BlackLine Blog

July 18, 2023

The Top 5 Things for a GBS Leader to Consider

Modern Accounting
5 Minute Read

Tom Bangemann

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This post was contributed by Tom Bangemann. 

There are many topics and trends for Global Business Services (GBS) leaders to consider and it can be hard to sort and rank them. Here is my top 5 list for today's demanding environment. The topics can vary a bit by function, process, geography, industry, and the use cases and metrical impact will then naturally vary, but the general list is the same. Details and data here are examples of the accounts receivable/order-to-cash area.

1) Technology

The main activity in shared services/GBS in general is to automate as much as possible. The whole concept is based on consolidating and standardizing, and then automating, the larger volumes as far as possible to produce efficiency but also effectiveness and (in today's world) value through experience and insights.

Most GBS today cover a large part of finance processes in their scope. Transactional Finance, especially PTP (AP) and OTC (AR) are covered to a large extent, typically about 80% of all activity is located within GBS. Therefore, the financial subledgers are still the prime example to exhibit what works and what is needed in a successful shared services/GBS operation which is why we use the AR/OTC area as an example.

In today's fast-paced business environment, organizations need accurate and timely financial data to make informed decisions, so the insights component that supports decision-making is becoming ever more relevant. However, manual reconciliation of cash and accounts receivable (AR) transactions can be a laborious and error-prone task, consuming valuable time, and resources.

That's where automated solutions step in, offering a compelling solution for finance professionals seeking to optimize their processes, minimize errors, and gain valuable insights.

Why an Automated AR Solution Should Be an Integral Part of Your Business

Save Time and Boost Quality
As your organization expands, so does the volume of payments and AR transactions that need to be reconciled. Manually reconciling these transactions is a time-consuming endeavor, involving arduous searches for remittances, customer account information, and data entry into your ERP.

By leveraging an automated solution, you can streamline this process and allocate your time more effectively. In advanced systems, the technology continuously learns and automatically matches cash receipts to open AR invoices. This type of automation significantly reduces the need for manual intervention, enabling you to concentrate on analyzing exceptions and promptly addressing customer concerns to give a better customer experience.

Accounting Today reports that companies utilizing automation in their AR processes experience a 70% reduction in time spent on reconciliation tasks.

Reduce Errors & Enhance Accuracy
As the volume of payments processed increases, so does the risk of human error. Manual reconciliation and data processing are prone to mistakes, leading to rework and inaccurate financial data that can have serious repercussions for your business.

A study conducted by The Hackett Group reveals that organizations employing automation technologies for financial processes experience a 77% reduction in the number of errors.

Gain Actionable Insights for Strategic Decision-Making
As your organization grows, gaining valuable customer insights becomes increasingly vital. Automated AR solutions empower you with real-time data on payments, customer trends, and changes, providing the decision intelligence necessary to make strategic choices.

With these solutions, you can identify patterns in customer payment behavior, identify customers who consistently pay late, and take proactive measures to reduce payment delays. Furthermore, you can assess customers who may pose a credit risk and implement measures to mitigate that risk. Additionally, advanced analytics capabilities allow you to generate future payment forecasts based on historical payment data from your customers.

A report from Deloitte highlights that organizations leveraging advanced analytics to drive decision-making experience a 33% improvement in customer satisfaction and a 32% increase in revenue, further demonstrating the potential for automated solutions to deliver actionable insights that can positively impact your business.

Improve Efficiency & Refine Processes
Efficiency is a crucial factor as your organization expands. The time and resources saved by automating your AR processes with can be reallocated for more valuable activities. For instance, you can utilize the time saved to make focused collections calls, nurture customer relationships, or fine-tune your processes.

By streamlining your financial operations, you can drive operational efficiency and achieve greater productivity. A study conducted by the Aberdeen Group, reveals that organizations automating their AR processes experience a 28% reduction in administrative costs.

Increase Agility Through a Scalable Solution

In the business environments today, agility plays a key role. GBS can increase the agility of the whole organization by automating a significant portion of work conducted. A scalable AR solution is a great example of technology adding agility to be more resilient in an uncertain world. It enables businesses to handle growth, adapt to changing circumstances (both internal and external), enhance customer experience, improve operational efficiency, and optimize costs. It also provides the necessary flexibility and capacity to support the organization's AR processes as they evolve.

As a company expands and acquires more customers, the volume of invoices and AR-related tasks increases. A scalable AR solution can handle the growing workload efficiently without significant disruptions or resource constraints. It allows the organization to manage AR processes effectively regardless of its size or growth rate.

A scalable AR solution enables organizations to provide a seamless and consistent experience to customers, regardless of their size or transaction volume. It ensures that invoices are sent promptly, payment options are diverse and convenient, and any customer inquiries or issues are addressed efficiently. This leads to improved customer satisfaction and strengthens customer relationships.

2) Talent

To implement and run all the technology discussed above, we need people. Since the end of the pandemic, we are all looking for talent. Relatively small movements in the labour force and changes in their behaviours have led to an unbalanced labour pool in many geographies and sectors, at least “unbalanced” from an employer´s point of view.

While the overall situation is clear, there seems to be a sign of light at the end of the tunnel. The upskilling and re-skilling efforts seem to be working to an extent. SSON Research & Analytics has found out that 58% of GBS organizations were looking for automation skills in 2022, while in 2023 this has dropped to 39%, a drop from position 1 to position 5 in the overall skill rankings.

Nevertheless, there are still significant gaps in the employee life cycle, and the overall need and recommendation can only be to keep investing in human capital/people in general, both in effort as well as in funding.

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 has even more. Nevertheless, about half plan to add to or change the footprint. A significant wave of activity on the location front is ongoing.

4) Sourcing/Outsourcing

The sourcing model has always been a key dimension of the GBS model. While there are very different views and preferences regarding captive and outsourced models, SSON Research & Analytics published a recent outsourcing study that revealed 80% of companies were happy with their captive model of the past and thought it would have provided more benefits than an outsourced approach.

Interestingly, 73% of companies plan for the future in a hybrid or outsourced model. Both outsourcing and offshoring are expected to increase. The explanation for this “outsourcing conundrum” is manifold: despite the “positive experience” with the captive approach in the past, several companies expect the future to include a somewhat different set of requirements for them. They might want to distribute the location risk and therefore diversify. Some will want to tap into labour pools not accessible to them. Others still have issues with the funding of transformation processes and the technology required for that.

A combination of the above reasons leads a majority of companies to consider more outsourcing in the future. The absolute majority of models is likely to be hybrid, the basic philosophy being to have “work done by whoever is best suited for that work.”

 5) KPI Models & Metrics

“You cannot manage what you don’t measure” is a famous quote by Peter Drucker, and of course still very true. The KPI models have evolved, and the balanced scorecards have become more balanced to include other metrics than just financials and to be also forward-looking instead of just staring at the rear mirror.

Also, KPI models are now increasingly incorporated into systems or tools instead of counting and recording manually. The development in this area is significant and very positive, but that has also led to a perception that “KPIs are less relevant” because the topic is under control. KPIs, however, are as relevant as ever, and with scope expansions and geography enlargements, they need updating and upgrading.

KPI tools need to be extended and graphical visualizations today are more demanding than years ago. AI kicks in also to produce insights half-automated and who knows what ChatGPT-type capabilities can add in the near future. In general, metrics are back!

About the Author


Tom Bangemann