The idea of using shared services to connect companies in multiple time zones may have sounded utterly foreign and impractical only two decades ago. However, that very concept is now a mainstream practice in the global corporate world. Thousands of businesses around the globe rely on shared or outsourced services to improve their processes and optimize productivity. But that’s not all. Some leading brands have adopted an even more innovative approach to the concept of shared services. Instead of independently operating multiple shared services hubs and managing outsourcing vendors, these companies have implemented global business services, a step up from the traditional shared services model.
Here’s everything you need to know about global business services and why it’s essential for every modern enterprise.
What Are Global Business Services?
Global business services, commonly abbreviated as GBS, refers to centralized service delivery models designed to serve numerous business units and improve service delivery for the participating enterprises.
Global business services typically encompass shared services called captives. They also include outsourcing centers complete with vendors and centers of excellence (COEs).
Why Are GBS Services Essential For Modern Enterprises?
- Cutting Operational Costs
Maintaining numerous shared service hubs can prove costly for your business. The operational costs are even higher if your company manages a considerable number of vendors in each center.
Fortunately, you can avoid these unnecessary operational expenses by upgrading to global business services.
GBS pulls together multiple brands that outsource various products and services. With this model, a company doesn’t have to procure every business equipment or maintain a permanent workforce if its revenue doesn’t allow it. It could simply outsource such services from within the ecosystem.
- Managing Cross-Border Risks
Granted, running a multinational company can provide significant benefits. It notably lets you ramp up your revenues by targeting a wider market. Besides, operating an overseas business confers a sense of pride and boosts your brand’s appeal.
However, there are several risks to contend with. One such pitfall is delayed shipments due to unforeseen supply chain disruptions caused by factors like customs inspections or natural disasters.
This is another area where global business services may come in handy.
GBS lets you manage supply chain threats more effectively to avoid losing high-value clients. Whenever your regular suppliers are indisposed, you can enlist the services of other businesses within the GBS ecosystem.
- Increasing Revenue Projections
We’ve just hinted at revenue increase as one of the perks of using global business services. Service-based companies can particularly rely on this model to increase their profits.
For instance, it’s relatively easy to set up an immigration consultancy firm in any country. Success in this sector can come even sooner if your company operates within a global business services framework.
With GBS, you can offer centralized services to clients spread across the world without necessarily maintaining physical places of business in each country.
GBS services’ ability to minimize supply chain risks makes them even more attractive to multinationals seeking to raise their revenue projections.
- Navigating Legal and Policy Frameworks
Setting up a place of business in a foreign country often requires navigating a complex maze of legal and policy frameworks.
For starters, there are trade embargoes to familiarize yourself with. You’ll also need to understand the types of licenses and insurance applicable to your business type. And if you’ll be traveling across each country regularly, information on visa waivers will come in handy.
Global business services allow you to navigate all these with remarkable ease.
Operating within a GBS ecosystem makes it easy to understand the customs laws applicable in different countries. You’ll be up to date on cross-border legal compliance, international insurance regulations, customs handling, and local market dynamics.
Mastering these critical aspects can avoid running into unforeseen pitfalls when outsourcing or supplying products to international markets.
- Fostering Partnerships and Collaborations
Success in the corporate world relies heavily on collaborations. Companies must consistently forge partnerships to build meaningful networks and get ahead of common competitors.
Global business services provide the ideal environment for creating lasting collaborations. This model interconnects the participating businesses by allowing them to share various aspects of their services.
More importantly, companies in the GBS ecosystem can leverage their individual strengths to achieve shared objectives. For instance, your business can rely on a cross-border partner to target overseas markets that would ordinarily be out of reach.
- Enhancing Resilience for Optimal Growth
Global business services provide all the key ingredients that startups require to achieve unbounded growth. Those include agility, flexibility, and seamless collaboration.
Embracing the GBS approach addresses various challenges associated with multinational collapse, including trade restrictions and unfavorable variances in international regulations. Availing GBS from a centralized hub can also help nurture your brand without necessarily setting up physical offices in every international market that you supply to.
More importantly, the GBS model lets you build more resilience. Using this approach, you can predict risks and trends long before they happen.
By anticipating risks and trends, your company can adapt to emerging technologies to stay ahead of the competition. Remember that preempting business pitfalls is the most efficient way to address them.
Final Word on Global Business Services
Global business services have revolutionized how companies avail their offerings to cross-border markets. This model reduces the operational costs associated with maintaining multiple shared locations and vendors, potentially increasing revenue generation.
GBS also fosters collaboration among participating companies and helps build resilience. It’s certainly a concept worth exploring for every future-thinking, customer-centric company.
