to accelerate enterprise-wide adoption. Setting up a CoE is the first step for a GBS to embark on excellence, but it needs to ensure that it takes the right actions to establish success.

The first step is to map out a vision and strategy, think through possible risks, and mitigate them
Defining a governance and engagement model between the CoE and the enterprise is paramount to ensure that those goals and strategies are communicated, carried out, and met
GBS organizations will also need to design a talent model structured around growth and establish funding and financing mechanisms to initiate the process. Once the team is structured and goals are set, GBS organizations should incorporate a way to measure success through performance metrics and KPIs to collect the best data on impact delivered

Best practices for setting up a CoE

CoEs are designed to bring expertise and forward-thinking guidance, which often means taking risks and adapting; however, here are a few best practices to keep in mind when setting up CoEs:

Clearly articulate the “why”: If there is not enough clarity, the CoE is unlikely to deliver results aligned with the enterprises’ strategy

Take an entity-wide view: Combine the business case with an internal assessment of the company’s vision and strategy, requirements, and capabilities to identify concrete opportunity cases

Clearly define the governance and organizational model: The CoE should articulate the governance mechanism, reporting model, roles and responsibilities, and business units supported, so all parties are aware

Talent is the most critical success enabler: Leadership and team skills are often the most critical factor for a CoE’s success. Consider collaborating with external partners such as startups and academic institutions to fill gaps

Aim for quick wins in the initial stages to gain visibility and confidence: Select early use cases that allow the enterprise to develop confidence in the CoE

Ensure strong engagement and precise stakeholder management: Secure the right sponsorship at the right time, preferably in the early stages

For more information on how GBS CoE’s can drive the CEO agenda, watch our webinar, 5 Success-driving Actions GBS Organizations Need in 2022.

Watch the webinar on-demand

What Does the Great Resignation Mean for GCCs | Blog

December 7, 2021

As we look past 2021 and the pandemic, it has become apparent that we are entering 2022 with a completely different and equally challenging set of issues. For the past several years, the “talent war” has had a special emphasis on the demand for high-end digital talent. Today, the challenge to find talent has become widespread across industries and departments and has spiraled into rising attrition rates, higher internal salary demands from employees, and increasing billing rates across a range of job skill sets.

The Road Ahead for GCCs – 2022 and Beyond | Blog

November 18, 2021

At the forefront of innovation across products and processes, Global Capability Centers (GCCs) today are creating a competitive advantage for their global enterprises and those based in India are particularly well-positioned to accelerate to the next level. With increasing global leadership roles, these Centers are providing end-to-end support on complex work areas to deliver business impact that goes well beyond cost savings and operational improvement.

Year 2021 saw many GCCs initiate their transition to a new normal post the pandemic – one anchored on increased endorsement for the GCC model, increasing responsibilities beyond traditional workstreams, and accelerated adoption of digital technologies. However, these organizations will still face the challenges of navigating through factors such as accessing niche talent, adopting newer digital technologies, handling rising consumer expectations, increasing demand for analytics, and rapidly transforming business models driving the need to regularly recalibrate strategies.

According to Everest Group conversations with more than 100 GCCs to learn their priorities in planning for 2022 and beyond, the following five areas emerged as being critical to the success of these Centers.

Why Is There a Surge in Companies Building Global Services Centers? | Blog

August 17, 2021

The business world is changing quickly and affecting decisions as to whether a company brings work back in house that it previously outsourced to third-party service providers, outsources functions that previously were in house, or builds their own Global Business Services (GBS) centers in regions like India, the Philippines, Eastern Europe, and even in US territories such as Puerto Rico. This results in a fast-moving set of changing ecosystems. Why? And how will the increase in GBS centers affect the third-party services model?

Future of Work from Home in GBS Organizations – Separating Hype from Reality | Blog

May 24, 2021

COVID-19 has fundamentally altered the Work From Home (WFH) proposition for global organizations, prompting a shift from opportunistic leverage in 2020 to rapid integration of WFH within the future delivery model strategy. Now that the dust is settling a bit from the global health crisis, WFH strategy design and implementation will be critical to ensuring global business services (GBS) organizations’ future success. And WFH will look far different than it did in 2020.

