The new relevance of GBS as a transformation agent

Global business services (GBS) have been associated with driving process optimization and transactional cost efficiencies for years. Few would mention them in the same sentence as “transformation.” But enterprises take advantage of any available technology, operating model, or service delivery levers to drive systemic transformation.

Business services organizations can drive transformation if they leverage their key tenets correctly. Those tenets, which can co-exist at different maturity levels, are

• Globally focused
• Experience led
• Technology and platform enabled
• Outsourcing and managed services supported
• Ecosystem friendly
• Data analytics aligned

The centrality of GBS in organizations is a hidden advantage of transformation

Organizations have many levers at their disposal and opportunities to drive transformation. GBS plays a unique role because of its cross-functional nature, end-to-end process delivery, and a seat at the highest levels of management.

GBS execution helped guide many organizations through the pandemic, and they are increasingly being seen as a way to navigate services delivery transformation on an end-to-end, value-accretive basis. They are often the origination point for deploying scaled managed services in F&A, tax, procurement, applications management, and risk and cyber. Managed services will increasingly be a preferred services delivery model for outcomes-based activities, upon which transformation depends. Recent research by HFS shows that more than 50% of large enterprises source up to 25% of corporate services through a managed service, confirming that managed services are reaching a critical mass state of adoption.

The Big 4 address GBS opportunities with advisory practices focused on outcomes, technology, and transformation

The narrative through 2020 was GBS being the efficiency engine for most major enterprises. The Big 4 and other major consulting firms have slowly repositioned their GBS advisory practices to be outcome and technology focused (see recent partnerships and joint offerings with software companies such as ServiceNow).

EY has a more transformative view of GBS and its services to this market, transitioning seamlessly from a high-level 30,000 feet overview to granular details. EY defines a GBS 1.0 and NextWave GBS model with a clear delineation between these two states (see Exhibit 1). The current model focuses on automation and transactional process efficiency. The transformative model shifts the emphasis to user experience, partnership delivery, solution innovation, talent optimization, and value-focused outcomes.

Exhibit 1: The next “s-curve” centers on enterprises making GBS their “transformation engine” and being at the forefront of driving business performance

Source: EY and HFS Research, 2023

The linkage to the One Ecosystem mindset and model

This GBS journey aligns almost exactly with the HFS OneEcosystem™ model (see Exhibit 2), linking customer, partner, and employee experiences to drive to a new plateau of service delivery. At the end of the day, NextWave GBS, OneEcosystem, and other models are frameworks for enterprise transformation, leading to a radically different operating model.

Exhibit 2: The evolution from OneOffice™ to OneEcosystem™ adds a new dimension of partner experience to employee experience and customer experience

Source: HFS Research, 2023

The Bottom Line: GBS organizations and services providers are symbiotic in driving transformation.

GBS transformation at an enterprise level depends on service providers like the Big 4 offering an integrated set of advisory and delivery solutions. The challenge and ultimate opportunity for firms like EY in helping enterprises to embrace NextWave GBS or a OneEcosystem model will be to make engaging with their firm’s full capabilities seamless and easy. For the last decade, GBS has focused on identifying process improvements and recommending a service delivery mix of captive and outsourcing operations and automation opportunities. The new world emphasizes services around change management, advanced technology and applications deployment, talent strategies (especially associated with hybrid work delivery), and new governance models.

GBS’ success over the next five years will depend on how well these organizations drive transformation. Concomitantly, success for services firms will be measured by how quickly and successfully they can integrate all these services that, in the past, have existed in separate service lines within the Big 4 and other consultancies. The times demand action and new ways of thinking about the role and capabilities of GBS by the enterprise. The challenge is for services providers to step up in terms of providing out-of-the-box thinking and advisory solutions.