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
You May Also Like
-
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.
-
GL - Journal Posting and Balances
In this tutorial, we will explain what we mean by the posting process and what are the major differences between the posting process in the manual accounting system compared to the automated accounting systems and ERPs. This article also explains how posting also happens in subsidiary ledgers and subsequently that information is again posted to the general ledger.
-
Five Core General Ledger Accounts
Typically, the accounts of the general ledger are sorted into five categories within a chart of accounts. Double-entry accounting uses five and only five account types to record all the transactions that can possibly be recorded in any accounting system. These five accounts are the basis for any accounting system, whether it is a manual or an automated accounting system. These five categories are assets, liabilities, owner's equity, revenue, and expenses.
-
In some of the ERP tools, there are more than 12 accounting periods in a financial year. This article discusses the concept of accounting calendar and accounting periods. Learn why different companies have different accounting periods. Understand some of the commonly used periods across different organizations and the definition & use of an adjustment period.
-
What Is a General Ledger? General Ledger (also known in accounting as the GL or the Nominal Ledger) is at the heart of any accounting system. A general ledger is the master set of accounts that summarize all transactions occurring within an entity. Ledger is the skillful grouping and presentation of the Journal entries. Learn the accounting fundamentals, general ledger process, and general ledger flow.
-
In this article, we explain some commonly used subsidiary ledgers like accounts receivable subsidiary ledger, accounts payable subsidiary ledger or creditors' subsidiary ledger, inventory subsidiary ledger, fixed assets subsidiary ledger, projects subsidiary ledger, work in progress subsidiary ledger, and cash receipts or payments subsidiary ledger.
-
An allocation is a process of shifting overhead costs to cost objects, using a rational basis of allotment. Understand what is the meaning of allocation in the accounting context and how defining mass allocations simplifies the process of allocating overheads to various accounting segments. Explore types of allocations and see some practical examples of mass allocations in real business situations.
-
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.
-
McKinsey 7S Framework is most often used as an organizational analysis tool to assess and monitor changes in the internal situation of an organization. The model is based on the theory that, for an organization to perform well, seven elements need to be aligned and mutually reinforcing.
-
Multitude of these legal and operational structures clubbed with accounting and reporting needs give rise to many reporting dimensions at which the organization may want to track or report its operational metrics and financial results. This is where business dimensions play a vital role.