Key learnings from 2020

Most organizations successfully transitioned to scaled remote delivery models with minimal service delivery disruptions in response to COVID-19. This experience has served as a critical proof of concept, and exposed key learnings and opportunity areas associated with scaled WFH delivery.

Let us take a closer look at several key things we learned while conducting the research for our recently published report, Future of Work-From-Home in GBS – Separating Hype from Reality:

Employee preferences have evolved as the pandemic unfolded, from a strong preference for full-time/partial WFH to a choice between WFH/WFO in a hybrid delivery model
Overall productivity has either sustained or increased for most organizations. That said, there are issues building below the surface and concerns around false positives, i.e., increase in productivity driven by higher efficiency or higher throughput
WFH can drive the next wave of cost optimization across locations for GBS organizations, though true savings will depend on their ability to exploit underlying levers such as real estate, technology, and talent
WFH has opened new opportunity areas, like accessing new talent markets, improving retention, and enhancing the employee experience, for improving the GBS talent model
WFH is prompting a shift toward a more holistic hub, spoke, and satellite model to enable hybrid delivery models and enhance employee choice and internal workforce mobility
Regulatory environment is still an unknown, though governments are taking a proactive approach to define policies such as taxation and labor laws to enable hybrid delivery going forward
The WFH model is lucrative but comes with complexities like employee fatigue, potential loss of productivity, work-life balance, and loss of organizational culture that cannot be downplayed

Our interactions with leading GBS organizations over the last 12 months revealed multiple key themes that will determine the success of a hybrid WFH model going forward:

Determining roles adjacency, and how they fit into a hybrid delivery model. This is about understanding implications on office design, real estate right sizing, and the technology interventions needed to enable this shift
Training employees, especially front-line managers and new employees, on key aspects of virtual delivery, such as target setting, self-time management, and stress management
Clear articulation and understanding of organizational culture, managing the employee experience, and driving collaboration in a virtual environment
Managing the contingent/extended workforce, including safeguarding intellectual property, monitoring performance, and sustaining productivity

While many GBS organizations are addressing key WFH-related challenges in an agile manner, they must proactively design their WFH strategy and align it with their parent organization’s needs and objectives.

Building a future proof WFH strategy

As GBS organizations build their future WFH strategy, they need to solve for six key elements.

Work portfolio – GBS organizations must utilize a structured and fact-based approach to identifying the best fit work-types and employees for remote delivery, while ensuring a balance between organizational imperatives and employee choice
Talent model – GBS organizations must address multiple talent model changes – including the evolving role of the human workforce, workforce engagement models, talent implications of remote working, and leadership development models – with a focus on adapting the workforce to future delivery models
Locations portfolio – As a holistic hub, spoke, and satellite delivery model gains traction, GBS organizations must evaluate the role of nearshore/offshore locations based on feasibility and cost savings offered by the WFH model across locations. As organizations evaluate new markets with attractive talent cost propositions, especially offshore locations, location optimization will likely happen over the next 6 – 12 months
Technology and real estate infrastructure – GBS organizations must leverage technology to achieve key organizational objectives, such as enhancing productivity, ensuring security and compliance, and improving the employee experience, and to reimagine the workspace, like floor layout, seat allocation, and office safety equipment, to adapt to the unique demands of a hybrid delivery model
Performance management – GBS organizations must identify the right levers and leverage best practices – such as adopting an outcome-driven culture, setting clear goals, and realigning the expectations with remote workers – to drive productivity improvements in a sustained WFH environment
Risk management – GBS organizations must proactively identify business, talent, data, and regulatory risks related to the WFH model and mitigate the potential impacts.

The way forward

COVID-19 has presented organizations with a unique opportunity to re-strategize their priorities, optimize their operating models, and develop a robust future-proof WFH strategy. We believe GBS organizations that proactively seize this opportunity will emerge resilient and stronger.

