Top 5 Things a GBS Leader Shouldn’t Do

Whatever your role or title, you will find a range of articles telling you what you should do. While that is useful, I find that learning and memorization work even better when something goes wrong. Instead, I present a list of things not to do.

These days, there are many topics and trends for GBS leaders to consider, and this list of “not to do” still relates to the relevant topics and trends. These are some of my observations about things that could go wrong or inhibit us from moving forward.

1) Transformation

We have been on a transformation journey for so many decades, it seems like we have been transforming forever. The transformation journey is depicted in almost every slide deck and serves as a generic explanation for why all kinds of things need to be done. We have been in a VUCA world, a crisis situation, a difficult market, a pandemic, and expecting a downturn or recession many times before, and still, the transformation is ongoing. It’s likely we are in transformation mode for good and correct reasons, but why does it take so long if it is so urgent and important?

Some tend to think that transformation is similar to transition or change in general. But while change takes place all the time, the need for transformation represents a significant change and is different from transition. We are not just trying to improve process performance like OTC or other areas of GBS by automating them and increasing productivity or lowering costs. Transformation is about selecting a completely different approach to solve the existing underlying problem. Transformation should always start by asking what we are trying to achieve, not how to improve something existing.

Transformation is a synonym for metamorphosis in biology. It refers to, for example, a caterpillar becoming a butterfly. It is a different animal. While constant change can lead to long-term success, what we should not do in GBS is only focus on small changes in the existing approach, process, or technology. Rather, we should start with the desired outcome and how to get there.

2) Training

One of the hottest topics currently is the difficulty of finding people with the right skills and capabilities. This issue is global, and everyone knows about this problem. To implement and run the GBS processes and operate the technologies, we need the right people. Since the end of the pandemic, we are all looking for talent. Relatively small movements in the labour force and changes in behaviours have led to an unbalanced labour pool in many geographies and sectors, at least from an employer´s point of view.

With the dawn of generative AI, the gap will just increase. Enormous numbers of AI experts will be needed very soon. It seems unlikely the market will fix the lack of skills issue quickly. Hence, it seems obvious that the good old training approach is back: instead of buying ready-made employees from the market that you can insert into a process in no time, we might have to invest and train again. Upskilling and re-skilling also appear to be good options.

Nevertheless, while many companies agree with this view of the market, they do not invest much in learning and development. While select organizations have tripled or quadrupled their efforts, the average training budgets in GBS are around 1,000 USD/FTE/year (SSON Research & Analytics). This is less than one GBS conference ticket. In a market with rapidly rising skill demands, this does not appear logical. So, don't save on training, invest!

3) Location

The increased uncertainty in the past years has led GBS organizations to re-assess their location footprint. While we assume within the GBS model, and with advanced technology and competent people in place, that a defined process could be performed from basically anywhere. In reality, some of the above requirements are not as easy to fulfill in the current situation, especially the talent requirements. Companies potentially want to tap into more labour markets, or simply distribute the risk and spread the work.

SSON Research & Analytics recently revealed that 2/3 of GBS organizations have between 1 and 6 locations, and the rest have even more; nevertheless, about half plan to add to or change the footprint. A significant wave of activity on the location front is ongoing.

The actual location selection process is one of the favorite activities of many in GBS. Absolutely everyone has an opinion about which location makes sense or doesn´t. The trips to assess location options are the most sought-after trips to get onto. Oftentimes, the targets are very exotic places otherwise known only from a holiday catalogue.

While it is understandable and very human to appreciate an inviting location, possibly in a warm climate with friendly people and a great party, locations selected for GBS should work for GBS in the longer run. Do not go for those with the highest perks or subsidies, as they will run out. Do not select a location based on what you like, but one that works for the company. Those that don't work will come back chasing you, and the next location selection might be done by someone else.

4) Technology

Many companies running GBS are not yet using the most modern available tools.

When asked why, I often hear an explanation stating that it is not clever to be a beta client or implement a technology immediately when released, but rather wait a while for some testing and piloting to take place and the errors to be resolved.

While it might sound logical and clever initially, there is a big risk in this. These same companies often keep waiting and waiting for bugs to be fixed or for the price to come down. This leads to a situation where the next big thing enters the market, the next technology wave takes over. The company in question now does not want the old technology anymore and waits for the new one to get established. While the cycle runs again and again, the company does not improve and loses time. So do not wait for technology to be perfect or for others to fix bugs for you—get into it ASAP.

5) Automation

Automation is closely related to technology, and you could argue it is the same point. I want to highlight an additional aspect of this though.

As a reminder, automation is the core of what we do in SSO/GBS. Everything in this model is about automating processes to become more efficient and effective and to provide value to our customers. Automation will always be on a top five list of any sort.

A common issue in automation efforts is that people automate a part of the process, instead of the whole process. A well-known example is the digitization of paper where forms, letters, orders, and invoices are digitized, only to be printed out again by the receiver to work with them manually, file them, etc. These automation breaks make the process slow and destroy some of the targeted efficiency gains.

My final advice is not to automate bits and pieces but rather take an end-to-end view and automate holistically. The component with the lowest automation level will drive your overall automation success.

To learn more, watch this on demand webinar Future of Finance Evolution for GBS—featuring the author of this blog—to discover:

• Emerging trends in finance, GBS, and shared services

• Best practices for optimizing accounts receivable and order-to-cash processes within GBS and shared services

• Tips for practical solutions to stay competitive in the ever-changing financial landscape

Whatever your role or title, you will find a range of articles telling you what you should do. While that is useful, I find that learning and memorization work even better when something goes wrong. Instead, I present a list of things not to do.

