Global Business Service (GBS) centers centralize operational tasks across departments and deliver insightful decision-making opportunities for businesses. This means less time on mundane tasks and more time innovating with actionable insights.
By Russ Banham
Perspectives magazine
The old corporate “back office,” created to handle mundane manual processing tasks, is now front and center in a growing number of companies.
Large corporations like software provider Salesforce, Swedish multinational conglomerate ABB Group, and Japanese pharmaceutical company Takeda have developed a global business service (GBS) center as today’s modern back office. GBS centers offer operational cost benefits through enterprise-based automated data processing capabilities, and—thanks to the use of technologies like advanced analytics, machine learning, and artificial intelligence (AI)—more insightful decision-making opportunities.
A GBS center is a centralized processing unit, in which the typical transactional tasks performed by administrative and support personnel in HR, finance, procurement, IT, and other functions occur on an enterprise basis. Previously, tasks like accounting, record maintenance, settlements, and clearances, among other administrative responsibilities, were processed in each function.
Such activities were expensive, given the cost of manual processing and the volume of people in each function executing the tasks. Three things have changed this paradigm: By digitizing all the transactional data, automating the various processing tasks in each function, and consolidating all this work in a centralized GBS center, companies have achieved dramatically lower labor costs—”in the double-digit range,” says Martijn Geerling, head of the finance advisory program, Europe, for The Hackett Group.
But costs are not the only reason to invest in forming a GBS center. “What is most exciting is the ability to gather all that cross-functional data on an enterprise basis and use predictive analytics and machine learning algorithms to unearth insights for decision-making purposes,” Geerling explains.
By identifying unique patterns and anomalies in this enterprise data, companies are able to generate “competitively differentiating business intelligence,” he adds.
Other GBS experts agree. “A GBS center initially was seen as a robust way to generate cost savings by leveraging the most economical, low-cost work processes,” says Kort Syverson, principal and global business services leader at Deloitte. “That’s a nice, one-time benefit. The truly sustainable value of a GBS center is as a platform to analyze data and optimize business decisions.”
Partnering for Transformation
Salesforce’s GBS center is a case in point. The framework for the cloud-based software provider’s GBS center was built eight years ago by Sam Barani, who was hired by the company’s then-CFO to develop and lead the organization. At the time, Salesforce generated roughly $4 billion in annual revenue and tallied some 8,000 employees, he says.
“My remit was to deliver operational excellence by delivering processing services to our functions at scale,” Barani says, head of global business services and transformation at Salesforce. “The GBS center was a one-man organization—me.”
Barani launched the GBS center initially for the processing tasks of a single function: finance. Administrative responsibilities in other functions like HR, procurement, and customer-facing support services soon followed. Gradually, additional functions like sales, marketing, and IT also migrated to the GBS center, followed by legal and compliance.
Aside from the labor savings, the different functions were given the opportunity to use Salesforce’s cloud computing platform for their analytics needs. At first, this use was on a function-by-function basis. But as time progressed, more data was digitized and more processes were automated.
During the same period, cognitive computing tools like advanced analytics, machine learning, and AI became more sophisticated, allowing for data to be analyzed on a cross-functional enterprise basis. This evolution provided extraordinary opportunities to turn data into information, guiding rapid and accurate fact-driven business decisions across Salesforce.
“We had what we now consider to be a world-class GBS center, an enterprise organization bringing advanced analytics to all our business colleagues, becoming a true strategic partner in solving their problems,” Barani says.
The cloud-computing analytics solutions for Salesforce employees and customers include Tableau CRM, an AI platform giving Salesforce employees the opportunity to analyze large, complex data elements, generating predictive insights, and Quip, enabling teams to collaborate around documents to improve their productivity. “We evolved to a point to where we were viewed within Salesforce as the transformation organization,” Barani says.
In 2019, the company capitalized on this perception by forming an Office of Transformation within the GBS center. At present, the GBS center provides 10 transformational services across the enterprise, including intelligent automation, business intelligence, quality assurance, change management, workforce organizational design, and process excellence, among others, says Barani.
In its early phases, the corporate development team at the GBS center had to reach out to functional managers and perform a “hard sell,” he notes, “asking questions like, Have you heard about us and what we can do? Today, it’s the opposite. There is simply so much demand for process improvement and analytical expertise, we have to vigorously prioritize who gets served first.”
Having recruited more than 2,000 people to work at the GBS, Barani no longer is a one-man organization. In succeeding years, Salesforce itself grew from 8,000 employees to 54,000 people today, and its revenues have quintupled to $21 billion, he noted. Recently, the company was invited to join the venerable Dow Jones Industrial Average, displacing ExxonMobil.
Liberating Unfettered Business Opportunities
Takeda and ABB Group, a Fortune 500 Swedish conglomerate in the heavy electrical equipment, automation, and robotics fields, are deriving a similar range of benefits from their GBS centers.
At Takeda, one of the world’s largest biopharmaceutical companies, Takeda Business Solutions (the name of its GBS center) is a primary pillar of Takeda’s finance, procurement, and HR operating model. The GBS center proactively engages with Takeda’s internal stakeholders, with the goal of understanding and anticipating their needs. These needs are then met through the latest technological capabilities in AI, robotics, automation, design thinking, and analytics, says Sanjay Patel, senior vice president and global head of Takeda Business Solutions.
As at Salesforce, the use of advanced analytics by the different functions in Takeda Business Solutions is a value-added strategic benefit. Cloud-based digital solutions include UiPath, a robotics-as-a-service process automation tool that reduced the time involved in repetitive transactional processing by thousands of hours, and BlackLine, a finance and accounting automation software tool that processes journal entries, reconciles accounts and assists a virtual close of the books. “BlackLine is one of the digital solutions helping us close the books during a period of virtual and remote work conditions, while giving us insights into our real-time financial data for decision-making purposes,” Patel says.
ABB Group’s GBS center also is offering actionable business insights to decision-makers across the giant multinational conglomerate, which counts more than 140,000 employees worldwide.
“We’ve gone from a situation where the GBS pushed data analytics and analytical reports to internal stakeholders to where they can now pull this data, using machine learning algorithms, to generate needed process improvements and more insightful decisions,” says Luca Condosta, ABB Group finance master data manager.
He cites the GBS center’s particular value to the company’s finance function, which is moving toward what Condosta calls “touchless accounting.”
“We’re getting close to being able to free up our accountants from doing typical manual tasks like ensuring that every item in a ledger is properly accounted,” he says. “With automation software doing much of this work, the accountants can put their time instead to using technologies like data mining and machine learning algorithms to identify patterns in journal entries that may suggest a key customer is experiencing financial difficulties or indicate a brewing accounting fraud issue.”
He adds, “Today’s younger-generation accountants would much rather provide value-added strategic services than spend their time going through invoices on a screen.”
Down the line, as data processing and cognitive computing technologies continue to evolve, GBS centers will evolve with them. “Within five years, most GBS centers will be a one-stop shopping experience along the lines of an internal contact center,” says Geerling from The Hackett Group. “Employees across the enterprise will be able to instantly access whatever data and analytics they need to solve a problem, using one of the many cloud-based cognitive computing tools available on the platform.”
Takeda Business Solutions is close on the heels of this next iteration. “By understanding each function’s challenges and priorities,” says Patel, “we can rapidly leverage the right technologies in partnership with our IT organization to proactively anticipate and solve their problems, instead of just reacting to them.”
Russ Banham is a Pulitzer-nominated financial journalist and best-selling author.