Read our report, Future of Work-From-Home in GBS – Separating Hype from Reality, to gain insights on global organizations’ outlook on the WFH model, the extent of adoption, key design elements and approaches, emerging trends and best practices, and key challenges and success factors to enable a scaled WFH model.

We’d love to hear about your WFH experience and approach to designing a WFH strategy for your GBS organization. Please share with us at: [email protected] or [email protected].

Strong Performance in US GBS Model Expected to Continue in 2021 | Blog

April 22, 2021

New Market Report Shows Digital Services Among Trends Driving GBS Growth

Despite the massive spread of COVID-19 across the US, the Global Business Services (GBS) model continued to grow in this market in 2020, demonstrating that the model, in its many different forms, continues to be integral to enterprise sourcing strategy.

Building on the success over the last two to three decades, GBS organizations diversified extensively and experienced growth in new verticals (such as healthcare and life sciences) and functions (such as legal, R&D, and digital).

Everest Group’s US Global Business Services Market Report provides an extensive assessment of the US GBS landscape and adoption trends, along with a deep dive into the trends leading to increased onshoring in the recent past. The report is based on Everest Group’s proprietary GBS database of more than 5,000 GBS centers.

Among the compelling findings detailed in the research are:

GBS organizations are embracing digital transformation

Both the outsourcing and GBS models continued to grow in the US in 2020, with more than 40 new GBS centers in the first three quarters. However, the pace of growth and new setups were relatively lower than the prior year. Some of the new GBS center setups in 2020 include Amazon, Denso, JP Morgan, and General Motors, to name just a few.

While traditionally, organizations have used US-based GBS organizations for customer care and back-office work, a focus on engineering and R&D (ER&D) and digital services have driven new setups in recent years. Enterprises are increasingly leveraging US-based GBS organizations to build digital hubs, especially for automation, AI, and analytics, with more than 45 percent of the setups in 2020 focused on delivering digital services. This is driven by a couple of factors. First, onshore locations can provide access to high-end talent for innovation and R&D and facilitate closer integration with business stakeholders. Secondly, resiliency shown by GBS organizations during the crisis has increased enterprises’ confidence.

This image illuminates how GBS markets are steadily moving toward digital transformation.

New adopters are driving GBS growth

Surprisingly, the majority of the new GBS setups in the US in the past years were driven by new adopters of the GBS model. This continued in 2020, with more than 70 percent of the new setups by first-time implementers. The growing maturity of the GBS model, success demonstrated by peers, and decreasing obstacles related to transitions, and legal and regulatory environments have enabled new firms to move to the GBS model.

US locations are attractive for GBS

The technology and communication verticals continue to dominate the GBS market in the US, accounting for more than one-third of the total activity. This is followed by manufacturing, which has experienced a significant increase in the share of total setups.

Historically, approximately 90 percent of firms have preferred non-tier-1 locations for GBS set up given attractive cost-talent proposition (within the US) and proximity to select industries. This continued in 2020, with tier-3/4 locations accounting for about 60 percent of new setups. Key tier-3/4 locations include Austin and Pittsburgh.

Positive Trends Emerge for Onshoring

Traditionally, key factors driving enterprises towards onshoring, especially in the US, have been ease of setup, the proximity of CS services with business and customers, and a familiar operating environment. However, in recent times, the following new drivers have emerged that will continue to contribute to a spike in GBS in the US going forward:

Rising demand for digital services – Enterprises are rethinking the role of onshore GBS to build and drive capabilities required to fulfill the demand for digital services
Tightening regulatory environment – Tightening regulatory environment (in certain verticals), increased trade protectionism, and rising stringency of visa norms have led to a recent increase in onshore center setups
COVID-19-led disruption – While the resiliency shown by GBS organizations during the crisis has increased enterprises’ confidence, they also need to ensure greater control and proximity and reduce their offshore concentration to diversify their risk portfolio

Explore the complete details of the US Global Business Services Market Report by downloading the full report here.

