Hi everybody. So in this session, I’m going to walk you through the GBS evolution, and what we see as consultants sitting on the other side, our clients doing and I will co-present together with Kamila. So for a couple of decades, Global Business Services have been set up, operated, and also seen as back-office processing units with a goal the primary goal of driving cost reduction, mainly based on scale and labour arbitrage. Today, leading organizations are positioning their Global Business Services as a transformation engine. And while many of them have already started the journey, only a subset of them have been able to really deliver breakthrough value. And based on our experience, it’s around 20% of them. Now, if we look at the next wave of GBS that delivers breakthrough value, what are the outcomes that we would typically see, and it’s about four outcomes. The first one is, again, efficiency, but it’s mainly driven. So cost reduction, if you want. It’s further efficiency driven by technology, hyper-automation. The second one is about insightfulness to inform a better decision making but also reduce business risk. And GBS is the part of the organization where a lot of data and information recite. That’s the power of GBS. The third one experience, as Sam has mentioned, also a few times in his presentation. Nowadays, we talk about employee experience, we talk about customer experience, we talk about partner experience, and the fourth one is GBS as a digital transformation engine driving the digital transformation for the entire enterprise. So I think the first question here comes and it is where is your organization? Is it part of that 20% that has been able to leapfrog to Next Wave GBS or is it part of the 80% which is probably still either trying to transform by implementing technology by probably approaching end to end services and more or still struggling in delivering the initial business case driven by Labor arbitrage I see the trends Very consistent. So the majority of the organization basically, agree that probably the 20% might still be very optimistic as the percentage of organizations that have been able to get to the next S curve. Now, what has happened recently with the COVID 19 pandemic, well, it has raised GBS expectations. These are the results of the research we did last year, together with ssogen. Actually, the two main outcomes are GBS will become more and more digitized. But actually also driving digitalization for the wider enterprise. And also GBS, as an organization becomes or as an entity as an organization within the wider enterprise, becomes more important as especially during pandemic GBS has been able to deliver operational resiliency. Now, what is very interesting also through CEO research that we did more than 80% of the CEOs intent to increase the spending in technology modernisation And so this means that for GBS there are two key elements driven by a pandemic is increased budget to invest in technology. And second, it is an increased focus on service excellence. So quality. Now, what does it mean? It means that for companies that are still on the journey, either they make the leap, you know towards the next wave GBS or actually, they really risk getting extinct. Why? Because if you have a GBS organization, which is not only delivering cost reduction but also adding value to the organization, how do you enable the business to grow? It’s great, you move forward. And actually, you can leapfrog to Next Wave GBS but if you’re still delivering the initial business case based on labour arbitrage, well actually, you can also probably easily just think about outsourcing your operations to an outsourcing provider who can continue helping on that cost reduction, but you can free up time management capacity to focus on a business transformation. Basically, you’re not targeting to build transformative capabilities in your GBS organization to drive any digital transformation from there to the wider enterprise.
So what do we see as being a differentiating element for the organizations which are able to make the step towards the next wave of GBS, it’s really the ability to transform holistically across the people process and technology dimensions, rather than just across one out of them. And so what that means we will see the details now. I mean, technology is one of the dimensions and we see often and often companies pretending to implement another two GBS without necessarily being able to get the benefit, the full benefit that the tool can bring if the process. I mean, Michael, walked us through the experience, he had added us to the importance of looking at all these three elements together in a harmonized way. But what does it really mean? So if we look at the people dimension, so what is important and we see more and more is the ability to bring into GBS, a new mindset, a transformative mindset. The idea often is I can do a little bit more than what I’ve been doing till now let me focus on continuous improvement. It’s all great. But you need to think about, you know, start disrupting as well. Otherwise, it’s just like an incremental improvement. Where do you make things really different? And so it’s a combination of mindset on one side, and capabilities with the ability again, I mean, we had a perfect example. And I was glad to hear you, Michael, providing a clear, tangible example of what does it mean really to do this in reality, so bringing new skills onboard, or train people upskill existing people, but what is also very, very important is GBS becomes a career accelerator for many individuals. And actually, you know, if you want to step up, you need to spend a certain amount of time in GBS, which means actually, it’s really about building the GBS brand for people as a great place to work for a certain period of time, and also is a way to prepare for the next step. But Kamila, you may want to work as a bit through also your experience being on the other side when it is about people GBS and talents. Over to you Kamila.
