"Back to the future” of Business Services

Let’s explore journey of Business Services, from Outsourcing and Insourcing to the rise of Hybrid models. What is the potential that the partnership with technology unlocks for business growth?

It took me some time to fully understand the title of this movie (Back to the future). How can we go back to the future if we have not been there yet, right? What we can state for sure is that our past forms our future in an excessively big part.

Before we will be distracted by contemplations around time relevance, paradoxes and black holes with Stephen Hawking or we would desperately like to decide if the cat is still alive or not with Schrödinger, let’s start by the past of Business Services.

Some time ago someone smart realized that it would be the best for Business if they could focus only on their core activities and leave everything aside to be managed by specialists in their matters. That is how through the years of evolution we arrived at the moment where we have Shared Service Centres and Global Business Services in our wide Business picture.

An enormous group of specialists in Insourcing and Outsourcing is managing our side operations for core businesses.

For some companies, this core would be production and therefore they need a helping hand with finance, controlling, legal, marketing or procurement. For other the core would present pure finance related processed therefore they would rather externalize HR, legal, marketing, administration. Either way our Business Service Sector grows and changes at the same time. This is how the evolution goes…

Choices, choices…

So, what are the current models we observe? Is it only Insourcing and Outsourcing in our menu to choose? Or maybe there is a completely new alternative on the horizon?

"At the beginning it was chaos"... Well not so enormous to lead us to Big Bang but indeed companies were struggling which road to take. Lot of analysis, benchmarking, and discussions where to go, what would be the best solution.

Outsourcing (Business Process Out-sourcing – BPO) puts the pressure on costs, effectiveness, and savings. It is less interested in the harmonization, standardization, company history or culture. Service provider is tight with contract to fulfil really wide and detailed Key Performance Indicators – KPI's. Business expects results and high performance within smooth and straight processes management. Here we talk about pure business process execution without deep dive into improvements and root causes of potential inefficiencies.

Insourcing (Shared Service Centre – SSC and Global Business Services – GBS) is also a service provider for core business, but this time inside the same company. Focusses more on growing as a Partner. And no one can grow without finding the right path together. This road needs to be aside with business, and definitely in the same direction. Shared Service Centre or Global Business Services as part of the company, fully identifies with the organization and shares the same values. Business transformation lays in their own interest to have properly harmonized and standardized processes.

You could still ask: What do we do then? Should we pick up only one direction or we have multichoice? What is the perfect middle?

New is coming or has already come?

Why not to merge those two approaches and have a Hybrid?

We sign contract with Business Process Outsourcing to manage our base and straight forward operational transactions and in parallel we create Shared Service Centre / Global Business Services (or Centre of Excellence) to work Together. Both are working side by side.

Seems like quite logic solution, right? We can observe that this road is becoming more common every day. There, where we need pure effectiveness, we delegate it to the 3rd party provider and at the same time we trust potential business transformation of processes to our internal counterparty – Global Business Services. Those hybrids works already in our real life, and it is no more only a wishful thinking from a fantasy world. This is not only coming, this is already here.

Everyone knows, that at the end, one of the most crucial factors for every decision is money. When we will see the profits? Extremely important fact, which unfortunately often is overlooked, is that while implementing GBS in the organization, we cannot expect spectacular results within the first budget review. To see an economic impact, we will wait between 3 to 5 years, but it is really worth it.

Partnership is always better

When we talk about Insourcing and creation of Shared Service Centre / Global Business Services, we need to be aware that this organisation should become a real Business Partner and not only a service provider.

Why it is so important? Because the goal is to entrust to Global Business Services operational processes and business transformation paired with standardization and harmonization. We "hire" Shared Service Centre with highly skilled specialists to guide us thru this path. Core organization still holds the wheel and shows direction. GBS should provide the know-how. Core business need to entrust specialist they hire to guide them. We all know this saying: "We do not hire specialists to tell them what to do, we hire them to teach us how to do it."

On the other hand, Global Business Services needs to proof it’s worth to the business first. Start with small steps if the core organization is not fully convinced by the GBS strategy. Once insourcing provides tangible results, it gains trust and business is willing to extend potential additional scope.

With GBS approach all processes stay in one, global hands and can be easily improved. Within this model harmonization and standardization becomes easier and smoother. Having the proper empowerment GBS can bring invaluable contribution to the development of the whole company which should never be underestimated. Sometimes the hardest part is to handover some responsibility and decision-making to Business Services and let them guide us.

As a result, we have not just a simple service provider, but a real partner in our business with the same values, goals and of course: future.

Fear of robots

What about the entire world currently rushing towards technology automation and digitalization? It is another crucial factor impacting our reality. Technology enters every aspect of our life and we

cannot stop it. We are getting scared that technology will replace us or even worse… Our job is to embrace this global rush and think how to use it in a smart way.

Does the technology give us a helping hand? Definitely YES! When used for basic, time consuming and boring activities. Will the technology, automation and digitalization replace our creativity? Definitely NO! Human being is unpredictable and full of new inventions. Even our potentially fully abstract ideas can transform into most wanted and widely applied solutions. Machines are “build” only with “0” and “1” so how much creativity we can expect from that? Let us give away those boring and repetitive duties to robots and unleash human potential. We could focus on more exciting inventions.

Properly setup automation can easily relieve us. We can use this opportunity to think about growth of our business, expanding new markets or creating new, splendid partnerships. Sky is the limit.

"One small step for man, one giant leap for mankind"

Numerous conferences and networking sessions gives us perfect space to get to know our current trends in business service sector, to check how others are doing it and of course answer the main question: Does it really works?

We all know that there can be a long road from theory to reality, however there are organization already implementing some or all of the presented approaches. We just need to find a courage to take this first step and the rest will follow. Going deeper in the process improvements we cannot omit the part of GBS deliberations which will naturally lead us to technology topic and basic robots’ implementation. Starting with one automation we will see how much efficiency and time saving it can give us. This pure economic aspect and luxury of less workload can easily make us addict of technology. Are we not already to some extent addicted in our private life? Business is no different.

Authors:

Aleksandra Pudlarz, Program Manager & Senior Consultant, Adaptive SAG

Krystyna Zakrzewska, Program Manager & Senior Consultant, Adaptive SAG

This article comes from magazine:
FOCUS ON Business #12 September-October (5/2023)