GBS Talent and Skilling Strategies for 2021 and Beyond: A Pinnacle Model® Study | Blog

April 14, 2021

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Global Business Services (GBS) organizations have positioned themselves as valuable partners of the enterprise, driving enterprises’ top priorities and aligning with overarching objectives. Currently, GBS organizations are evolving to become global talent hubs that house deep-domain expertise and next-generation skills for enterprises. However, with the pace of technology adoption intensifying, it’s becoming more challenging to find talent that can fill next-generation positions.

GBS organizations need a robust, futuristic skilling strategy and will want to take steps to hire talent and educate, train, upskill, and reskill their current workforce to fill these necessary roles. The below image illustrates talent-related issues that are arising for GBS organizations.

Getting on the right path with a future-ready workforce

To deliver maximum value, GBS organizations should begin to strategize how to bring in next-generation talent and deliver development opportunities to advance current employees’ abilities and skills. With future-ready talent, GBS organizations will bring even more value to the table, encouraging enterprises to view them as operating units with increased leadership contributions and less as helpers. Having the right talent could also lead to expanding into additional areas in which GBS can be more involved and entrenched with enterprise strategy and decision-making.

Further, skilled talent will provide a competitive advantage for GBS organizations, with the most success coming from those that have invested heavily in their employees’ skills and competencies. Enhancing skills within the workforce will be key to augmenting strengths and differentiators for the GBS model in 2021 and beyond.

Talent strategy focus areas

There are a few specific areas where GBS organizations can adapt when it comes to acquiring talent and advancing current workforce skills, including:

Enhancing brand perception in the talent market
Utilizing out-of-the-box talent acquisition methods
Offering learning and development (L&D) and talent reskilling and upskilling

GBS organizations that are proactive with their talent strategies, open to adopting new tactics, and not tethered to traditional methods are among those that may see the most success.

Enhancing brand perception in the talent market

With access to high-skill capabilities being a top priority for GBS organizations in 2021, there are expected changes to GBS talent-related performance metrics, including a higher bar for quickly finding and hiring talent. Turning to non-traditional methods to catch attention is becoming more common. One of the most effective approaches is a stronger social media presence to boost brand awareness and to be viewed as a desirable place to work. Hiring strategies now include being active in niche group conversations on social media and using hashtags to get in front of the right crowds.

Out-of-the-box talent acquisition methods

GBS organizations are searching out a variety of ways to find talent. Some have found success by hiring talent with specific skills from alternative and adjacent industries. There is also a different approach when it comes to reaching junior-level talent. Organizations are partnering with educational institutions, not just to offer internships, but to co-develop classes and implement projects like campus ambassador programs and hackathons. This gives the student an opportunity to get to know the organization and develop relationships with employees. One other method of attaining niche talent is through acquihiring, where a company will acquire another company, primarily for the skills of the staff.

L&D and talent reskilling and upskilling

As GBS organizations strive to deliver higher-value and multi-function services, they will not only need to find the talent, but work to keep that talent. This could be carried out by incorporating career paths and L&D opportunities, so talent stays trained and relevant on new skills. Many organizations are developing in-house learning for employees through gamification-based programs, making learning fun and improving employee engagement. Another method taking shape is peer-to-peer learning, where employees can come together to be innovative and learn from each other.

By creating a culture of learning, investing in talent, and helping the workforce to continually develop skills, GBS organizations can create a cycle of upskilling and reskilling, which could ultimately close the talent shortage gap for good.

The 2021 Pinnacle Model study for skilling strategies in GBS organizations

To discover more about talent and skilling strategies within GBS organizations, Everest Group and The Conference Board have developed the 2021 Pinnacle Model study. The research accumulated from the study will narrow down future skilling and talent strategies and provide valuable insights around best-in-class, or Pinnacle, skilling strategies in leading GBS organizations based on our proprietary Pinnacle Model framework.

How will this research help you?

By contributing to this study, you will learn how your peers – and the best of the best – are designing and implementing their skilling strategies. We will share a complimentary summary analysis of the survey results highlighting how your organization compares against peer groups with respect to capabilities created and business outcomes achieved.