Thank you can you hear me? Yes, loud and clear. Great, great, great. I was scared that technology will not work. So So yes, shortly I will say I’m working for Japanese tobacco currently, and I’ve been around 15 years in different GBS chip services environments, including working before with Michael at Adidas. And currently, you know, I work for a company where exactly a lot of relationship-driven culture, a lot of alignment, a lot of things on the people, similar, like Michael mentioned. And on top with the concrete, as you mentioned, it’s all coming and now the need for that slightly different talent and, and as well different leaders in the space. So as we put it, yes, there is a hybrid working culture. So we need to find out how we work from home. Like now you know, from how you can do things for out of your living room or a kitchen table, a combined with with the office, how you do as well, onboarding for the people who maybe don’t come to the office at all, in some cases, how you tap to this global talent pool. And still, there is a lot of barriers from a tax perspective. But all of us I think, trying to find access to the people who are the best suitable to do this special breakthrough value delivering GBS. And as well a build the culture and I would say COVID cost us a lot with the becoming digital if we wish or not because we had to start working with all the tools without being really asked from one day to another. And in JTI we are very young joiners, the GBS is just created. And we try to do everything at once to create this culture get top-notch onboarding getter, great talent and as well the same time implement as well technology and get all these brake fluids tools and become not just labour arbitrage. But the valued partner in the year one of the existence so very ambitious agenda. And maybe we could move to the next page.
Thank you, and what are the new kind of skills new old, but what skills we need in such an environment when people need to work remotely, they need to understand the data, we need the creativity and innovation not just running operations, as Maria said, this became almost a commodity you can outsource it even with the companies have strong internal cultures and leaders need to look strategically way ahead, we need to plan what will happen in 24 as well, not just ensuring you know, next month and close or year and close right. And people need to understand the business and GBS is not any more back-office function. And we need to understand what our company does, how we contribute to the business especially in the functions like order to cash where our people work directly with external customer. And as well all this agility change orientation, I know agility is abused word, but we need to adapt the way we work sometimes from one week to another change completely the delivery interaction model anything and relations became even more critical than they were before. Just imagine you know, I could say I have an ISEP 78 markets, but in reality, the 78 markets a few 1000 People who see the calm predominantly except our factories nobody is is is going much to the office here and how you build relationships with all of those people how do you explain that change how you explained to them how to work differently and how you engage your one and a half 1000 employees that requires definitely a completely different skill. Then we had when you were sitting at the floor controlling people check in checkout going home and delivering an almost like say factory when of the services and we need to as well have the people who are not scared of artificial intelligence chatbots being so, they can trust the technology. So a lot of changes happening, some of them accelerated by COVID some of them just happening anyway. And I can see as well, from me personally as, as a leader in DBS, how much I had to adapt to and how many new things I have to learn to be up to speed to not be as Maria Said, as think that like dinos hours of the threat services, and you know and be gone, right. So, so that’s that so from my side, Maria, back to you,
thank you. Thank you, Kamila. And there is also something else which is very, very important. I mean, the approach that GBS takes differs per function in the way GBS should engage the business I mean going to the commercial organization or to the supply chain organization talking about I can do the same you do but for less doesn’t work commercial supply chain are typical functions interested in how GBS can help them with maybe some algorithms, you know, that decrease the business risk rather than coming up with a cost reduction type of factor, maybe the same does not apply to some other functions. So there is an element of I would say agility that GBS needs to have also in the way the different functions are being approached. And one of the most important things is really like the value what value can GBS deliver to the organization if you think about the order to cash process, if you think about it can differ per industry, but the amount of revenue leakage that GBS can help reduce, just sticking to order to cash for the moment in where to like hydrangeas really helps. It is amazing. And I don’t know how many FTE is you need to think about to be able to get not even close to the same amount of value that you will be able to achieve through the navigate through the revenue leakage. Moving