Global Business Services: the 44% solution

Vin Kumar and Favad Siddiqui at The Hackett Group argue that AI will soon turbocharge global business services performance

Global business services (GBS) organisations are under growing pressure to deliver much more for much less and accomplish both goals while improving service quality and customer experience and transforming themselves to digital operations.

The good news is that artificial intelligence will create a new transformation lever to help them do that – and more: The Hackett Group estimates that Generative AI (Gen AI) alone will eventually enhance GBS productivity by 44%.

The application of this remarkable technology will extend GBS capabilities in several ways, including converting more manual labour to digital labour and enabling GBS analysts to analyse and interpret more data more quickly.

We are already seeing signs that Gen AI is creating opportunities most GBS firms haven’t even considered before, such as supporting greater levels of customisation and the launch of new data-rich services, such as marketing analytics and risk management.

A new day

Many leading GBS companies already use Gen AI to serve internal and external customers. 

Some have set up Gen AI-powered chatbots capable of making much more precise routing decisions and even personalising services at scale, reducing friction in the process.

Others use Gen AI as a digital assistant that can help create small automations, such as an Excel macro, write a robotic process automation script, or convert unstructured data to structured data. From documentation tracking to rapid process design and input prompts, such assistants will likely become integrated into most workstreams in the near future.

Gen AI is also giving GBS companies entrée to information they didn’t have access to before. Gen AI applications can now read and summarise customer emails, social media posts, and even ongoing customer disputes, extract insights from them very quickly, and suggest a response. 

For a clearer sense of just how revolutionary this technology can be, consider how two leading companies are already taking advantage of their digital opportunity to elevate their analytics:

MTN’s compliance passport, developed entirely in-house by its Procurement Excellence team, generates a risk cube to conduct a predictive risk assessment and ensure procurement governance on its entire supplier database.

By aggregating and processing data from multiple ERP systems, alongside external data sources such as sanctions lists, adverse media reporting, and PEP databases, the compliance passport represents a significant leap in how Procurement can obtain a 360-degree view of their supplier network, ensuring no critical information is overlooked.

The solution also reduced supplier due diligence and onboarding cycle time by 95%, saving over 10,000 hours annually, and enabling the procurement team to focus on more strategic initiatives.

IBM’s AI-driven Enterprise Performance Management (EPM) platform significantly enhances business performance by integrating advanced analytics across all functions and operations in 173 countries. EPM delivers comprehensive insights into sales, revenue performance, and market perceptions.

The platform supports tens of thousands of users and thousands of AI-generated “touchless” financial forecasts. It leverages AI to answer hundreds of end-user questions each month. Lauded by IBM CFO James Kavanaugh as the "backbone of the IBM operating model," EPM helped drive IBM’s strong business performance and contributed to hundreds of millions of dollars in business value in 2023, including saving millions of worker hours.

This wide range of new opportunities will lead to a revolutionary shift in GBS aspirations. Initially, GBS firms mainly focused on driving costs down and productivity up.

Today, however, advances in Gen AI open the door to a new era beyond cost savings in which GBS will be led by what we are calling Advanced Business Services – high-performing GBS firms that use their digital dividend to transform their business and their clients’ businesses, enabling employees to focus on creative, higher-value work, and sending the enterprise in new and rewarding directions we may not even be able to imagine yet. 

However, our recent survey found that few organisations are properly considering how to identify the use cases and evaluate the potential ROI of breakthrough Gen AI opportunities. Without clear direction, much of the opportunity will be left on the table.

Incorporating a Gen AI transformation into the GBS’ service management framework is critical to driving GBS strategy, design, operations, and continuous improvement. However, most organisations lack such a framework: our recent survey disclosed that fewer than 10% of organisations considered their capability in this area to be mature. 

Digitally enabled global business services

It’s easy to see AI as an opportunity for cost saving, and it will make many systems much more efficient. However, that’s only the beginning.

Beyond boosting productivity through the automation of routine tasks, AI also paves the way for greater analysis, process optimisation, service improvement and business opportunity development much faster than traditional methods. On top of that, the infinite scalability of cloud-based AI, combined with the impact of compound learning as systems continually read and respond to new data, will yield ever-increasing accuracy and ever-faster delivery of a variety of services.

In other words, AI is likely to lead the industry to Digitally Enabled Global Business Services, enhancing human intelligence, capabilities, and decision-making processes across various domains. Instead of just adding value linearly, AI will multiply its impact exponentially through continuous learning and innovation, leading to transformative changes across industries and society. 

For most companies, Gen AI is an opportunity. For GBS, it is an immediate imperative that promises to elevate GBS from a service provider to a true business partner.

Eight steps toward digital world class business services

As a leader of a GBS team, where should you begin to take advantage of the full potential of the Gen AI opportunity?

1 Intelligent Automation Centre of Excellence (COE). Establish or expand your automation COE to adopt a broader set of intelligent automation technologies, including Gen AI. Infuse this COE with change management, process transformation, and digitally savvy domain experts to accelerate end-to-end process automation and incorporate analytics and insights powered by data visualisation and dashboard solutions.

2 Commit to change. Adopting Gen AI presents risks, particularly in the beginning, but at this point, not adopting Gen AI is riskier. As with the Internet 30 years ago, simply waiting until the technology matures is not an option. There is too much work to be done. Integrating Gen AI will require mastering new technology and recruiting and training the right team to manage it. People with a broad range of analytical skills will need to be hired, and everyone in your organisation will need to become more digitally savvy.

3 Refresh your service management framework. Incorporate Gen AI into your service management framework so that this transformation opportunity has a home and is fully realised across GBS strategy, service design, and operations.

4 Take the lead. Senior executives will need to support these new AI-powered systems, or they won’t be adopted soon enough to avoid risks or fully take advantage of emerging opportunities. Incorporating Gen AI demands a whole new way of working for everybody in the organisation, and someone needs to keep your organisation focused on mastering these new ways of thinking and working.

5 Develop a top-down, enterprise-wide Gen AI transformation roadmap. At this point, it is negligent not to have an enterprise-wide plan that focuses on transformative and breakthrough opportunities and is supported by prioritised use cases. 

6 Know where you stand. Successful transformation requires a strong understanding of your strengths and weaknesses, as well as your new services and opportunities. Identify and prioritise the most promising use cases, then educate your internal and external customers about these new services and opportunities.

7 Create the capacity to focus on breakthrough performance. Dedicate resources that will have time to drive fundamental change in your enterprise.

8 Focus on the customer. Most of all, keep thinking about your customers’ needs and strategic imperatives. As core functions grow more automated, the work of GBS employees will necessarily focus more and more directly on improving the customer experience. Only firms with the skill and will to be true business partners will be able to compete. 

Vin Kumar is Principal, AI & Digital Operations Practice, of The Hackett Group, and Favad Siddiqui is the UK GBS Practice Lead

Main image courtesy of iStockPhoto.com and metamorworks