Take the Study

The GBS Market: Performance in 2020 and Shaping Success in 2021 | Blog

April 5, 2021

Despite the struggles that COVID-19 threw at all industries across the world, the GBS market not only made it out, it advanced in 2020. Now, in 2021, it continues to be an integral element of the sourcing model, accounting for 27 percent of the global services market.

Everest Group’s GBS State of the Market Report: Top 2021 Priorities for GBS explores the current GBS market, how it arrived where it is today, and peak initiatives for 2021. The report examines landscape and adoption trends for a clear view forward for GBS, including top expectations of enterprises and the role that GBS organizations can play to strengthen their influence within the enterprise.

The report is based on Everest Group’s proprietary GBS database of more than 3,500 offshore/nearshore GBS centers. Throughout this blog, we’ll examine a few of the report’s many compelling findings.

Keeping pace with an agile approach

It was encouraging to discover that both outsourcing and GBS models continued to grow in 2020, albeit at a slower pace than in 2019. More than 200 GBS centers were established across onshore and offshore/nearshore locations in 2020, with the addition of 40,000+ full-time employees (FTEs). Some of the new GBS center set-ups in 2020 include Qualcomm, Microsoft, and Barclays, to name just a few.

Enterprises are increasingly leveraging the GBS model to establish digital hubs and ER&D (engineering and R&D) centers to create successful digital customer and employee experiences. The resiliency and growth shown from the GBS market in 2020 helped to deepen confidence from enterprises. For example, when COVID-19 propelled digital initiative adoption forward across most verticals (technology and communication, Banking Financial Services and Insurance (BFSI) firms, manufacturing, retail and CPG, and healthcare and life sciences), GBS organizations saw it as an opportunity to step up and deliver higher value-add digital services for enterprises. These services included expanded digital capabilities in areas such as advanced automation, analytics, cloud, platform-based engineering, etc., to meet evolving enterprise expectations and priorities.

Accelerating digital offerings is one way that GBS organizations can continue to drive operational resiliency and better position themselves as strategic business partners for change management initiatives within enterprises in 2021. This image illuminates how GBS markets are steadily moving in a direction toward digital transformation.

GBS activity across locations

After the initial shock of the pandemic, Q4 of 2020 witnessed rapid recovery, especially across India, Rest of Nearshore Europe, and Rest of Asia.

The below image portrays GBS market activity by delivery location and the number of new set-ups. Interestingly, only 13 percent of the companies that set up GBS centers in tier-2/3 locations in 2020 already had GBS centers in tier-1 locations; the remaining 87 percent of companies were exploring the offshore GBS model for the first time.

Additionally, 40 percent of GBS organizations in the report are examining geographic diversification, and 30 percent are looking into the adoption of small-scale/satellite centers to better manage both risk and future cost structures.

GBS across industries and functions

Across industries, the technology and communication vertical continued to dominate the market, contributing to more than half of the new center set-ups in 2020. The BFSI firms were next in line, accounting for one-third of the headcount (FTEs to date), followed by manufacturing.

Forging into 2021 and beyond

The GBS market stood its ground as the pandemic swept through, and in the end, it has come out a more evolved industry with overall improvement in performance. However, GBS organizations will need to continue to evolve in the aftermath of COVID-19 and as the needs of enterprises shift. GBS organizations should focus on:

Refining overall productivity as it will be the next frontier beyond scaled arbitrage
A robust, futuristic workforce strategy that can unlock high-talent capabilities
Taking a larger picture view of WFH to confirm the model aligns with overall talent goals and targeted growth
Creating a holistic and design principle-led global workforce strategy
A clear path for digital transformation, which will be paramount throughout 2021 and years after
Ensuring cost-competitiveness to avoid third-party economic comparisons
Opportunities where GBS organizations can strengthen and expand their influence with enterprises and meet evolving expectations, for example, moving from being viewed as just the enterprise’s helper to an entity that can help shape ideation, design, and even influence major initiatives

Explore complete details of the GBS State of the Market Report: Top 2021 Priorities for GBS by downloading the full report here.

We’d love to hear about your GBS strategy, please reach out to us at [email protected] or [email protected].