forward, so till now, it was all about the people dimension, talent management NGBs. What about processes nowadays? I mean, I often hear customers saying, I have the order to cash, procure to pay record to report hire to retire GBS. But actually order to cash is nothing else than an invoice to cash. In the best-case scenario, it is a credit to cash. I’ve seen very few organizations these days, which are really running through end to end order to cash or through end to end procure to pay where the struggle is really the ability to break silos across functions, whenever well established global process owners organization, which is an in charge of defining one end to end process vision, connecting with the different functional leaders and defining with them the vision but also how what is the plan to achieve it? And especially what are the KPIs that are needed to measure the end to end process performance? And so what is the role of GBS in that context? And what GVS will do to help the business improve the end to end process performance rather than doing the same at a lower price. The other thing is, we said earlier in the importance of also being able GBS to disrupt rather than just driving continuous improvements. I mean, think also what type of processes or process steps are simply not needed. And you can just get rid of them. Instead of trying to make you know minor fixes here and there. So today we talk about the ability to define an end to end lean, measurable, automated process. And I still see clients really struggling with having a maximum of five KPIs meaningful KPIs, to say this is the performance of my end to end order to cash. It doesn’t exist. It depends on who you talk to. But nowadays, I mean, if we see how GBS is evolving, we talk about an end to end integrated services besides talking about an end to end process execution, and so the ability for GBs of going beyond the process execution, what can I anticipate for the business so how do I proactively go to the business with information and with data that will prevent the business coming asking for the questions. Or if we look at order to cash to prevent customers coming with the questions when I can provide them what they need in the format they need when they need it. So if we look at again, your GBS organizations, are you today equipped with delivering an omnichannel service experience to the business and potentially also to external customers in case your GBS is also serving your external customers? Oh, I see the same trend as before, with one exception there in the back.
But I hope you are on the journey to deliver that experience. And so if we look at the technical elements, we said, you know, technology is just one of the dimensions. And again, companies tend to invest a lot in technology, waiting for GBS, or within the business without necessarily thinking about an integrated architecture. Again, the example of Michael was amazing of hydrogels being integrated with Salesforce. I have a few questions for you, Michael, later happy to get some additional views. But what we see there is really, GBS is the place where if we talk about automation, we talk about scale, and we talk about speed, but we also talk about the integrated architecture. Again, we’ve seen often many clients doing a lot of investments but without thinking about how all these technologies are getting integrated with each other delivering that one end to end seamless execution or seamless end to end integrated service. And so modern GBS organizations are also then establishing teams of solution experts or solution innovation experts, which are already working then from an end to end solution perspective to the next you know, service to be added to the catalogue. And so modern GBS organizations are equipped with technology and digital capabilities to deliver actually digital as a service to the entire enterprise. So if we look at a modern GBS organization with so much technology residing there for GBS itself but also for the delivery of capabilities as a service to the rest of the enterprise, we see an ecosystem of solutions. We do see the middle part and there are on purpose, of course, no logos here with a list of I would say more holistic types of solutions. So enabling the wider GBS or you know, RPA type of tools etc, which apply, you know, you can build many use cases with them. And then there are specific solutions for the different end to end processes or functions that are being executed within GBS being of course high radius, the key one for the order to cash and from any wide perspective. We do as we do have an alliance and ecosystem management of all the alliance partners we work with also from a go-to-market perspective, as part fully integrated with our GBS proposition we see the same for the GBS organizations of our clients. GBS becomes the orchestrator of all the technology which is used there and the ones that from GBS is being delivered to the rest of the enterprise. Now, I think the key question is but is it even possible then wherever you are today, to leapfrog to the next wave of GBS? And the answer is yes, it is possible. And many organizations are really getting their act together to do that. But there are a few key learnings that you may want to consider and apply in your journey. And maybe Camille again over to you to share some experience from your side.
