Managing Principal, Sourcing Change
Executive Advisor, Everest Group
Is it a normal silly season? Or is it a symptom of the times? Business dynamism is at an all-time high, compelling smart GBS organizations to go into continuous change mode.
This year there seems to be more MAC (moves, adds, and changes) in GBS delivery networks than usual. Work is transferring from center to center, often in response to the need to rebalance locations as a result of the Ukraine war. Talent challenges are causing GBS organizations to rethink what goes where and whether it’s time to break the Costa Rica/Cracow/Warsaw/Manila/Hyderabad-Bengaluru-Gurgaon mold and invest in locations that haven’t yet been saturated. And the perennial, the client-giveth-to-the-outsourcer, the client-taketh-away syndrome seems to be in full flow as the BPOs face the same talent and delivery challenges as captive operations do. But that’s another, more complicated challenge for later on—let’s focus on in-house center-to-center transfers.
Is a delivery network switch a non-event? How do you make it so? I’ve been thinking through a challenge that gets almost no airtime but is a fact of life for the majority of maturing GBS organizations—if they always have their fingers on the pulse of the business.
The common wisdom amongst many of the GBS glitterati is that any change in delivery location should be invisible to its stakeholders. Why mount a full-fledged change management initiative when moving bill paying from one location to another should be a non-event?
Wrong. Wrong. Wrong. Ergo, the duck as an analogy. It’s a worthwhile goal to aim for a non-event for stakeholders. But under the surface, GBS had better be paddling like hell. Be prepared, people. A GBS inter-center transfer of work can be a surprising and silent GBS headache.
Here’s what I see as the difference between transition and transfer:
- Since the main goal is to make a delivery switch part of silent running and ultimately frictionless, the transition playbook, with its high levels of negotiation, communication, and engagement, is usually not fit for purpose
- In a center-to-center transfer, as opposed to a transition, GBS organizations forgo setting up formal channels to “explain or complain”
- The focus shifts to users as opposed to the business. In a transition, aligning the business to working differently is critical to success. In a transfer, users usually bear the brunt of the pain
- In a transition, employee attraction, training, and institutionalization is critical. In a transfer, the impacts on staff are greater. It means new work, new roles, and often no jobs. The culture of the sending team may be different from that of the receiving team. Since light-out GBS is still a pipe dream, the dependency on people becomes a wildcard in the transfer
Thinking about moving the deck chairs around? Let’s examine what needs to be true to be successful.
First off is the concept of legitimacy. If a GBS is not deemed to be legitimate by its most critical stakeholders—the functions and the business—transfers are a non-starter.
- The GBS model must be stable and accepted by key stakeholders. Ideally, GBS should be viewed as a type of managed services model, with full purview over delivery location decisions
- A well-defined strategy should be in place, with clearly articulated and previously communicated principles backed with data as to what should go where (also known as sign on the door). This is critical to quash speculative debate about the perceived advantages of Bengaluru (Bangalore) over Bucharest
- Any financial implications of the transfer must be calculated and communicated to the stakeholder in advance, such as tax and transfer pricing, in order to maintain transparency. Nothing crushes trust like a bill no one expected in a ramp down and ramp up
If legitimacy is established, it’s time to examine operations to ensure that the ball won’t be dropped in the process of transferring work. Prepare for trouble if you can’t tick off the following boxes:
- The impacted processes are standard and stable across the delivery network. The aim here is lift and shift, not fix and shift
- SLAs are current, in place, and accepted, with limited deviation expected in the center-to-center transfer
- Now, this sounds a bit picky, but if experience is not standard across the network, with such elements as generic addresses, catalogs, and avenues to access GBS in place, you are likely in for a heap of hurt as users struggle to make the switch
- There is a reasonable level of process digitization with limited reliance on humans. The higher the automation, the greater the chance for a frictionless transfer
- There is no language dependency required for process delivery, or necessary language capability available in the receiving location
Now it’s time to start the action. Make sure the approach is tailored to the change at hand, or in the immortal words of Gilbert and Sullivan, “let the punishment fit the crime.”
- Keep your tendency to “tweak” held in check. Remember that the goal is transition, not transformation. Save radical process improvement for another day
- Stay flexible. There will be surprises. The transfer plan must be dynamic
- Acknowledge and work with cultural differences in the delivery teams. While it’s stating the obvious, delivery pivots on the culture of the team performing the work, especially when it comes to customer experience. Make sure that the impact of the cultural differences in location are understood and addressed
- Over-index on the comprehensiveness of knowledge transfer. We think we’d documented the dickens out of our processes, but sadly, that is not always the case. An obsession with accurate knowledge transfer is especially critical when the loss of jobs is part of the plan
- Establish realistic timelines. PPT timelines are easy to create, but the reality on the ground is usually quite different. Regulatory, recruitment, office fit out, and other requirements likely will take more time than expected. Plan for it
- Develop well-thought-out and targeted communications, escalation, and remediation measures. Sure, you want to play under the radar. But these assets are as important in a transfer as in a transition
- Focus on care and feeding of impacted staff. Dealing with staff may be your biggest communications/change challenge. Unanticipated flight or disaffection on either side of the transfer has a high potential for derailing
- Acknowledge and manage change implications on vendors and other third parties. Forget them at your peril; they are part of your GBS service ecosystem
Back to the duck. Center-to-center transfers should be seen as graceful and calm as a duck swimming across a pond. But the reality underneath the waterline must be very different, with the GBS organization paddling like all get out to effect a transfer that doesn’t go under.
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