Takeaways from the International Innovation Summit 2020 | Blog

December 17, 2020

We recently partnered with the IT & Business Process Association of the Philippines (IBPAP) for its International Innovation Summit. The conference was a huge success despite prevailing uncertainties, bringing together global experts and leaders from the IT-BPM industry. The sessions were engaging and captured how the IT-BPM sector adapted to the disruptions caused by the pandemic and what lies ahead for the industry.

Here are our key takeaways from the conference.

Success factors for the IT-BPM industry

Organizations’ success will depend on how they capitalize on opportunities arising from the pandemic and how quickly they adapt to the evolving business landscape. In all forms of adversity, there is increased need for reliable leadership that puts people and customers first, and treats profit as an outcome rather than the goal. More than ever, it has become important to co-create with the client and culturally adapt to them.

Reinvent the worker, workplace, and workways

While there’s an immediate and critical need to redesign the worker, workplace, and workways to accommodate the new reality, different organizations are in different places in their comfort and readiness to adjust to the disrupted world. Hence, a single future of work strategy will not be effective for all organizations.

There are, however, some common themes for a successful future of work strategy. It should not be limited to work-from-home (WFH) enablement; it is important to consider the interplay of WFH with other decisions related to work. Organizations need to come up with an integrated approach involving the worker, workplace, and workways to adapt and progress in this dynamic environment.

Accelerate digital transformation and develop the digital workforce

COVID-19 has compelled enterprises to accelerate digitalization. While business transformation is fueled by increased adoption of digital technologies, the success of digital transformation is not rooted in technology.

A successful digital transformation initiative considers multiple factors – fostering a culture of continuous learning and innovation, embracing an agile operating model, creating a well-connected and collaborative workplace to enable higher output, among others.

At the core of accelerated digital transformation remains talent and, hence, the importance of future-proofing the workforce with digital skills. Talent will be the key differentiator, as work will follow where there is readily available skilled talent. The new digital era calls for increased focus on upskilling and reskilling, which can only be possible through a multi-stakeholder coalition of government, industry, and academia.

Rethink business resiliency

Every business and organization is experiencing some degree of pandemic-driven disruption. The crisis has redefined the meaning of Business Continuity Planning (BCP), and organizations need to rethink their BCPs to ensure necessary resilience.

This future resiliency will be characterized by dependability on teams and leaders, creating/fortifying a nerve center that’s enabled and empowered to respond quickly to various situations, enabling organization and delivery structure, and empowering teams on the ground. There’s also an increasing need to become more agile and cooperative with competition and more consultative with clients.

A unified IT-BPM industry forging forward in the Philippines

The Philippines IT-BPM industry has shown resilience amidst the challenges arising from COVID-19. The fact that the industry was allowed to operate even during the Enhanced Community Quarantine – as these services were deemed essential – demonstrates the government’s commitment to the industry.

The Philippines will continue to remain a key destination for services delivery due to cost arbitrage and a steady supply of young and tech-savvy workers. The industry is focusing on enhancing digital capabilities and will focus on upskilling talent – for example, one planned initiative is the National Upskilling and Reskilling program, which intends to upskill one million workers over the next five years.

The country launched the Digital Cities 2025 program to promote countryside development and build IT-BPM sector resiliency. The Philippine telecom providers are working in partnership with the government to mitigate the limitations on the retail telecom infrastructure exposed by the WFH model. And the Philippines will continue to improve its infrastructure to provide a more robust ecosystem for existing and new players.

Overall, the IT-BPM industry in the Philippines is well positioned to deliver services at a large scale due to its large talent supply, strong language proficiency, attractive cost savings, robust ecosystem, and strong government support. The industry also plans to take proactive measures to address some of the challenges exposed by the pandemic. It’ll be interesting to see the developments in one of the leading global locations for IT-BPM services delivery.

Read more about Everest Group’s latest research on the impact of COVID-19 on delivery and location strategies; our perspectives on services delivery from the Philippines; and/or IBPAP.

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Category: Shared Services/Global Business Services Centers