These days, there are many topics and trends for GBS leaders to consider, and this list of “not to do” still relates to the relevant topics and trends. These are some of my observations about things that could go wrong or inhibit us from moving forward.

1) Transformation

We have been on a transformation journey for so many decades, it seems like we have been transforming forever. The transformation journey is depicted in almost every slide deck and serves as a generic explanation for why all kinds of things need to be done. We have been in a VUCA world, a crisis situation, a difficult market, a pandemic, and expecting a downturn or recession many times before, and still, the transformation is ongoing. It’s likely we are in transformation mode for good and correct reasons, but why does it take so long if it is so urgent and important?

Some tend to think that transformation is similar to transition or change in general. But while change takes place all the time, the need for transformation represents a significant change and is different from transition. We are not just trying to improve process performance like OTC or other areas of GBS by automating them and increasing productivity or lowering costs. Transformation is about selecting a completely different approach to solve the existing underlying problem. Transformation should always start by asking what we are trying to achieve, not how to improve something existing.

Transformation is a synonym for metamorphosis in biology. It refers to, for example, a caterpillar becoming a butterfly. It is a different animal. While constant change can lead to long-term success, what we should not do in GBS is only focus on small changes in the existing approach, process, or technology. Rather, we should start with the desired outcome and how to get there.

2) Training

One of the hottest topics currently is the difficulty of finding people with the right skills and capabilities. This issue is global, and everyone knows about this problem. To implement and run the GBS processes and operate the technologies, we need the right people. Since the end of the pandemic, we are all looking for talent. Relatively small movements in the labour force and changes in behaviours have led to an unbalanced labour pool in many geographies and sectors, at least from an employer´s point of view.

With the dawn of generative AI, the gap will just increase. Enormous numbers of AI experts will be needed very soon. It seems unlikely the market will fix the lack of skills issue quickly. Hence, it seems obvious that the good old training approach is back: instead of buying ready-made employees from the market that you can insert into a process in no time, we might have to invest and train again. Upskilling and re-skilling also appear to be good options.

Nevertheless, while many companies agree with this view of the market, they do not invest much in learning and development. While select organizations have tripled or quadrupled their efforts, the average training budgets in GBS are around 1,000 USD/FTE/year (SSON Research & Analytics). This is less than one GBS conference ticket. In a market with rapidly rising skill demands, this does not appear logical. So, don't save on training, invest!

3) Location

The increased uncertainty in the past years has led GBS organizations to re-assess their location footprint. While we assume within the GBS model, and with advanced technology and competent people in place, that a defined process could be performed from basically anywhere. In reality, some of the above requirements are not as easy to fulfill in the current situation, especially the talent requirements. Companies potentially want to tap into more labour markets, or simply distribute the risk and spread the work.

SSON Research & Analytics recently revealed that 2/3 of GBS organizations have between 1 and 6 locations, and the rest have even more; nevertheless, about half plan to add to or change the footprint. A significant wave of activity on the location front is ongoing.

The actual location selection process is one of the favorite activities of many in GBS. Absolutely everyone has an opinion about which location makes sense or doesn´t. The trips to assess location options are the most sought-after trips to get onto. Oftentimes, the targets are very exotic places otherwise known only from a holiday catalogue.

While it is understandable and very human to appreciate an inviting location, possibly in a warm climate with friendly people and a great party, locations selected for GBS should work for GBS in the longer run. Do not go for those with the highest perks or subsidies, as they will run out. Do not select a location based on what you like, but one that works for the company. Those that don't work will come back chasing you, and the next location selection might be done by someone else.

4) Technology

Many companies running GBS are not yet using the most modern available tools.

When asked why, I often hear an explanation stating that it is not clever to be a beta client or implement a technology immediately when released, but rather wait a while for some testing and piloting to take place and the errors to be resolved.

While it might sound logical and clever initially, there is a big risk in this. These same companies often keep waiting and waiting for bugs to be fixed or for the price to come down. This leads to a situation where the next big thing enters the market, the next technology wave takes over. The company in question now does not want the old technology anymore and waits for the new one to get established. While the cycle runs again and again, the company does not improve and loses time. So do not wait for technology to be perfect or for others to fix bugs for you—get into it ASAP.

5) Automation

Automation is closely related to technology, and you could argue it is the same point. I want to highlight an additional aspect of this though.

As a reminder, automation is the core of what we do in SSO/GBS. Everything in this model is about automating processes to become more efficient and effective and to provide value to our customers. Automation will always be on a top five list of any sort.

A common issue in automation efforts is that people automate a part of the process, instead of the whole process. A well-known example is the digitization of paper where forms, letters, orders, and invoices are digitized, only to be printed out again by the receiver to work with them manually, file them, etc. These automation breaks make the process slow and destroy some of the targeted efficiency gains.

My final advice is not to automate bits and pieces but rather take an end-to-end view and automate holistically. The component with the lowest automation level will drive your overall automation success.

To learn more, watch this on demand webinar Future of Finance Evolution for GBS—featuring the author of this blog—to discover:

• Emerging trends in finance, GBS, and shared services

• Best practices for optimizing accounts receivable and order-to-cash processes within GBS and shared services

• Tips for practical solutions to stay competitive in the ever-changing financial landscape