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 1162

You May Also Like

  • What is a General Ledger?

    What is a General Ledger?

    The purpose of the general ledger is to sort transaction information into meaningful categories and charts of accounts. The general ledger sorts information from the general journal and converts them into account balances and this process converts data into information, necessary to prepare financial statements. This article explains what a general ledger is and some of its major functionalities.

  • Business Metrics for Management Reporting

    Business Metrics for Management Reporting

    Business metric is a quantifiable measure of an organization's behavior, activities, and performance used to access the status of the targeted business process. Traditionally many metrics were finance based, inwardly focusing on the performance of the organization.  Businesses can use various metrics available to monitor, evaluate, and improve their performance across any of the focus areas like sales, sourcing, IT or operations.

  • Defining Internal Structures

    Defining Internal Structures

    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.

  • Shared Services Model

    Shared Services Model

    Shared Services is the centralization of service offering at one part of an organization or group sharing funding and resourcing. The providing department effectively becomes an internal service provider. The key is the idea of 'sharing' within an organization or group. 

  • Trial Balance in General Ledger

    Trial Balance in General Ledger

    One of the greatest benefits of using a double-entry accounting system is the capability to generate a trial balance. What do we mean by trial balance? As the name suggests a trial balance is a report that must have its debits equals to credits. Understand the importance of trial balance and why it is balanced. Learn how it is prepared and in which format.

  • Concept of Legal Entity

    Concept of Legal Entity

    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.

  •  Network Organizational Structures

    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.

  • GL - Reversing Journal Entry

    GL - Reversing Journal Entry

    Reversing Journals are special journals that are automatically reversed after a specified date. A reversing entry is a journal entry to “undo” an adjusting entry. When you create a reversing journal entry it nullifies the accounting impact of the original entry. Reversing entries make it easier to record subsequent transactions by eliminating the need for certain compound entries. See an example of reversing journal entry!

  • 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.

  • 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.

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

Subscribe to Our Newsletter


© 2023 TechnoFunc, All Rights Reserved