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
-
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.
-
Driving Business Efficiency through Divisions and Departments
In case of a multi-divisional organizational structure, there is one parent company, or head-office. And that parent owns smaller departments, under the same brand name. Dividing the firm, into several self-contained, autonomous units, provides the optimal level of centralization, in a company.
-
Matrix Organizational Structures
In recent times the two types of organization structures which have evolved are the matrix organization and the network organization. Rigid departmentalization is being complemented by the use of teams that cross over traditional departmental lines.
-
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 Legal Entities Concept
Modern business organizations operate globally and leverage a large number of registered legal entities, and operate through complex matrix relationships. To stay competitive in the current global business environment, they must often develop highly diverse and complex organizational structures that cross international borders. Learn more about Legal Entities and their importance for businesses.
-
Internally, an organization can be structured in many different ways, depending on their objectives. The internal structure of an organization will determine the modes in which it operates and performs. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual.
-
Network Organizational Structures
The newest, and most divergent, team structure is commonly known as a Network Structure (also called "lean" structure) has central, core functions that operate the strategic business. It outsources or subcontracts non-core functions. When an organization needs to control other organizations or agencies whose participation is essential to the success, a network structure is organized.
-
Different Types of Organizational Structures
Modern business organizations run multiple product and service lines, operate globally, leverage large number of registered legal entities, and operate through complex matrix relationships. To stay competitive in the current global business environment, they must often develop highly diverse and complex organizational structures that cross international borders.
-
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.
-
A legal entity is an artificial person having separate legal standing in the eyes of law. A Legal entity represents a legal company for which you prepare fiscal or tax reports. A legal entity is any company or organization that has legal rights and responsibilities, including tax filings.
