Global Business Services: Redefining value and success in dynamic markets

PwC study 2023: Results of our international client survey on their challenges around Global Business Services

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Arne Weuster und Christian Hiecke-Richter – Ihre Experten für Global Business Services bei PwC Deutschland

Arne Weuster
Partner at PwC Germany

Christian Hiecke-Richter
Director at PwC Germany

GBS organizations and the growing importance of centers of excellence

Trust in GBS organizations is growing. Parent companies are increasingly entrusting GBS with more complex tasks, which is why transactional service centers are often supplemented by specialized centers of excellence (CoEs).

Originally established as competence centers to improve processes and consolidate process knowledge, we are now seeing companies using CoEs as a driving force for the introduction of new business models, the initiation and development of new products and service offerings and as a spearhead for general innovation.

This development reinforces the transformative role of CoE organizations as the vehicle of choice for business change.

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Our study at a glance

Drive improvements, set standards

In the past, cost savings were cited as the main reason for introducing a GBS. GBSs continue to be a useful source of efficiency that leads to cost savings. In addition, however, we observe a number of other factors that underline the resilience of the GBS model: among other things, the majority of the companies surveyed (31%) are aiming to establish a talent hub with personnel specializing in complex processes. In addition, there is an increased focus on generating added value for the entire organization resulting from the rise of highly specialized competence centers (27%) and - of course - the constant focus on excellent delivery of transactional services with an effective cost advantage (28%).

This triad is complemented by new topics: GBS is also increasingly attributed a pioneering role in digital transformation and the introduction of digital tools and innovations (13%) as well as in the generation of data-driven insights (1%).

In the coming years, the importance of GBS will continue to increase, with a stronger focus on modernizing the overall organization with the help of GBS through digitalization, reforming processes and increasing its flexibility. This aims to enable an efficient response to challenges and changes in the market.

Infografik zu Global Business Services von PwC Deutschland

The strategic direction of GBS organizations for the next five years is consistent with that of our last survey, indicating that the overall strategy of GBS organizations remains unchanged. For more than three quarters of the companies surveyed, digital transformation, standardization, expansion of value-added services and broadening the scope of activities continue to be the most important GBS strategies and goals.

Infografik zu Global Business Services von PwC Deutschland

Other study results at a glance

Further development regarding location strategies

Recent geopolitical developments have had a significant impact on the choice of location. The coronavirus pandemic and the associated lockdowns have increased the acceptance of remote and hybrid workplaces, making it possible to attract talent from outside the local labor markets. The war in Ukraine and the associated uncertainties have slowed down new openings in the Eastern European GBS market, at least temporarily. Taken together, these trends lead to an increase in location-independent virtual teams, which can benefit from the advantages of low-wage countries combined with access to highly qualified talent.

GBS as digital pioneers

Above a certain level of maturity, GBS organizations have the potential to significantly drive business innovation by driving the adoption of advanced technologies such as (Gen) AI, NLP, RPA, process mining, OCR, global ERP systems and more.

These innovations are critical to gaining a competitive advantage and increasing the potential of GBS. In order to fulfil this new task, the focus is once again on centers of excellence (CoE), which will become even more important in the coming years and will be the driving force behind modernization and optimization strategies. CoEs will therefore be able to contribute even more to making their organizations crisis-proof through increased flexibility, process expertise and digitalization.

Outsourcing remains rare

As in our last study, we note that GBS organizations place little focus on outsourcing tasks to external service providers. Only around a third of participants stated that they outsource transactional activities in the areas of accounting, tax, HR and IT in particular. The majority of participants continue to focus on building up the necessary skills in GBS in order to be able to offer the required services themselves. However, we are also observing that mature GBS organizations in particular are focusing on competence centers and, in a further evolutionary stage, are outsourcing transactional processes as part of BPO 2.0 (see expert article PwC Australia).

Search for qualified staff

Attracting and retaining top talent is one of the biggest challenges for GBS organizations. Virtual collaboration, flexible working and the use of agile methods are now standard practices that are essential for attracting and retaining high-caliber professionals. This strategic approach not only enhances the company’s capabilities, but also strengthens its position as an employer of choice in an increasingly competitive job market.

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Global Business Services – Catalysts of value

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The methodology

The current study „Global Business Services – Catalysts of value“ is the seventh publication in this series of studies. Every two years, we survey shared service centers from a wide range of industries about their strategies, structures, working methods and current trends. For this study, we interviewed customers around the world between March and August 2023 on topics relating to global shared services and their current challenges.

In addition, the study combines perspectives from several experts from the global PwC network and thus offers unique insights into the global GBS industry.

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Arne Weuster

Arne Weuster

Partner, PwC Germany

Tel: +49 151 15132717

Christian Hiecke-Richter

Christian Hiecke-Richter

Director, PwC Germany

Tel: +49 170 5564137