Navigating GBS Disruption: Key Insights
Posted by Naomi Secor on June 5, 2024
In the next decade, Global Business Services (GBS) will undergo a profound transformation. Previously dominated by transactional tasks in finance, HR, procurement, and IT, GBS is evolving into a sophisticated arena driven by GenAI and knowledge services. This shift promises not just cost savings but also a leap in business value creation and strategic partnerships. A recent study by SSON Research & Analytics explored how various roles within the GBS ecosystem feel disrupted due to a variety of influencing factors.
The Age of Disruption
Considering influences such as the business environment in the locations where respondents operate, evolving technologies, political and economic pressures, and the expectations of corporate boards, our research found that 87% of GBS respondents feel disrupted, with nearly 1/3 perceiving the potential for severe disruption. While examining the full ecosystem, we see similar impacts across Business Process Outsourcing (BPO) providers and technology players. The era of disruption has arrived, and GBS must adapt or risk becoming obsolete.
Anxiety Levels Compared to a Year Ago
When asked whether GBS professionals today are more or less anxious regarding the model’s ability to withstand disruption compared to a year ago, the data is interesting. It’s basically split in half: 51% are more anxious about GBS sustainability today, while 49% are less anxious. The BPO and technology providers show even greater anxiety around this, as might be expected given the accelerating pace of change and their role as suppliers to GBS.
“The era of disruption has arrived, and GBS must adapt
or risk becoming obsolete.”
One contributing factor is expectations from the corporate board, some unanticipated and others accelerated, such as the role GBS is expected to play in Environmental, Social, and Governance (ESG) initiatives.
Workplace Issues: The Unresolved Challenge
Despite the focus on the Future of Work (FOW) for many years, workplace issues are still very present. Two-thirds of GBS respondents feel that workforce expectations around remote work have the potential to severely disrupt operations, and we see an even higher concern from technology providers. Adapting to evolving workplace dynamics will be crucial for GBS to thrive in the face of disruption.
Scarce Talent: A Looming Crisis
When it comes to “scarce talent”, all GBS are concerned about simply not having the people they need to execute their strategies. For the quarter that is apparently not so concerned, this could reflect the expectation of technology picking up much of the current workload. We see much higher concerns on the BPO front (again, as expected from an FTE-based model) and technology providers. Addressing the talent shortage will be a key challenge for GBS in the era of disruption.
GBS Skills of the Future
Business transformation, commercial acumen, mastery of digitization/AI … all these must come together in a team that beautifully blends technical and soft skills. Striking a balance is a major concern for GBS: 85% believe that finding the future skills sets required presents severe disruption. We see the same concerns but at even higher levels across BPOs and tech providers.
"GBS organizations need to manage and curate the explosion of data, leveraging AI, Machine Learning, and Data Mining tools to remain competitive and relevant." — Richard Dobbs, GBS Industry Expert
"Beyond technical skills like Prompt Engineering and Data Interrogation, GBS will need Business Expertise, Commercial Acumen, Change Management, Consultative Skills, and Stakeholder Management to move up the value curve." — Viral Chhaya, GBS Industry Expert
Will the GBS Model Prevail? Of Course, But……
The GBS model will prevail, but it will need to evolve (and here we see the greatest consistency across the various stakeholders). While the exact direction is uncertain, we can be sure that digital transformation, a more creative approach to workforce management, and a more intimate connection with the business will play a major part. The more GBS can integrate itself into and across the business, the more it becomes part of the fabric, the more the business could potentially gain a competitive advantage.
The Future Unfolded: Thriving in Disruption
In the coming decade, GBS will emerge as a critical engine of business transformation, moving away from cost-centric models to value-driven frameworks. By embracing automation, enhancing knowledge services, and fostering strategic partnerships, GBS will deliver unprecedented business value. However, the journey will require a proactive approach to skill development, technological adoption, and risk management.
"The big change for GBS in the next 10 years will be the automation of traditional scopes like finance, HR, procurement, and IT due to GenAI. Simultaneously, there will be growth in offshore Knowledge Services (Marketing, Consulting, Engineering, Data & Analytics). This shift will transform GBS from transactional processes to knowledge teams, providing companies with advantages beyond cost savings, tapping into knowledge and scalability benefits." — Robert Weltevreden, GBS Industry Expert
The future of GBS is not just about surviving the shift; it’s about thriving in a new era of business excellence amidst disruption. The evolution will transform GBS into not just a support function but a cornerstone of strategic business success.
SSON Research & Analytics will be presenting survey highlights from its GBS Disruption Study on July 25, 2024. Please join us and gain insights into navigating the age of disruption!
Register: https://www.sson-analytics.com/global-business-services/webinars/gbs-disruption-a-ten-year-outlook
Stay in touch