Global Business Services (GBS) Model

Global Business Services (GBS) Model

Global business services (GBS) is an integrated, scalable, and mature version of the shared services model. Global Business Services Model is a result of shared services maturing and evolving on a global scale. It is represented by the growth and maturity of the Shared services to better service the global corporations they support.

Global business services (GBS) is an integrated, scalable, and mature version of the shared services model. Global Business Services Model is a result of shared services maturing and evolving on a global scale. It is represented by the growth and maturity of the Shared services to better service the global corporations they support.  Global Business Services framework adds value to the shared services model by taking the model beyond labor arbitrage. This model adds consistent approaches to global services strategy formation, transition, and governance resulting in improved collaboration across the entire enterprise ecosystem. GBS provides services beyond transactional functions and provides value to the organization by enabling standardization, scalability, technology, well defined and optimized processes and business analytics. Under this model the entire organization collectively start leveraging global business services to accelerate attainment of corporate strategies.

General Electric, Bank of America, American Express are some examples who have already established Global Business Services model for their entire finance functions where a Global Operations Finance Team provides record to report and statutory and tax compliance services to all the businesses under its umbrella.

Main Features of GBS model:

  • Integrated compilation of service offerings for multiple support functions within a company
  • Global in nature with respect to both delivery centers and customers
  • Service provides can be both internal and/or external
  • Service providers are managed centrally by GBS organization
  • Service offerings by GBS are standardized and follow process model with defined roles and responsibilities and handshakes at each interaction
  • Global process ownership
  • Integrated application suite(s)/Information Systems across the enterprise with well-defined processes and best practices
  • Virtual centers of expertise to build and disseminate subject-matter expertise
  • Defined and well tracked operational metrics to measure speed, quality and costs
  • Standardization of processes and practices that result in the GBS organization being run like an independent entity
  • Ability to take competitive advantage of cost arbitrage and third party expertise
  • Mix of service delivery models - Captive offshore; In-house shared services centers; outsourced delivery models; “hybrids”

Value drivers of GBS Model

  • Cost savings through economies of scale and labor arbitrage
  • Simplification and standardization of processes
  • Advanced analytics and visibility across different structures (legal/operational) of the enterprise
  • Ability to hire and retain global talent
  • Skill arbitrage: value derived from access to higher-skilled labor across globe
  • Ability to work in shifts leveraging the time zone differences across globe
  • Ability to deploy advanced tools and technology
  • Ability to deliver scalability to processes and functions

Functions that can be shared across business units

  • Sourcing and Procurement
  • Buy to Pay – Accounts Payable
  • Invoice to Cash – Accounts Receivable
  • Payroll Management
  • Record to Report – General Ledger
  • Fixed Assets Management
  • Statutory Reporting and Tax Reporting
  • Human Resources
  • Information Technology
  • Vendor Management
  • Customer Management
  • Master Data Maintenance

All the models described above represent matrix structures. However, Matrix Structures can become overly complex, effectively having to uphold two hierarchies, with potential tensions between the two.

Related Links

Creation Date Thursday, 29 December 2022 Hits 1649

You May Also Like

  • GL - Inquiry & Drilldown

    GL - Inquiry & Drilldown

    An account inquiry is a review of any type of financial account, whether it be a depository account or a credit account. In this tutorial, you learn what we mean by drill through functionality in the context of the general ledger system. We will explain the concept of drill-down and how it enables users to perform account and transaction inquiry at a granular level and the benefits of using this functionality.

  • Functional Organizational Structures

    Functional Organizational Structures

    A functional organizational structure is a structure that consists of activities such as coordination, supervision and task allocation. The organizational structure determines how the organization performs or operates. The term organizational structure refers to how the people in an organization are grouped and to whom they report.

  • Operational Structures in Business

    Operational Structures in Business

    Large organizations grow through subsidiaries, joint ventures, multiple divisions and departments along with mergers and acquisitions. Leaders of these organizations typically want to analyze the business based on operational structures such as industries, functions, consumers, or product lines.

  • Company Form

    Company Form

    A Company (also called corporation) may be understood as an association of persons in which money is contributed by them, to carry on some business or undertaking. Persons who contribute the money are called the shareholders or the members of the company. A corporation is an artificial being, invisible, intangible and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it.

  • Organizational Design

    Organizational Design

    An organizational design is the process by which a company defines and manages elements of structure so that an organization can control the activities necessary to achieve its goals. Good organizational structure and design helps improve communication, increase productivity, and inspire innovation. Organizational structure is the formal system of task and activity relationships to clearly define how people coordinate their actions and use resources to achieve organizational goals.

  • Introduction to Organizational Structures

    Introduction to Organizational Structures

    Organizations are systems of some interacting components. Levitt (1965) sets out a basic framework for understanding organizations. This framework emphasizes four major internal components such as: task, people, technology, and structure. The task of the organization is its mission, purpose or goal for existence. The people are the human resources of the organization.

  • GL - Unearned / Deferred Revenue

    GL - Unearned / Deferred Revenue

    Unearned revenue is a liability to the entity until the revenue is earned. Learn the concept of unearned revenue, also known as deferred revenue. Gain an understanding of business scenarios in which organizations need to park their receipts as unearned. Look at some real-life examples and understand the accounting treatment for unearned revenue. Finally, look at how the concept is treated in the ERPs or automated systems.

  • The Accounting Process

    The Accounting Process

    In this article we will focus on and understand the accounting process which enables the accounting system to provide the necessary information to business stakeholders. We will deep dive into each of the steps of accounting and will understand how to identify accounting transactions and the process for recording accounting information and transactions.

  • What are Management Entities?

    What are Management Entities?

    In this article we will discuss various types of "Management Entities". Various types of operational units, are created by management, to effectively run, manage and control their business. Different types of functional units, and divisional units, are widely used across industry.

  • Hierarchical Organization Structures

    Hierarchical Organization Structures

    Hierarchical structure is typical for larger businesses and organizations. It relies on having different levels of authority with a chain of command connecting multiple management levels within the organization. The decision-making process is typically formal and flows from the top down.

Explore Our Free Training Articles or
Sign Up to Start With Our eLearning Courses

Subscribe to Our Newsletter


© 2023 TechnoFunc, All Rights Reserved