Yes, so So that’s, as I said, we, we try now to you know, somehow to skip the Phase One on the journey. Of course, it’s not an easy one is so go back to a strong foundation from the start. So you need to tell who you will be when you grew up, right and, and put like Microsoft as well. It’s a people it’s like mindset, to be transformative to know to just focus on operations and not coming to the top management with your ideas, and your ambitious to be and attracting the talent building those teams, that’s a really hard one as I said, I mean, there is very few people on the market who have, for example, skills to become order to cash global process owner or, as we call it, functional champion. Those are very hot jobs and many of the jobs in GBS when those people who understand that end to end technology process and people side, a very rare so it’s very good to grow the talent as well inside your company or make support to the internal people who already are there to grow to this level, it’s important to have the right people look on your GBS journey as well, more holistically, always try to see the forest, not only the trees, of course, on the daily base, we keep walking, keep doing things and often I see we just so busy with the daily work and smaller things that that we lose the big picture and empower the process owners or solution owners to come with that with the solutions. In our case, Maria mentioned supply chain, we moved the supply chain or the end to the coordination of the things into the GbS. And when COVID started, we had an enormous logistics crisis container crisis, we call it internally in the company to get right to transplantation on time everything, it was really nobody was prepared and then our functional owner and then GBS team came exactly with some agora to some changes into analytics, how we do ordering of containers negotiating tactics. And we really made a difference in the corporate crisis for the whole company, it’s cannot give an estimate of the financial impact, but it has been huge to make it happen. And so that those kinds of things, get the ideas to get the empowerment and like proof, you can do the business partnership to not only processing, of course, my team does as well. You know, invoicing, issuing orders and matching of accounts receivable all of this we do. But on the top we come with more business ideas and becoming partners, you can do both in parallel, we are a good example. Choose the right sourcing model. Many companies which are a little bit established, longer, they look into as well get the simpler processes as Maria said, outsource, they become a commodity and focus on them or put the best people at least and in those most value-added or on other side get something completely to specialists if it’s coming to you know, it’s a lot of pretty important projects. We going to outsource some more logistics even some supply chain pieces, as well as some tax and other things. Get the right partners on board. Do you want to give them more transactional things to somebody else or do you want to get more very technical specific things to somebody elsewhere you don’t have the right people and who might not grow the talent and soul. Another piece is to be involved at least if it is not part of your remit. MGBs a big part be at the table to orchestrate the technology ecosystem to have something to say and partner with them.
As Adidas example shows or our Japanese tobacco example shows it’s possible to have a big say and get you to know involved or even drive a lot of technology implementations through the GBS and strong partnership with it. And as well. The last seems to be very obvious balance ambition and change airport. And again and again. We underestimate how difficult it’s change things. And we will put way too many projects at the same time, way too many initiatives. And we don’t have income, this all will come together. What Maria mentioned about an end to end process, sometimes it’s distributed every function optimize or sub-function optimize their own piece. And there is no view of how this change will work out when we finish. And in our case, I learned by experience so everywhere to every project to every transition transformation we do with GBS partners, when combined with the commercial side, we always involve change agents. So So those are a lot of my personal learnings from last year. How we can get to the next week to GBS, of course, am I there on the to zero completely not yet. But my ambition is to be there in a couple of years from now. So we can meet at yours and see how it works.
Fantastic. Thank you so much, Kamila, and maybe just the closing notes, especially on the last point, you know, balance ambition and change efforts, how the companies prioritize because that’s also one of the big struggles, you know, what shall I do now? As you know, the first set of initiatives, it’s just chosen based on value. And again, the more you can go back to the business and show that what you have been able to deliver really enables them to grow brings value, I think the easier you make it for yourself being UGVs. And the ability really to combine the delivery of experience together with value is also what will stimulate appetite for more and more services to be delivered from the GBS by the GBS organization. With these. I think our presentation is over happy to get questions from inside. Yes.
