The GBS Revolution: Why Productivity is the Hidden Key to Unstoppable Value Generation
Table of contents
- 1. GBS Organizations: Looking into the future
- 2. How are GBS Organizations Boosting Productivity?
- 3. GBS Organizations Need to Adopt a Sustainable Approach
- 4. Visibility into Workforce Data
- 5. Targeted Interventions to Enhance Performance
- 6. Change Management Strategies
- 7. Improving Productivity to Manage Business Evolution
Economic uncertainty and fluctuating market demands have made leaders and organizations sit up and re-evaluate their corporate strategies. The focus is now on embracing new technologies to improve the productivity, flexibility, and agility of their operations. This new way of doing business has seen the increased use of shared services and Global Business Services (GBS).
While third-party services have always been significant to business success, in recent years, their role in driving productivity for larger organizations has undergone an evolution, and now they are viewed through a wider, more strategic lens. From being relied upon for cost savings, GBS organizations have emerged as strategic partners, and their capabilities now include offering sustainable value creation across multiple dimensions.
GBS Organizations: Looking into the future
If you consider the GBS growth trajectory, you will observe the service went from focusing on efficiency to outcomes to innovation and now value creation. The service might have begun by performing back-end tasks discreetly, but today this digitally empowered business arm takes end-to-end ownership of projects.
As GBS organizations evolve towards enhanced value creation, they face a variety of external factors that influence their trajectory.
These changes mean there is greater emphasis on productivity as a critical factor in meeting the expectations set by the larger organizations. If they wish to stay relevant and resilient, they must deliver on innovation and take the initiative in this uncertain business environment while also remaining committed to providing operational efficiencies. Furthermore, with the rapid advancement of technology, particularly AI, customers are demanding greater value from service providers.
Here’s a look at 5 key macroeconomic factors that are driving the need for enhanced productivity:
- 1. Interest Rates & Inflation: 5.9% Global headline inflation forecast for 2024
- 2. Geopolitical Risks: 69% of Chief Economists predict rising geoeconomic risks in 2024
- 3. Worldwide Political Elections: 70+ countries to face government elections in 2024
- 4. Rapid Advancements in AI: 60% of executives expect major Generative AI industry disruption in 5 years
- 5. Supply Chain Volatility: 169+ countries hit by chip shortage, disrupting Supply Chains
What does this mean for GBS organizations looking to scale up?
How are GBS Organizations Boosting Productivity?
This changing world is presenting exciting opportunities for businesses, impelling them to seek out strategies to adopt and integrate these technologies in their operations to boost productivity.
A survey by Zinnov reveals that 53% of GBS leaders recognize the importance of improving productivity as their most critical strategy if they wish to remain relevant, an essential factor for maintaining market competitiveness.
However, this is easier said than done. Boosting productivity presents its own set of challenges and obstacles, mainly, limited access to reliable data. A survey of over 120 GBS leaders across India shows that 95% of these organizations have already put in place productivity measurement mechanisms. Where they face issues is the reliability and comprehensiveness of data for effective decision-making.
Here’s a quick look at the challenges faced by GBS organizations in making decisions to improve productivity:
- Limited visibility to reliable data and insights – 52%
- Limited information on industry best-in-class – 45%
- Change Management – 34%
- Identifying critical performance metrics – 26%
- Budget Constraints – 25%
While data visibility is a critical aspect, enhancing productivity involves multiple strategic considerations. One proven approach to achieving that is by prioritizing talent management. GBS organizations understand that in order to maintain operational excellence and foster ongoing transformation, hiring and retaining the right talent is the most critical.
Having said that, organizations cannot simply push for greater employee efforts. An analysis of 2,000+ GBS employees shows that 56% of people putting in more than 8 productive hours have average productivity below 100%. Furthermore, there was a 15% decline in average productivity when work went beyond 8 productive hours. What this study tells us is that extended work hours can lead to burnout, reduced morale, and decreased efficiency, ultimately impacting productivity.
GBS Organizations Need to Adopt a Sustainable Approach
In this scenario, it becomes clear that organizations need a planned strategy to drive productivity in the workplace to ensure long-term success without compromising workforce efficiency. By adopting a data-driven strategy that combines visibility, targeted actions, and managed change, GBS organizations can achieve their productivity goals.
Visibility into Workforce Data
There is a vast array of information available to GBS organizations. By collecting and analyzing data on L&D progress, performance metrics, and productivity indicators, it is easier to identify skill gaps, optimize work plans, and enhance overall business productivity. With the right data at the right time, organizations are better equipped to make data-driven decisions and targeted interventions.
Targeted Interventions to Enhance Performance
A dedicated commitment to tailored L&D programs, productivity-linked reviews, process reengineering, and Automation and AI can improve decision-making and improve operational efficiencies and productivity.
Change Management Strategies
Change doesn’t happen overnight. GBS organizations need to adopt agile implementation methodologies, establish ongoing feedback mechanisms, and maintain continuous feedback loops to ensure initiatives are refined as per changing requirements.
Also Read: Are you ready for the future of shared services?
Improving Productivity to Manage Business Evolution
It might seem daunting, but by diligently applying these strategies, GBS organizations can not only see a significant enhancement in productivity but also inculcate a culture of continuous improvement and resilience to stand up against both internal and external challenges.