Hi, thanks for that. Can you give some tangible examples of the difference between GBS one point so and the next wave breakthrough?
Yeah. So if you look back at GBS, 1.0, I mean, these are organizations that have been able to make already the first step from shared services, you know, being single function type of organizations, and which have been able also to evolve more from a governance perspective putting, you know all the different delivery centres on that one global governance model. However, I think from a more end to end process perspective, as well as from a customer-centricity perspective and technology, you know, a lot still needs to take place, but I would say a service management framework and global governance would be already the first examples of what differentiates a shared service from a GBS one dot O. And I would say anything that comes afterwards being approach, you know, to end services, digitization, digital service management capability. And customer centricity would be examples of, you know, what comes after the wall.
One of the challenges I have with all this is we spoke about people. I recently hired quite a few people with, you’re focusing on the kind of mindset that you’re talking about. So the creative data-savvy, business acumen, all these kinds of things. Now, I have these people on board and I say, Okay, here’s a bank statement and go and apply cash. And three months later, they think this job was not for me, and they walk out, how do you take the people with you on this journey.
So what I learned from my clients is that what really makes a lot of differences, the brands that your GBS organization has, make it attractive, make it a great place to work. And that’s what will attract, but also retain talents, as long as the GBS brand is not there. And with the brand, of course, I also would include the Empowerments out to act, drive change things. Yeah, that’s really what will make or break then the future of the talents, you bring on board.
And we had similar a situation, you know, that people came for this big order to cash transformation, and they were told to, to do semi-manual and magic of the invoices with their payments, I feel your pain. Exactly right. And what I’m doing, we involve them to be involved in their tool selection and be involved as well in their ideas, how they want to automate this work, which is not for me, and what they would like to do later. So they are actually in connection with their global process owner, if you don’t have any, I don’t know any of their people who can drive this change in the future. And, and listen to them and get them in at least a 10% of the time to work on the automation of the future, you know, matching of transactions and doing something different, it’s a huge morale boost for the team if they can spend some percentage of the time on such a project, or even concept or requirements, blueprint building, whatever it is.
So it goes back to the 7020 10 concepts we saw earlier, making it interesting for them to stay
in this fight of the brand, because you can promise in the branding, a lot of things. And actually, if you over-promise, the disappointment is even bigger. When they come and they do transactions. They leave even faster if you do too much branding. So you know, we’ll be honest that you’re not there yet, and involve them in some percentage to work on their own future.
Thanks, Kamila. Any more questions?
Just one final one, if I may. I was just wondering how do you view moving from process view? So in order to cash more to a value stream view, which is a plan to cash more looking at that end to end? In the new GBs?
Absolutely. Great question, Michael. Yeah, it’s, it’s something that I’ve seen very, very few companies considering and then trying to or planning to adopt. For many it would be, I think, a bridge too far. As we said earlier, you know, many companies are struggling even with a traditional true end to end order to cash. I don’t want to know you know what that means with an end to end customer or demand or forecasted cash? I think it is possible. Does it depend on the level of maturity of your GBS organization, but also on how solid is your GPO organization? how possible is within the enterprise drive really and then to whens or an edge to edge as a few organizations, you know, say these days, and I think it’s a method of skill set because also for the GP organization, I mean, who really has the skills and the experience to drive an edge to edge for customer cash or demand to cash rather than an order to cash knowing the struggle already on OTC I’m a big fan of it.
Really what’s getting in the way of most organizations from really embracing and sponsoring the twin piece? Not the edge to edge, but do the traditional water cash piece? Is it the CFOs? Is it GBS, GBS credibility?
I think for part of it, it’s really like more traditional, you know, functional mindsets. You know this is mine. I know what to do. And I know how to do and I don’t care what happens, you know, afterwards. But I think it’s also probably lack of incentives really, to look at, you know, cross-functional thinking and execution. And I’ve seen now few organizations also adopting some incentives, you know, to stimulate and enable that end to end from A to C, rather than from A to Zed thinking. Okay, thank you.